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 June 30, 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, June 30, 2000
-----------------------            --------------------------------------------
  $0.01 Par Value                                          2,228,739


<PAGE>


                          YONKERS FINANCIAL CORPORATION
                                    FORM 10-Q
                      QUARTERLY PERIOD ENDED JUNE 30, 2000



                                                                           Page
                                                                          Number
                                                                          ------
                         PART 1. FINANCIAL INFORMATION

Item 1.   Financial Statements (Unaudited)
          Consolidated Balance Sheets at June 30, 2000 and
           September 30, 1999 ..............................................   2
          Consolidated Statements of Income for the Three and Nine Months
           Ended June 30, 2000 and 1999.....................................   3
          Consolidated Statement of Changes in Stockholders' Equity
           for the Nine Months Ended June 30, 2000..........................   4
          Consolidated Statements of Cash Flows for the Nine Months
           Ended June 30, 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......................................................  20



                           PART II. OTHER INFORMATION

Item 1.   Legal Proceedings ................................................  20
Item 2.   Changes in Securities ............................................  21
Item 3.   Defaults Upon Senior Securities ..................................  21
Item 4.   Submission of Matters to a Vote of Security Holders ..............  21
Item 5.   Other Information ................................................  21
Item 6.   Exhibits and Reports on Form 8-K .................................  21
          Signature Page ...................................................  22

                                       1

<PAGE>
                  YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)
<TABLE>
                                                                                     June 30,          September 30,
                                                                                       2000                1999
<S>                                                                             <C>                  <C>
ASSETS
Cash and cash equivalents:                                                      $      6,308         $      4,651
Short-term investments                                                                 4,500                    0
                                                                                ------------         ------------
     Total cash and cash equivalents                                                  10,808                4,651
Securities:
     Available-for-sale, at fair value (amortized cost of $116,695 in 2000
       and $120,996 in 1999)                                                         110,869              116,712
     Held-to-maturity, at amortized cost (fair value of $17,100 in 2000
      and $21,959 in 1999)                                                            17,290               21,936
                                                                                ------------         ------------
          Total securities                                                           128,159              138,648
                                                                                ------------         ------------
Real estate mortgage loans held for sale, at lower of cost or market value             1,565                1,226
                                                                                ------------         ------------
Loans receivable, net:
     Real estate mortgage loans                                                      355,576              291,199
     Consumer and commercial business loans                                           10,464                8,254
     Allowance for loan losses                                                        (1,634)              (1,503)
                                                                                ------------         ------------
          Total loans receivable, net                                                364,406              297,950
                                                                                ------------         ------------
Federal Home Loan Bank  ("FHLB") stock                                                 9,298                7,397
Accrued interest receivable                                                            3,343                2,750
Office properties and equipment, net                                                   1,971                1,984
Other assets                                                                           3,505                3,089
          Total assets                                                          $    523,055          $   457,695
                                                                                ============          ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
     Deposits                                                                   $    319,713          $   272,974
     Securities repurchase agreements                                                 91,012               99,987
     FHLB advances                                                                    74,400               47,948
     Other liabilities                                                                 4,631                4,769
                                                                                ------------          -----------
         Total liabilities                                                           489,756              425,678
                                                                                ------------          -----------

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                                                       35,401                35,225
     Unallocated common stock  held by employee stock
        ownership plan ("ESOP")                                                       (1,643)               (1,857)
     Unamortized awards of common stock under  management                                 --
        recognition plan ("MRP")                                                        (402)                 (621)
     Treasury stock, at cost ( 1,322,011 shares in 2000 and
        1,332,011 shares in 1999)                                                    (22,037)              (21,866)
     Retained income, substantially restricted                                        25,440                23,652
     Accumulated other comprehensive loss  (note 2)                                   (3,496)               (2,552)
                                                                                ------------           -----------
          Total stockholders' equity                                                  33,299                32,017
                                                                                ------------           -----------
          Total liabilities and stockholders' equity                            $    523,055           $   457,695
                                                                                ============           ===========

