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, 2000

                                       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)

                   6 EXECUTIVE 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, 2000
-----------------------         ------------------------------------------------
    $0.01 Par Value                                2,228,739


<PAGE>



                          YONKERS FINANCIAL CORPORATION
                                    FORM 10-Q
                    QUARTERLY PERIOD ENDED DECEMBER 31, 2000



                                                                           Page
                                                                          Number
                                                                          ------
              PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements (Unaudited)
           Consolidated Balance Sheets at December 31,
             2000 and September 30, 2000 ....................................  2
           Consolidated Statements of Income for the
             Three Months Ended December 31, 2000 and 1999 ..................  3
           Consolidated Statement of Changes in
             Stockholders' Equity for the Three Months
             Ended December 31, 2000 ........................................  4
           Consolidated Statements of Cash Flows for the
             Three Months Ended December 31, 2000 and 1999 ..................  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 .................................................... 16


               PART II. OTHER INFORMATION

Item 1.    Legal Proceedings ................................................ 17
Item 2.    Changes in Securities ............................................ 17
Item 3.    Defaults Upon Senior Securities .................................. 17
Item 4.    Submission of Matters to a Vote of Security Holders .............. 17
Item 5.    Other Information ................................................ 17
Item 6.    Exhibits and Reports on Form 8-K ................................. 17
           Signature Page ................................................... 18


                                       1

<PAGE>


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

                                                      December 31, September 30,
                                                         2000          2000
ASSETS

Cash and cash equivalents:
    Cash and due from banks ......................     $   6,349      $   4,178
    Federal Funds sold ...........................         9,000          6,000
                                                       ---------      ---------
         Total cash and cash equivalents .........        15,349         10,178
                                                       ---------      ---------
Securities:
     Available for sale, at fair value
      (amortized cost of $123,275 at
      December 31, 2000 and $116,858 at
      September 30, 2000) ........................       121,900        112,373
     Held to maturity, at amortized cost
      (fair value of  $15,286 at
      December 31, 2000 and $16,081 at
      September 30, 2000) ........................        15,257         16,192
                                                       ---------      ---------
                                                       ---------      ---------
          Total securities .......................       137,157        128,565
                                                       ---------      ---------
                                                       ---------      ---------
Real estate mortgage loans held for sale,
 at lower of cost or market value ................         2,792          2,743
                                                       ---------      ---------
Loans receivable, net:
     Real estate mortgage loans ..................       356,481        354,583
     Consumer and commercial business loans ......        12,469         11,358
     Allowance for loan losses ...................        (1,769)        (1,703)
                                                       ---------      ---------
                                                       ---------      ---------
          Total loans receivable, net ............       367,181        364,238
                                                       ---------      ---------
Accrued interest receivable ......................         3,483          3,223
Federal Home Loan Bank  ("FHLB") stock ...........         9,298          9,298
Office properties and equipment, net .............         1,787          1,859
Other assets .....................................         1,744          2,770
                                                       ---------      ---------
          Total assets ...........................     $ 538,791      $ 522,874
                                                       =========      =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
     Deposits ....................................     $ 339,811      $ 325,106
     Securities repurchase agreements ............        79,512         85,012
     FHLB advances ...............................        77,320         72,400
     Other liabilities ...........................         4,526          5,474
                                                       ---------      ---------
          Total liabilities ......................       501,169        487,992
                                                       ---------      ---------

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 ....................        35,501         35,443
   Unallocated common stock  held by
    employee stock ownership plan ("ESOP") .......        (1,501)        (1,572)
   Unamortized awards of common stock under
    management recognition plan ("MRP") ..........          (256)          (329)
   Treasury stock, at cost (1,342,011 shares) ....       (22,037)       (22,037)
   Retained income, substantially restricted .....        26,704         26,032
   Accumulated other comprehensive loss ..........          (825)        (2,691)
                                                       ---------      ---------
         Total stockholders' equity ..............        37,622         34,882
                                                       ---------      ---------
                                                       $ 538,791      $ 522,874
                                                       =========      =========


See accompanying notes to consolidated financial statements


                                       2

<PAGE>


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


                                                            For the Three Months
                                                              Ended December 31,
                                                            --------------------
                                                              2000         1999
                                                              ----         ----
Interest and dividend income:
   Loans .............................................       $6,857       $6,042
   Securities ........................................        2,333        2,387
   Other earning assets ..............................          349          159
                                                             ------       ------
                                                             ------       ------
     Total interest and dividend income ..............        9,539        8,588
                                                             ------       ------