</TABLE>

                                       2

<PAGE>

                  YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                      (In thousands, except per share data)
<TABLE>
                                                                  For the Three Months           For the Nine Months
                                                                    Ended June 30,                Ended June 30,
                                                                --------------------------    ---------------------------
                                                                   2000          1999            2000           1999
                                                                   ----          ----            ----           ----
<S>                                                                <C>            <C>            <C>            <C>
Interest and dividend income:
   Loans                                                            $ 6,708       $ 4,190        $ 19,213       $ 11,734
   Securities                                                         2,287         2,306           7,001          7,487
   Other earning assets                                                 234           153             575            520
                                                                ------------  ------------    ------------  ------------
                                                                ------------  ------------    ------------  ------------
     Total interest and dividend income                               9,229         6,649          26,789         19,741
                                                                ------------  ------------    ------------  -------------
Interest expense:
   Deposits                                                           3,106         2,392           8,584          7,112
   Securities repurchase agreements                                   1,381         1,048           4,560          3,363
   FHLB advances                                                      1,224           145           3,151            452
                                                                ------------  ------------    ------------  -------------
     Total interest expense                                           5,711         3,585          16,295         10,927
                                                                ------------  ------------    ------------  -------------

       Net interest income                                            3,518         3,064          10,494          8,814


Provision for loan losses                                                75            50             145            200
                                                                ------------  ------------    ------------  -------------
       Net interest income after provision for loan losses            3,443         3,014          10,349          8,614
                                                                ------------  ------------    ------------  -------------
Non-interest income:
   Service charges and fees                                             361           189             977            512
   Net gain on sales of real estate mortgage
      loans held for sale                                                33           (65)             81            181
   Net gain (loss) on sales of securities                                 9            25               9             98
   Other                                                                 10            16              75            106
                                                                ------------  ------------    ------------  -------------
      Total non-interest income                                         413           165           1,142            897
                                                                ------------  ------------    ------------  -------------

Non-interest expense:
   Compensation and benefits                                           1,406         1,194           4,269
   Occupancy and equipment                                               373           324           1,068            874
   Data processing service fees                                          190           154             578            473
   Federal deposit insurance costs                                        14            36              67            104
   Other                                                                 508           445           1,759
                                                                 ------------  ------------    ------------  -------------
      Total non-interest expense                                       2,491         2,153           7,741
                                                                 ------------  ------------    ------------  -------------

        Income before income tax expense                               1,365         1,026           3,750

Income tax  expense                                                      500           369           1,386
                                                                 ------------  ------------    ------------  -------------

       Net income                                                    $  865        $  657         $ 2,364        $ 1,991
                                                                ============  ============    ============  =============

Earnings per common share:
       Basic                                                         $ 0.43        $ 0.28          $ 1.18         $ 0.82
       Diluted                                                         0.42          0.27            1.15           0.81
                                                                ============  ============    ============  =============

</TABLE>


See accompanying notes to financial statements

                                       3
<PAGE>

                  YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (Unaudited)
                  (Dollars in thousands, except per share data)
<TABLE>
                                                              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                                  --         --          --         --          --    2,363       --            2,363
 Dividends paid ($0.27 per share)            --         --          --         --          --     (575)      --             (575)
 Common stock repurchased (10,000 shares)                                                (171)                              (171)
 Amortization of MRP awards                  --         --          --        219          --       --       --              219
 Tax benefits from vested
  MRP awards                                 --         43          --         --          --       --       --               43
 ESOP shares released for
  allocation (21,426 shares)                 --        133         214         --          --       --       --              347
 Increase in net unrealized loss on
  available-for-sale securities, net of tax  --         --          --         --          --       --     (944)            (944)

                                           ----     ------     -------      -----    -------     ------- -------         -------
Balance at June 30, 2000                    $36     $35,401    $(1,643)     $(402)   $(22,037)   $25,440 $(3,496)        $33,299
                                           ====     ======     =======      =====    ========    ======= =======         =======
</TABLE>