Interest expense:
   Deposits ..........................................        3,577        2,675
   Securities repurchase agreements ..................        1,289        1,614
   FHLB advances .....................................        1,319          847
                                                             ------       ------
     Total interest expense ..........................        6,185        5,136
                                                             ------       ------

       Net interest income ...........................        3,354        3,452

Provision for loan losses ............................           75           35
                                                             ------       ------
       Net interest income after provision
        for loan losses ..............................        3,279        3,417
                                                             ------       ------

Non-interest income:
   Service charges and fees ..........................          366          269
   Net gain on sales of real estate mortgage
    loans held for sale ..............................          126           23
   Net gain on sales of securities ...................           85            4
   Other .............................................           22           14
                                                             ------       ------
      Total non-interest income ......................          599          310
                                                             ------       ------

Non-interest expense:
   Compensation and benefits .........................        1,459        1,467
   Occupancy and equipment ...........................          367          338
   Data processing service fees ......................          207          179
   Federal deposit insurance costs ...................           16           38
   Other .............................................          473          581
                                                             ------       ------
      Total non-interest expense .....................        2,522        2,603
                                                             ------       ------

        Income before income tax expense .............        1,356        1,124

Income tax  expense ..................................          496          420
                                                             ------       ------

       Net income ....................................       $  860       $  704
                                                             ======       ======

Earnings per common share:
       Basic .........................................       $ 0.42       $ 0.35
       Diluted .......................................         0.41         0.34
                                                             ======       ======


See accompanying notes to consolidated financial statements


                                       3

<PAGE>


                  YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (Unaudited)
                  (Dollars in thousands, except per share data)

<TABLE>
<CAPTION>
                                                    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    Income(Loss)   Equity
                                  -----     -------    -------    ---------     -----       ------    ------------   ------
<S>                             <C>         <C>       <C>          <C>        <C>           <C>        <C>          <C>
Balance at September 30,
 2000 ......................... $     36   $ 35,443   $ (1,572)   $   (329)   $(22,037)   $ 26,032    $ (2,691)     34,882

 Net income ...................       --         --         --          --          --         860          --         860
 Dividends paid ($0.09
  per share) ..................       --         --         --          --          --        (188)         --        (188)
 Amortization of MRP awards ...       --         --         --          73          --          --          --          73
 Tax benefits from vested
  MRP awards ..................       --         21         --          --          --          --          --          21
 ESOP shares released for
  allocation (7,142 shares) ...       --         37         71          --          --          --          --         108
 Change in net unrealized
  gain (loss) on available-
  for sale securities, net
  of taxes ....................       --         --         --          --          --          --       1,866       1,866
                                --------   --------   --------    --------    --------    --------    --------    --------
Balance at December 31,
 2000 ......................... $     36   $ 35,501   $ (1,501)   $   (256)   $(22,037)   $ 26,704    $   (825)   $ 37,622
                                ========   ========   ========    ========    ========    ========    ========    ========
</TABLE>


See accompanying notes to consolidated financial statements.


                                       4

<PAGE>


                  YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)


                                                           For the Three Months
                                                             Ended December 31,
                                                           ---------------------
                                                             2000         1999
                                                             ----         ----
Cash flows from operating activities:
  Net income ...........................................   $    860    $    704
  Adjustments to reconcile net income to
    net cash provided by operating
    activities:
     Provision for loan losses .........................         75          35
     ESOP and MRP expense ..............................        181         200
     Depreciation and amortization expense .............        120         116
     Amortization of deferred fees, discounts
      and premiums, net ................................        108          35
     Net gain on sales of real estate mortgage
      loans held for sale ..............................       (131)        (23)
     Net gain on sales of securities ...................        (85)         (4)
     Other adjustments, net ............................     (1,396)     (2,155)
                                                           --------    --------
          Net cash provided by operating
           activities ..................................       (268)     (1,092)
                                                           --------    --------
Cash flows from investing activities:
  Purchases of available-for-sale securities ...........     (9,881)       (111)
  Proceeds from principal payments, maturities
   and calls of securities:
     Available-for-sale ................................      2,134       1,974
     Held-to-maturity ..................................        922       1,379
  Proceeds from sales of securities:
     Available-for-sale ................................      1,401          19
     Held-to-maturity ..................................         --          --
  Disbursements for loan originations ..................    (21,800)    (57,846)
  Principal collections on loans .......................      9,754       5,226
  Proceeds from sales of loans .........................      9,020       3,021
  Purchase of FHLB stock ...............................         --      (1,901)
  Other investing cash flows ...........................        (48)       (215)
                                                           --------    --------
          Net cash used in investing activities ........     (8,498)    (48,454)
                                                           --------    --------
Cash flows from financing activities:
  Net increase in deposits .............................     14,705      12,726
  Net (decrease) increase in borrowings with
     original terms of three months or less:
       Securities repurchase agreements ................     (5,500)      3,784
       FHLB advances ...................................     15,000      14,246
  (Repayment of) Proceeds from longer-term
    borrowings .........................................    (10,080)     20,000
  Dividends paid .......................................       (188)       (195)
                                                           --------    --------
          Net cash provided by financing activities ....     13,937      50,561
                                                           --------    --------