See accompanying notes to consolidated financial statements

                                       4

<PAGE>
                  YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)
<TABLE>
                                                                                  For the Nine Months
                                                                                     Ended June 30,
                                                                                  -------------------
                                                                                  2000           1999
                                                                                  ----           ----
<S>                                                                             <C>              <C>
Cash flows from operating activities:
  Net income                                                                   $  2,363         $ 1,991
 Adjustments to reconcile net income to net cash provided
  by operating activities:
 Provision for loan losses                                                          145             200
 ESOP and MRP expense                                                               566             540
  Depreciation and amortization expense                                             355             262
  Amortization of deferred fees, discounts and premiums, net                        182             225
   Net gain on sales of real estate mortgage loans held for sale                    (80)           (181)
  Net (gain) loss on sales of securities                                            (10)            (98)
Other adjustments, net                                                             (466)          1,887
                                                                               --------         -------
        Net cash provided by operating activities                                 3,055           4,826
                                                                               --------        --------
Cash flows from investing activities:
  Purchases of available-for-sale securities                                     (1,684)        (49,302)
  Proceeds from principal payments, maturities and calls of securities:
     Available-for-sale                                                           5,745          36,379
    Held-to-maturity                                                              4,646          19,004
  Proceeds from sales of securitie:
    Available-for-sale                                                              185          17,647
    Held-to-maturity
 Disbursements for loan originations                                           (100,016)       (100,005)
 Principal collections on loans                                                  23,879          28,731
 Proceeds from sales of loans                                                     9,120          34,201
  Purchases of FHLB stock                                                        (1,901)             --
  Other investing cash flows                                                       (342)           (708)
                                                                               --------         -------
          Net cash used in investing activities                                 (60,368)        (14,053)
                                                                               --------         --------
Cash flows from financing activities:
  Net increase in deposits                                                       46,739          31,270
Net (decrease) increase in borrowings with
     original terms of three months or less:
       Securities repurchase agreements                                         (22,949)        (32,178)
      FHLB advances                                                              12,325           4,000
 Proceeds from longer-term borrowings                                            28,101          10,400
 Common stock repurchased                                                          (171)         (2,385)
  Dividends paid                                                                   (575)           (594)
                                                                               --------        --------
       Net cash  provided by financing activities                                63,470          10,513
                                                                               --------        --------
Net  increase in cash and cash equivalents                                        6,157           1,286
Cash and cash equivalents at beginning of period                                  4,651           4,195
                                                                               --------        --------
Cash and cash equivalents at end of period                                     $ 10,808        $  5,481
                                                                               ========        ========
Supplemental information:
  Interest paid                                                                $ 15,557        $ 10,701
  Income taxes paid                                                                  --             741
                                                                               ========        ========
</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 June 30,  2000,  $104.3  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 nine months ended June 30,
2000 are not  necessarily  indicative of the results of  operations  that 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  income for the nine months  ended June 30, 2000 was $1.4  million
consisting  of $2.4 million in net income less a net increase of $944,000 in the
after-tax net unrealized  loss on  available-for-sale  securities.  For the nine
months ended June 30, 1999, total  comprehensive  loss of $1.2 million consisted
of net  income  of $2.0  million  less a net  decrease  of $3.2  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 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 and nine months ended June 30, 2000 and
1999. For purposes of computing basic EPS, net income applicable to common stock
equaled net income for both periods presented.

<TABLE>
                                                            For Three Months             For the Nine Months
                                                              Ended June 30,                 Ended June 30,
                                                            2000         1999            2000          1999
                                                            ----         ----            ----          ----
                                                                              (In Thousands)
<S>                                                         <C>          <C>              <C>          <C>
Weighted average common shares outstanding
  for computation of basic EPS (1)                          2,012        2,383            2,009        2,429
Common-equivalent shares due to the dilutive effect of
  stock options and MRP awards (2)                             29           53               47           35
                                                            -----        -----            -----        -----
Weighted average common shares for
  computation of diluted EPS                                2,041        2,436            2,056        2,464
                                                            =====        =====            =====        =====
</TABLE>

(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 June 30, 2000 and September 30, 1999

     Total assets at June 30, 2000  amounted to $523.1  million,  an increase of
$65.4 million, or 14.3%, from $457.7 million at September 30, 1999. Asset growth
during the period related  primarily to increased loan volume funded by deposits
and  borrowings   reflecting  the  continued  growth  of  the  Company's  retail
franchise.

     Overall,  total loans (loans  receivable  and mortgage loans held for sale)
increased $66.8 million or 22.3%, to $366.0 million at June 30, 2000 from $299.2
million at September 30, 1999. The loan growth during the nine months ended June
30, 2000 primarily reflects loan originations net of repayments of $76.1 million
less loans sold of $9.1 million.  The portfolio  growth in the nine month period
primarily  reflects  increases of $42.1 million in one-to  four-family  mortgage
loans,  $14.6 million in  multi-family  loans,  $6.0 million in commercial  real
estate loans,  $2.2 million in construction  loans, $2.2 million in consumer and
commercial  loans,  partially  offset by a decrease  of  $256,000 in land loans.
Total securities at June 30, 2000 decreased $10.4 million to $128.2 million from
$138.6 million at September 30, 1999.

     Deposit  liabilities  increased $46.7 million to $319.7 million at June 30,
2000 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 $27.8 million as well as aggressive  cross-selling programs. Total borrowings
increased  by $17.5  million  to $165.4  million  at June 30,  2000 from  $147.9
million at  September  30, 1999.  Funds from  increased  borrowings  and deposit
growth were primarily used to fund new loans.

                                       8
<PAGE>

     Stockholders' equity increased by $1.3 million to $33.3 million at June 30,
2000 from $32.0  million at  September  30,  1999.  The  increase  is  primarily
attributable  to net income  retained  after  dividends  of $1.8  million  and a
combined  increase of $609,000 relating to the employee stock ownership plan and
the management  recognition plan, partially offset by a $944,000 increase in the
after-tax net unrealized loss on  available-for-sale  securities and $171,000 in
treasury stock  repurchases.  The ratio of stockholders'  equity to total assets
decreased  to 6.4% at June 30, 2000 from 7.0% at September  30, 1999  reflecting
the substantial growth in assets.  Book value per share (computed based on total
shares issued less treasury  shares)  increased to $14.94 at June 30, 2000, from
$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 and nine months  ended June 30,  2000 and 1999.  The yields and costs were
derived by dividing  interest income or interest  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>
                                                                For the Quarter Ended June 30,
                                         -----------------------------------    --------------------------------------------------
                                                          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)                             $364,641     $  6,708     7.36%      $226,268      $   4,190     7.41%
    Mortgage-backed securities (2)          87,635        1,516     6.92        105,577          1,675     6.35
    Other securities (2)                    41,278          771     7.47         36,183            631     6.98
    Other earning assets                    14,131          234     6.62         11,844            153     5.17
                                          --------     --------                --------      ---------
       Total interest-earning assets       507,685     $  9,229     7.27        379,872      $   6,649     7.00
                                                       ========                              =========

Allowance for loan losses                   (1,571)                              (1,467)
Non-interest-earning assets                 11,320                               13,061
                                          --------                             --------
       Total assets                       $517,434                             $391,466
                                          ========                             ========
Liabilities and  Stockholders' Equity
Interest-bearing liabilities:
    NOW, club and money market accounts   $ 64,102     $    341     2.13%      $ 57,772      $     330     2.28%
    Regular savings accounts (3)            57,054          242     1.70         49,369            230     1.86
    Savings certificate accounts           188,993        2,523     5.34        148,168          1,832     4.95
                                          --------     --------                --------      ---------
       Total interest-bearing deposits     310,149        3,106     4.01        255,309          2,392     3.75

    Borrowings                             170,718        2,605     6.10         87,682          1,193     5.44
                                          --------     --------                --------      ---------
       Total interest-bearing liabilities  480,867     $  5,711     4.75        342,991      $   3,585     4.18
                                                       ========                              =========

Non-interest-bearing liabilities             4,516                                8,422
                                          --------                             --------
       Total liabilities                   485,383                              351,413

Stockholders' equity                        32,051                               40,053
                                          --------                             --------
 Total liabilities and stockholders'equiy  517,434                             $391,466
                                          ========                             ========
Net interest income                                    $  3,518                              $   3,064
                                                       ========                              =========
Average interest rate spread (4)                                    2.52%                                  2.82%
Net interest margin (5)                                             2.77%                                  3.23%
Net interest-earning assets (6)           $ 26,818                             $ 36,881
                                          ========                             ========
Ratio of average interest-earning assets to
average
    interest-bearing liabilities                                  105.58%                                110.75%


(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.

</TABLE>

                                       10

<PAGE>
<TABLE>

                                                                    For the Nine Months Ended June 30,
                                                ---------------------------------------------------------------------------------
                                                            2000                                           1999
                                                -----------------------------------       ---------------------------------------
                                                Average                   Average         Average                         Average
                                                Balance    Interest      Yield/Cost       Balance       Interest       Yield/Cost
                                                -------    --------      ----------       -------       --------       ----------
Assets                                                                    (Dollars in thousands)
<S>                                            <C>         <C>               <C>          <C>             <C>             <C>
Interest-earning assets:
 Loans (1)                                    $349,310     $ 19,213         7.33%         $209,514      $ 11,734          7.47%
 Mortgage-backed securities (2)                 91,725        4,712         6.85           113,007         5,366          6.33
 Other securities (2)                           41,029        2,289         7.44            40,215         2,122          7.04
 Other earning assets                           13,546          574         5.65            13,713           520          5.06
                                               -------     --------                        -------      --------
  Total interest-earning assets                495,610     $ 26,788         7.21           376,449      $ 19,742          6.99
                                                           ========                                     ========

Allowance for loan losses                       (1,548)                                     (1,400)
Non-interest-earning assets                     11,552                                       9,861
                                              -------                                     --------
  Total assets                                $505,614                                    $384,910
                                              ========                                    ========
Liabilities and  Stockholders' Equity
Interest-bearing liabilities:
 NOW, club and money market accounts          $ 62,294     $  1,006         2.15%         $ 55,334      $    952          2.29%
 Regular savings accounts (3)                   54,958          715         1.73            47,907           709          1.97
 Savings certificate accounts                  176,782        6,863         5.18           140,343         5,452          5.18
                                              --------     --------                       --------       -------
  Total interest-bearing deposits              294,034        8,584         3.89           243,584         7,113          3.89