Net  increase in cash and cash equivalents .............      5,171       1,015
Cash and cash equivalents at beginning of the period ...     10,178       4,651
                                                           --------    --------

Cash and cash equivalents at end of  the period ........   $ 15,349    $  5,666
                                                           ========    ========

Supplemental information:
  Interest paid ........................................   $  6,498    $  4,678
  Income taxes paid ....................................        690          --
                                                           ========    ========


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, 2000 $104.0  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, 2000 are not necessarily  indicative of the results of operations  which may
be expected for the fiscal year ending September 30, 2001.

     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, 2000, included in the Form 10-K.

(2) 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. Total comprehensive income for the quarter ended
December 31, 2000 was $2,726,000 consisting of $860,000 in net income plus a net
decrease   of  $1.9   million  in  the   after-tax   net   unrealized   loss  on
available-for-sale  securities.  For the quarter ended December 31, 1999,  total
comprehensive  income of $448,000 consisted of net income of $704,000 less a net
increase   of  $1.2   million  in  the   after-tax   net   unrealized   gain  on
available-for-sale securities.

                                       6

<PAGE>


(3) Earnings Per Share

     The Company  reports both basic and diluted  earnings per share  ("EPS") in
accordance  with  Statement of Financial  Accounting  Standards  (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, 2000 and
1999. 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,
                                                            --------------------
                                                               2000         1999
                                                               ----         ----
                                                                  (In thousands)

Weighted average common shares outstanding
   for computation of basic EPS (1) ....................       2,047       2,006
  Common-equivalent shares due to the
   dilutive effect of stock options and
   MRP awards(2) .......................................          30          66
                                                               -----       -----
Weighted average common shares for
   computation of diluted EPS ..........................       2,077       2,072
                                                               =====       =====
--------------
(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, 2000 and September 30, 2000

     Total assets at December 31, 2000 amounted to $538.8 million,  representing
an increase of $15.9  million  from $522.9 at September  30, 2000.  Asset growth
during the period was funded primarily  through growth in the Company's  deposit
base relating to the expansion of its retail franchise.

     Overall,  total  securities  increased  $8.6  million to $137.2  million at
December 31, 2000 from $128.6 million at September 30, 2000. Total cash and cash
equivalents  increased  $5.1 million to $15.3  million at December 31, 2000 from
$10.2 million at September 30, 2000. Total loans (loans receivable and mortgages
held for sale)  increased  $3.0  million to $370.0  million at December 31, 2000
from $367.0  million at September  30, 2000.  The loan growth during the quarter
represents loan originations of $21.7 million,  offest by principal  collections
of $9.8 million and loans sold of $8.9 million.

     Total deposit  liabilities  increased  $14.7  million to $339.8  million at
December 31, 2000 from $325.1  million at September 30, 2000.  Total  borrowings
decreased by $580,000 to $156.8 million at December 31, 2000 from $157.4 million
at September  30, 2000.  Funds from deposit  growth were  primarily  invested in
securities, cash and cash equivalents, and new loans.