  Borrowings                                   175,077        7,712         5.87            91,931         3,816          5.53
                                              --------      -------                        -------       -------
   Total interest-bearing liabilities          469,111     $ 16,296         4.63           335,515      $ 10,929          4.34
                                                           ========                                     ========

Non-interest-bearing liabilities                 4,546                                       8,716
  Total liabilities                            473,657                                     344,231

Stockholders' equity                            31,957                                       40,679
                                              --------                                     --------
  Total liabilities and stockholders' eqity   $505,614                                     $384,910
                                              ========                                     ========
Net interest income                                        $ 10,492                                     $  8,813
                                                           ========                                     ========
Average interest rate spread (4)                                            2.58%                                         2.65%
Net interest margin (5)                                                     2.82%                                         3.12%
Net interest-earning assets (6)               $ 26,499                                     $ 40,934
                                              ========                                     ========
Ratio of average interest-earning assets to
 average interest-bearing liabilities                                     105.65%
</TABLE>
                                    112.20%

(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.

                                       11

<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 and nine  months  ended June 30,  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.


<TABLE>
                                           For the Quarter Ended June 30,       For the Nine Months Ended June 30,
                                                2000 Compared to 1999                  2000 Compared to 1999
                                         -----------------------------------   -------------------------------------
                                          Increase (Decrease)                    Increase (Decrease)
                                                 Due to               Net              Due to                Net
                                         ----------------------                -----------------------
                                          Volume        Rate        Change       Volume        Rate         Change
                                         ---------   ----------    ---------   ----------   ----------    ----------
                                                                       (In thousands)
<S>                                       <C>          <C>          <C>         <C>            <C>          <C>
  Loans                                     $2,546    $     (28)     $ 2,518     $  7,703     $   (224)      $ 7,479
  Mortgage-backed securities                  (301)         142         (159)      (1,069)         415          (654)
  Other securities                              93           47          140           44          123           167
  Other earning assets                          33           48           81           (6)          60            54
                                         ---------   ----------    ---------   ----------   ----------    ----------
Total                                        2,371          209        2,580        6,672          374         7,046
                                         ---------   ----------    ---------   ----------   ----------    ----------
Interest-bearing liabilities:
  NOW, club and money market accounts           34         (23)           11          115          (61)           54
  Regular savings accounts                      33         (21)           12           98          (92)            6
  Savings certificate accounts                 537          154          691        1,411           --         1,411
  Borrowings                                 1,252          160        1,412        3,648          248         3,896
                                         ---------   ---------     ---------   ----------   ----------    ----------
Total                                        1,856          270        2,126        5,272           95         5,367
                                         ---------   ----------    ---------   ----------   ----------    ----------

Net change in net interest income         $    515    $     (61)    $    454     $  1,400    $      279    $   1,679
                                         =========   ==========    =========   ==========   ==========    ==========

</TABLE>


Comparison of Operating Results for the Three Months Ended June 30, 2000
 and 1999

     General.  Net income for the three  months ended June 30, 2000 was $865,000
or diluted  EPS of $0.42  compared  to net income of  $657,000 or diluted EPS of
$0.27 for the quarter ended June 30, 1999.  Basic earnings per common share were
$0.43 for the quarter  ended June 30, 2000 compared to $0.28 for the same period
in 1999. The increase in net income of $208,000 reflects an increase of $454,000
in net interest income, a $248,000  increase in non-interest  income,  partially
offset by a $338,000  increase in non-interest  expense,  a $131,000 increase in
income tax expense and a $25,000 increase in the provision for loan losses.

     Net Interest Income Net interest income for the quarter ended June 30, 2000
was $3.5 million, an increase of $454,000 from $3.1 million for the prior year's
period.  The increase  primarily  reflects  the positive  effect on net interest
income of higher average  interest-earning assets, primarily attributable to the
investment of proceeds from deposit and borrowing growth,  partially offset by a
decline in the average interest rate spread. The decline in the average interest
rate spread  primarily  reflects an increase in the cost of savings  certificate
accounts  and  borrowings  in addition  to a larger  proportion  of  higher-rate

                                       12
<PAGE>

borrowings to total  interest-bearing  funds.  The increase in the cost of funds
was partially offset by an increase in the yield on  mortgage-backed  securities
and other  investments.  The Company's average interest rate spread decreased to
2.52% for the quarter  ended June 30, 2000 from 2.82% for the same  quarter last
year,  while  the net  interest  margin  decreased  to 2.77%  from  3.23% a year
earlier.

     Interest Income.  Interest and dividend income totaled $9.2 million for the
three months ended June 30, 2000,  an increase of $2.6 million  compared to $6.6
million for the three  months ended June 30, 1999.  This  increase  reflects the
effect of a $127.8  million  increase in total average  interest-earning  assets
coupled  with a 27 basis point  increase in the average  yield on such assets to
7.27% for the three months ended June 30, 2000 from 7.00% for the same period in
the prior year.

     Interest  income on loans increased $2.5 million for the three months ended
June 30, 2000  compared to the same  period in the prior  year,  reflecting  the
effect of a $138.4 million increase in the average balance partially offset by a
5 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  $19,000 to $2.3 million for the three months ended
June 30,  2000.  Interest on  mortgage-backed  securities  decreased by $159,000
attributable  to the effects of a $17.9 million  decrease in the average balance
partially offset by a 57 basis point increase in the average yield.  Interest on
other securities increased by $140,000, primarily attributable to a $5.1 million
increase  in the average  balance  and a 49 basis point  increase in the average
yield.

     Interest and dividend  income on other earning  assets  increased  $81,000,
primarily  attributable to a $2.3 million  decrease in the average  balance,  as
well as a 145 basis point increase in the average yield.

     Interest  Expense.  Interest  expense  totaled  $5.7  million for the three
months  ended June 30,  2000,  an increase of $2.1 million from the prior year's
quarter.  Interest expense on deposits  increased  $714,000 compared to the same
period in the prior year,  reflecting the effect of an $54.8 million increase in
the  average  balance  and a 26 basis  point  increase  in the  average  rate on
interest-bearing deposits to 4.01% for the three months ended June 30, 2000 from
3.75%  for the three  months  ended  June 30,  1999.  The  increase  in  average
interest-bearing  deposits  consisted  of a $40.8  million  increase  in average
savings  certificate  accounts (to $189.0 million from $148.2  million),  a $6.3
million  increase  in average  NOW,  club and money  market  accounts  (to $64.1
million  from $57.8  million)  and a $7.7  million  increase in average  regular
savings accounts (to $57.1 million from $49.4 million).

     Interest  expense on borrowings  increased $1.4 million to $2.6 million for
the three  months  ended June 30, 2000 from $1.2  million  for the three  months
ended June 30, 1999, as the Company continued to increase borrowings,  primarily
Federal  Home Loan Bank  (FHLB)  advances,  to  leverage  available  capital and

                                       13
<PAGE>

support further loan growth.  Total  borrowings  averaged $170.7 million for the
three months  ended June 30, 2000 at an average rate of 6.10%  compared to $87.7
million and 5.44%, respectively, for the prior-year quarter. Liability costs are
expected to increase in the near term as borrowings and certificates of deposits
renew at higher  rates.  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  that 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 $50,000 for the three months
ended  June 30,  2000  and  1999,  respectively.  Non-performing  loans  totaled
$285,000  at June 30,  2000,  compared to  $755,000  at  September  30, 1999 and
$706,000 at June 30, 1999. Although non-performing loans has decreased since the
prior year,  the increase in the  provision for loan losses was warranted due to
the  significant  increase  in the loan  portfolio.  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 June
30, 2000 increased $248,000 to $413,000, from $165,000 for the comparable period
in 1999.  The  increase  is  primarily  attributable  to a $172,000  increase in
service charges and fee income,  a $98,000  increase in the net gain on sales of
real estate mortgage loans held for sale, partially offset by a $16,000 decrease
in the  net  gain on  sales  of  securities,  and a  $6,000  decrease  in  other
non-interest income. The increase in service charges and fee income results from
$82,000  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,  as well as increases in
transaction  volume.  The increase in net gain on sales of real estate  mortgage
loans held for sale relates to a $97,000  provision for losses on loans held for
sale charged in the quarter ended June 30, 1999. No such provisions were made in
the recent quarter.

     Non-interest  Expense.  Non-interest  expense  increased  $338,000  to $2.5
million for the three  months  ended June 30, 2000  compared to $2.2 million for
the  three  months  ended  June 30,  1999.  Compensation  and  benefits  expense
increased $212,000 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 $63,000 in other  non-interest  expense,  $49,000 in occupancy  and
equipment expense and $36,000 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. These increases were partially offset by
a $22,000  decrease  in Federal  deposit  insurance  costs due to a decrease  in
insurance rates.