     Stockholders' equity increased by $2.7 million to $37.6 million at December
31, 2000 from $34.9  million at September  30,  2000.  The increase is primarily
attributable to a $1.9 million  decrease in the after-tax net unrealized loss on
available-for-sale  securities,  a $672,000  increase due to net income retained
after dividends, and a combined increase of


                                       8

<PAGE>


$202,000  relating  to the  employee  stock  ownership  plan and the  management
recognition plan. The ratio of stockholders' equity to total assets was 6.98% at
December  31, 2000 up from 6.67% at  September  30,  2000.  Book value per share
(computed  based on total  shares  issued  less  treasury  shares) was $16.88 at
December 31, 2000,  compared to $15.65 at September 30, 2000. 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, 2000 and 1999. 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,
                                                        ----------------------------------------------------------------------------
                                                                       2000                                   1999
                                                        ----------------------------------     -------------------------------------
                                                         Average                 Average       Average                     Average
                                                         Balance     Interest   Yield/Cost     Balance       Interest     Yield/Cost
                                                         -------     --------   ----------     -------       --------     ----------
<S>                                                    <C>           <C>         <C>          <C>            <C>           <C>
Assets                                                                          (Dollars in thousands)
Interest-earning assets:
    Loans (1) .......................................   $369,013      $6,857      7.43%        $328,672       $ 6,042       7.35%
    Mortgage-backed securities (2) ..................     84,866       1,447      6.82           95,964         1,628       6.79
    Other securities (2) ............................     42,410         886      8.36           41,271           759       7.36
    Other earning assets ............................     22,621         349      6.17           13,045           159       4.88
                                                        --------      ------                   --------       -------
       Total interest-earning assets ................    518,910      $9,539      7.35          478,952       $ 8,588       7.17
                                                                      ======                                  =======
Allowance for loan losses ...........................     (1,727)                                (1,531)
Non-interest earning assets .........................      9,591                                 12,401
                                                        --------                               --------
       Total assets .................................   $526,774                               $489,822
                                                        ========                               ========
Liabilities and  Stockholders' Equity
Interest-bearing liabilities:
    NOW, club and money market accounts .............   $ 65,587      $  351      2.14%        $ 60,073       $   327       2.18%
    Regular savings accounts (3) ....................     57,632         304      2.11           53,275           239       1.79
    Savings certificate accounts ....................    197,118       2,922      5.93          162,537         2,109       5.19
                                                        --------      ------                   --------       -------
       Total interest-bearing deposits ..............    320,337       3,577      4.47          275,885         2,675       3.88

    Borrowings ......................................    160,600       2,608      6.50          172,092         2,461       5.72
                                                        --------      ------                   --------       -------
       Total interest-bearing liabilities ...........    480,937      $6,185      5.14          447,977       $ 5,136       4.59
                                                                      ======                                  =======
Non-interest-bearing liabilities ....................     10,901                                  9,812
                                                        --------                               --------
       Total liabilities ............................    491,838                                457,789
Stockholders' equity ................................     34,936                                 32,033
                                                        --------                               --------
       Total liabilities and stockholders' equity ...   $526,774                               $489,822
                                                        ========                               ========
Net interest income .................................                 $3,354                                  $ 3,452
                                                                      ======                                  =======
Average interest rate spread (4) ....................                             2.21%                                     2.59%
Net interest margin (5) .............................                             2.59%                                     2.88%
Net interest-earning assets (6) .....................    $37,973                               $ 30,975
                                                        ========                               ========
Ratio of average interest-earning assets to average
    interest-bearing liabilities ....................                           107.90                                    106.91
</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, 2000  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,
                                                     2000 Compared to 1999
                                               ---------------------------------
                                               Increase (Decrease)
                                                     Due to
                                                ------------------        Net
                                                Volume       Rate        Change
                                                ------       ----        ------
                                                        (In thousands)
Interest-earning assets:
  Loans ....................................    $   749     $    66     $   815
  Mortgage-backed securities ...............       (188)          7        (181)
  Other securities .........................         21         106         127
  Other earning assets .....................        140          50         190
                                                -------     -------     -------
             Total .........................        722         229         951
                                                -------     -------     -------
Interest-bearing liabilities:
  NOW, club and money market accounts ......         30          (6)         24
  Regular savings accounts .................         20          45          65
  Savings certificate accounts .............        487         326         813
  Borrowings ...............................       (172)        319         147
                                                -------     -------     -------
             Total .........................        364         684       1,049
                                                -------     -------     -------
Net change in net interest income ..........    $   358     $  (455)    $   (98)
                                                =======     =======     =======


Comparison of Operating Results for the Three Months Ended December 31, 2000 and
1999

     General.  Net income  for the three  months  ended  December  31,  2000 was
$860,000 or diluted  EPS of $0.41  compared to net income of $704,000 or diluted
EPS of $0.34 for the quarter ended December 31, 1999.  Basic earnings per common
share were $0.42 for the quarter  ended  December 31, 2000 compared to $0.35 for
the same period in 1999.  The  increase  in net income of  $156,000  reflects an
increase  of  $289,000  in  non-interest  income,  and  a  $81,000  decrease  in
non-interest  expense,  partially  offset by a $98,000  decrease in net interest
income,  a $76,000  increase in income tax  expense and $40,000  increase in the
provision for loan losses.