                                       14
<PAGE>
     Income Tax  Expense.  Income tax expense was  $500,000 for the three months
ended June 30, 2000 and $369,000  for the  comparable  1999  period,  reflecting
higher pre-tax income and effective tax rates of 36.6% and 36.0%, respectively.


Comparison of Operating Results for the Nine months Ended June 30, 2000 and 1999

     General.  Net  income  for the nine  months  ended  June 30,  2000 was $2.4
million or diluted earnings per common share of $1.15, compared to net income of
$2.0  million or diluted  earnings per common share of $0.81 for the nine months
ended June 30,  1999.  Basic  earnings  per common share were $1.18 for the nine
months  ended June 30, 2000  compared to $0.82 for the same period in 1999.  The
$372,000  increase in net income was  attributable to a $1.7 million increase in
net interest  income, a $243,000  increase in non-interest  income and a $55,000
decrease in the  provision for loan losses,  partially  offset by a $1.4 million
increase in non-interest expense and a $159,000 increase in income tax expense.

     Net Interest Income. Net interest income for the nine months ended June 30,
2000 was $10.5  million,  as compared to $8.8 million for the same period in the
prior year. The increase  primarily reflects the positive effect on net interest
income of higher average interest earning assets,  primarily attributable to the
investment of proceeds from deposits and borrowing growth and an increase in the
average  interest  rate  spread.  The  Company's  average  interest  rate spread
decreased  to 2.58% for the nine  months  ended June 30, 2000 from 2.65% for the
same period in the prior year,  while the net interest margin decreased to 2.82%
for the 2000 nine month period from 3.12% a year earlier.

     Interest Income. Interest and dividend income totaled $26.8 million for the
nine months ended June 30, 2000,  an increase of $7.1 million  compared to $19.7
million for the nine months  ended June 30,  1999.  This  increase  reflects the
effect of a $119.2 million increase in total average interest-earning assets and
a 22 basis point  increase in the average  yield on such assets to 7.21% for the
nine  months  ended June 30,  2000 from  6.99% for the same  period in the prior
year.

     Interest  income on loans  increased $7.5 million for the nine months ended
June 30, 2000  compared to the same  period in the prior  year,  reflecting  the
effect of a $139.8 million  increase in the average balance  partially offset by
an 14 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  lower  average  yield  reflects  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  $487,000 to $7.0 million for the nine months ended
June 30,  2000  from $7.5  million  for the nine  months  ended  June 30,  1999.
Interest on mortgage-backed  securities  decreased by $654,000,  attributable to
the effects of a $21.3 million decrease in the average balance, partially offset
by a 52 basis point increase in the average yield.  Interest on other securities
increased by $167,000,  primarily attributable to 40 basis point increase in the
average yield as well as a $814,000 increase in the average balance.

                                       15
<PAGE>

     Interest and dividend  income on other earning  assets  increased  $54,000,
primarily  attributable  to a 59  basis  point  increase  in the  average  yield
partially offset by a $167,000 decrease in the average balance.

     Interest  Expense.  Interest  expense  totaled  $16.3  million for the nine
months  ended June 30,  2000,  an increase of $5.4 million from the prior year's
nine months. Interest expense on deposits increased $1.5 million compared to the
same  period in the  prior  year,  reflecting  the  effect  of an $50.5  million
increase  in the average  balance.  The  average  rate paid on  interest-bearing
deposits remained unchanged at 3.89% for the nine months ended June 30, 2000 and
1999.  The increase in average  interest-bearing  deposits  consisted of a $36.5
million increase in average savings certificate accounts (to $176.8 million from
$140.3  million),  a $7.0 million increase in average NOW, club and money market
accounts (to $62.3  million from $55.3  million) and a $7.1 million  increase in
average regular savings accounts (to $55.0 million from $47.9 million).

     Interest  expense on borrowings  increased $3.9 million to $7.7 million for
the nine months  ended June 30, 2000 from $3.8 million for the nine months ended
June 30, 1999.  Total  borrowings for the period averaged $175.1 million with an
average rate of 5.87% compared to $91.9 million and 5.53%, respectively, for the
prior-year's  period.  See  "Liquidity  and  Capital  Resources"  for a  further
discussion of the Company's securities repurchase agreements.