Net Interest Income. Net interest income for the quarter ended December 31, 2000
was $3.4  million,  a decrease of $98,000 from $3.5 million for the prior year's
period.  The decrease  reflects a decline in the average  interest  rate spread,
partially  offset  by  an  increase  in  net   interest-earning   assets  (total
interest-earning  assets  less  total  interest-bearing  liabilities)  primarily
attributable to the investment of proceeds from deposit  growth.  The decline in
the average  interest  rate  spread is  primarily a result of an increase in the
Company's cost of funds. The Company's average interest rate spread decreased to
2.21% for the quarter  ended


                                       11

<PAGE>


December  31,  2000 from 2.59% for the same  quarter  last  year,  while the net
interest margin  decreased to 2.59% for the 2000 three month period from 2.88% a
year earlier.

     Interest and Dividend  Income.  Interest and dividend  income  totaled $9.5
million for the three  months ended  December 31, 2000,  an increase of $951,000
compared to $8.6  million for the three months  ended  December  31, 1999.  This
increase  reflects  the  effect of a $40.0  million  increase  in total  average
interest-earning  assets  coupled with an 18 basis point increase in the average
yield on such assets to 7.35% for the three months ended  December 31, 2000 from
7.17% for the same period in the prior year.

     Interest  income on loans  increased  $815,000  for the three  months ended
December 31, 2000 compared to the same period in the prior year,  reflecting the
effect of a $40.3 million  increase in the average  balance and an 8 basis point
increase in the average  yield.  The increase was primarily  attributable  to an
increase in multi-family mortgage loans.

     On a combined basis,  interest and dividend income on  mortgage-backed  and
other  securities  decreased  $54,000 to $2.3 million for the three months ended
December  31, 2000 from $2.4  million for the three  months  ended  December 31,
1999. Interest on mortgage-backed  securities decreased by $181,000 attributable
to a $11.1 million decrease in the average balance partially offset by a 3 basis
point increase in the average yield.  Interest on other securities  increased by
$127,000,  primarily  attributable to a $939,000 increase in the average balance
and a 100 basis point  increase  in the  average  yield to 8.36% for the quarter
ended December 31, 2000 from 7.36% for the same period in the prior year.

     Interest and dividend  income on other earning assets  increased  $190,000,
primarily  attributable to a $9.6 million  increase in the average balance and a
129 basis point increase in the average yield.

     Interest  Expense.  Interest  expense  totaled  $6.2  million for the three
months  ended  December  31,  2000,  an increase of $1.1  million from the prior
year's quarter.

     Interest expense on deposits increased $902,000 compared to the same period
in the prior year,  reflecting  the effect of an $44.5  million  increase in the
average  balance  and  a  59  basis  point  increase  in  the  average  rate  on
interest-bearing  deposits to 4.47% for the three months ended December 31, 2000
from 3.88% for the three  months ended  December  31, 1999.  The increase in the
average rate paid on deposits  primarily  reflects a 74 basis point  increase in
the average rate paid on savings certificate  accounts,  coupled with a 32 basis
point  increase in the average  rate paid on regular  savings  accounts  and a 4
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 $34.6
million increase in average savings certificate accounts (to $197.1 million from
$162.5  million),  a $5.5 million increase in average NOW, club and money market
accounts (to $65.6  million from $60.1  million) and a $4.3 million  increase in
average regular savings accounts (to $57.6 million from $53.3 million).

     Interest expense on borrowings  increased  $147,000 to $2.6 million for the
three  months  ended  December  31, 2000 from $2.5  million for the three months
ended December 31, 1999. Total borrowings  averaged $160.6 million for the three
months ended  December  31, 2000 at an average rate of 6.50%  compared to $172.1
million and 5.72%, respectively,  for the prior-year quarter. See "Liquidity and
Capital Resources" for further discussion of the Company's securities repurchase
agreements.


                                       12

<PAGE>


     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 $75,000 and $35,000 for the three months
ended  December  31, 2000 and 1999,  respectively.  The higher  provision in the
quarter  ended  December  31, 2000  reflects net  charge-offs  of $9,000 for the
period, compared to net recoveries of $19,000 for the quarter ended December 31,
1999, as well as an increase in multi- family loans which present a higher level
of risk. Non-performing loans totaled $275,000 at December 31, 2000, compared to
$123,000 at September  30, 2000 and  $766,000 at December  31, 1999.  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,  2000  increased  $289,000  to  $599,000,  from  $310,000  for the
comparable period in 1999. The increase is primarily  attributable to a $103,000
increase  in the net gain on sales of real  estate  mortgages  held for sale,  a
$97,000  increase in service charges and fee income,  and an $81,000 increase in
the net gain on sale of  securities..  The  increase in net gain on sale of real
estate mortgages held for sale reflects loans sold of $8.9 million for the three
months  ended  December  31, 2000 as  compared to sales of $3.0  million for the
period ended December 31, 1999. The increase in sales volume is consistent  with
managements  strategy to sell a portion of one-to-four  family  residential real
estate  originations  in the secondary  market and supplement its portfolio with
higher  yielding  multi-family  loans.  The increase in service  charges and fee
income  resulted  from  increases  in  transaction  volume as well as fee income
generated from our annuities and mutual fund sales program.  The increase in net
gain on sale of securities  reflects  sales of $1.3 million for the three months
ended  December 31,  2000,  as compared to sales of $15,000 for the period ended
December 31, 1999.

     Non-interest  Expense.  Non-interest  expense  decreased  $81,000  to  $2.5
million for the three months ended  December 31, 2000,  compared to $2.6 million
for the three  months  ended  December  31,  1999.  The  decrease  is  primarily
attributable  to a decrease  of  $108,000  in other  non-interest  expense.  The
decrease  in other  non-interest  expense  primarily  reflects  a  reduction  in
advertising and marketing  expenses  associated with the opening of two in store
branches established during the 1999 period. Federal deposit insurance decreased
by $22,000, reflecting a reduction in insurance rates.

     Income Tax  Expense.  Income tax expense was  $496,000 for the three months
ended December 31, 2000 and $420,000 for the comparable 1999 period,  reflecting
effective tax rates of 36.6% and 37.4 %, respectively.


Asset Quality

     Non-performing  loans  totaled  $275,000 at December 31, 2000,  compared to
$123,000 at  September  30, 2000 and $766,000  December  31, 1999.  The ratio of
non-performing  loans to total loans  receivable was 0.07% at December 31, 2000,
compared to 0.03% at  September  30, 2000 and 0.22% at December  31,  1999.  The
allowance for loan losses was $1.8 million or 0.48% of total loans receivable at
December 31, 2000, compared to $1.7 million or 0.46% of

                                       13

<PAGE>


total  loans  receivable  at  September  30,  2000 and $1.6  million or 0.44% at
December 31, 1999. The ratio of the allowance for loan losses to  non-performing
loans was 643.27% at December  31, 2000,  compared to 1384.55% at September  30,
2000 and 203.26% at December 31, 1999.

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


                                        December 31,  September 30, December 31,
                                            2000         2000            1999
                                            ----         ----            ----
                                               (Dollars in thousands)
Non-accrual loans past due ninety
 days or more:
  Real estate mortgage loans:
       One- to four-family .............   $  271        $  109        $  342
       Commercial ......................       --            --           303
  Consumer loans .......................        4            14           121
                                           ------        ------        ------
           Total .......................      275           123           766
Real estate owned, net .................       --            --            --
                                           ------        ------        ------
Total non-performing assets ............   $  275        $  123        $  766
                                           ======        ======        ======
Allowance for loan losses ..............   $1,769        $1,703        $1,557
                                           ======        ======        ======
Ratios:
  Non-performing loans to total
   loans receivable ....................     0.07%         0.03%         0.22%
  Non-performing assets to total assets      0.05          0.02          0.15
  Allowance for loan losses to:
      Non-performing loans .............   643.27       1384.55        203.26
      Total loans receivable ...........     0.48          0.46          0.44


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, 2000 was 4.0%,
and the Company's actual liquidity ratio was 7.56%.

                                       14

<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, 2000, the Company had outstanding  loan origination
commitments  of $28.1  million,  unadvanced  home equity lines of credit of $3.1
million  and  undisbursed  construction  loans in process of $5.0  million.  The
Company  anticipates  that it will have  sufficient  funds available to meet its
current loan  origination  and other  commitments.  At December  31,  2000,  the
Company  had the ability to obtain  additional  FHLB  advances of  approximately
$56.8 million.  Certificates of deposit  scheduled to mature in one year or less
from  December 31, 2000 totaled  $149.2  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, 2000 consisted of $79.5 million in
borrowings  under  securities  repurchase  agreements and FHLB advances of $77.3
million.  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, 2000,  the average  borrowings  under these
agreements   amounted  to  $83.1  million  and  the  maximum  month-end  balance
outstanding was $85.0 million.

     Additional  information  concerning  outstanding repurchase agreements with
the FHLB of New York as of December 31, 2000 is summarized as follows:

<TABLE>
<CAPTION>

                                                 Accrued      Weighted    Fair Value
                                                 Interest      Average   of Collateral
Remaining Term to Final Maturity(1)  Amount     Payable(2)      Rate     Securities(3)
-----------------------------------  ------     ----------      ----     -------------
                                                (Dollars in Thousands)
<S>                                 <C>          <C>             <C>        <C>
Within 30 days ...............      $11,500      $    82         6.63%      $13,267
After 30 days but
 within one year .............        6,500           52         7.20         7,221
After one but
 within three years ..........       11,000           31         5.99        13,450
After three but
 within five years ...........       10,100          149         6.18        11,554
After five years .............       40,412          347         5.67        44,565
                                    -------      -------                    -------
     Total ...................      $79,512      $   661         6.04%      $90,057
                                    =======      =======                    =======
</TABLE>
-------------

(1)  The weighted average remaining term to final maturity was approximately 5.1
     years at December 31, 2000.  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 2.1 years at December 31, 2000.
(2)  Included in other liabilities in the consolidated balance sheet.
(3)  Represents the fair value of the mortgage-backed securities ($58.2 million)
     and other debt  securities  ($31.8  million) which were  transferred to the
     counterparty,  including  accrued  interest  receivable of $950,000.  These
     securities consist of  available-for-sale  securities and  held-to-maturity
     securities   with  fair  values  of  $80.0   million  and  $10.0   million,
     respectively.

                                       15

<PAGE>


     At December  31,  2000,  the  Company's  "amount at risk" under  securities
repurchase agreements was approximately $9.9 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.

     Information  concerning  FHLB  advances  outstanding  and weighted  average
interest  rates with the FHLB of New York are summarized as follows by remaining
period to maturity:



                                                      2000
                                             ----------------------
                                               Amount          Rate
                                               ------          ----
                                             (Dollars in thousands)
FHLB advances maturing:
Within 30 days .........................      $ 8,000          6.69%
30 days to 1 year ......................       10,000          6.78
1 year to 3 years ......................       10,000          6.54
3 years to 5 years .....................       30,200          7.14
Over 5 years ...........................       19,120          6.81
                                              -------

         Total .........................       77,320          6.89%
                                              =======


     The  weighted  average  period  to  maturity  date  for the  FHLB  advances
outstanding at December 31, 2000 was 3.8 years,  with a weighted  average period
to call date of 3.4 years.  During the three months ended December 31, 2000, the
Company's average FHLB advances  outstanding were $77.5 million, and the maximum
month end balance outstanding was $83.4 million.

     At December  31,  2000,  the  Association  exceeded  all of its  regulatory
capital  requirements  with a tangible  capital level of 6.60% of total adjusted
assets,  which is above the  required  level of 1.5%;  core  capital of 6.60% of
total  adjusted  assets,  which is above the required  level of 4.0%;  and total
risk-based  capital of 15.13%,  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.


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.

     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.


                                       16

<PAGE>


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

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, 2000, the Company filed one report on
form 8-K. On October 25, 2000,  under Item 5, the Company issued a press release
announcing  the  Company's  earnings  for the  quarter  and  fiscal  year  ended
September 30, 2000.


                                       17

<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 14, 2001               /s/  Richard F. Komosinski
                                       --------------------------
                                       Richard F. Komosinski,
                                       President and Chief Executive Officer
                                       (Principal Executive Officer)


Date:  February 14, 2001               /s/ Joseph D. Roberto
                                       ----------------------
                                       Joseph D. Roberto
                                       Senior Vice President, Treasurer and
                                       Chief Financial Officer
                                       (Principal Financial Officer)


                                       18