     Provision  for  Loan  Losses.   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 $145,000 and $200,000 for the nine
months ended June 30, 2000 and 1999,  respectively.  Net loan  charge-offs  were
$14,000 for the nine months ended June 30, 2000 compared to $13,000 for the nine
months ended June 30, 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 nine months ended June 30,
2000 increased $243,000, to $1.1 million from $898,000 for the comparable period
in 1999.  The  increase  is  primarily  attributable  to an  increase in service
charges and fee income,  partially  offset by decreases in the net gain on sales
of  loans  held  for  sale,  the net gain on  sales  of  securities,  and  other
non-interest  income.  The increase in service charges and fee income  primarily
results  from  $175,000  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 as well as
increases  in  transaction  volume.  Mortgage  loans sold during the nine months
ended June 30, 2000 amounted to $9.1 million  resulting in net gains of $80,000,
as compared to loan sales of $34.2 million during the nine months ended June 30,
1999,  which  resulted  in net gains of  $278,000.  The 1999 gain was  partially
offset by a $97,000  provision  for losses on loans held for sale charged in the
quarter ended June 30, 1999. Net gain on sales of securities amounted to $10,000
for the nine  months  ended  June 30,  2000  reflecting  sales  of  $185,000  in
available-for-sale  securities  during the period,  while gains of $98,000  were
incurred on sales of $17.6 million in the prior year's period.

                                       16
<PAGE>

     Non-interest  Expense.  Non-interest expense increased $1.4 million to $7.7
million for the nine months  ended June 30,  2000,  compared to $6.3 million for
the nine months ended June 30, 1999. Compensation and benefits expense increased
$804,000  from the  prior-year  nine months  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 $382,000 increase in other non-interest expense is primarily attributable to
costs associated with the proxy fight that was successfully concluded in January
of this year and the three new in-store  branches.  The increases of $193,000 in
occupancy and equipment and $105,000 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.  These increases were partially
offset  by a  $38,000  decrease  in  Federal  deposit  insurance  costs due to a
reduction in insurance rates.

     Income Tax  Expense.  Income tax expense for the nine months ended June 30,
2000  was  $1.4  million  as  compared  to $1.2  million  for the  1999  period,
reflecting  higher  pre-tax  income and  effective tax rates of 37.0% and 38.1%,
respectively.  The decrease in the  effective  tax rate  reflects the  ancillary
benefits from the aforementioned REIT.

Asset Quality

     Non-performing  loans  totaled  $285,000  at June  30,  2000,  compared  to
$755,000  at  September  30,  1999 and  $706,000  June 30,  1999.  The  ratio of
non-performing  loans to total  loans  receivable  was  0.08% at June 30,  2000,
compared  to 0.25%  at  September  30,  1999 and  0.32%  at June 30,  1999.  The
allowance for loan losses was $1.6 million or 0.45% of total loans receivable at
June 30, 2000,  compared to $1.5 million or 0.50% of total loans  receivable  at
September 30, 1999 and $1.5 million or 0.67% at June 30, 1999.  The ratio of the
allowance for loan losses to non-performing  loans was 573.33% at June 30, 2000,
compared to 199.07% at September 30, 1999 and 210.91% at June 30, 1999.

                                       17

<PAGE>

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


<TABLE>

                                                            June 30,        September 30,          June 30,
                                                              2000               1999                1999
                                                            -------          -----------           --------
                                                                        (Dollars in thousands)
<S>                                                         <C>                 <C>                 <C>
Non-accrual  loans past due ninety days or more:
 Real estate  mortgage Loans:
       One- to four-family                                 $      230         $      347         $      406
       Commercial                                                  --                305                198
 Consumer loans                                                    55                103                102
           Total                                                  285                755                706
Real estate owned, net                                             --                 --                183
Total non-performing assets                                $      285         $      755         $      889
                                                           ==========         ==========         ==========

Allowance for loan losses                                  $    1,634         $    1,503          $   1,489
                                                           ==========         ==========         ==========

Ratios:
  Non-performing loans to total loans receivable                0.08%               0.25%              0.32%
  Non-performing assets to total assets                         0.05                0.16               0.23
  Allowance for loan losses to:
     Non-performing loans                                     573.33              199.07             210.91
      Total loans receivable                                    0.45                0.50               0.67

</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 June 30, 2000 was 4.0%, and
the Company's actual liquidity ratio was 7.76%.

    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 June 30,  2000,  the Company had  outstanding  loan  origination
commitments  of $19.4  million,  unadvanced  home equity lines of credit of $3.4
million  and  undisbursed  construction  loans in process of $3.6  million.  The
Company  anticipates  that it will have  sufficient  funds available to meet its
current loan  origination and other  commitments.  At June 30, 2000, the Company

                                       18

<PAGE>

had the  ability to obtain  additional  FHLB  advances  of  approximately  $55.8
million.  Certificates  of deposit  scheduled to mature in one year or less from
June 30,  2000  totaled  $126.5  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 June 30, 2000  consisted of $91.0 million in
borrowings  under  securities  repurchase  agreements and FHLB advances of $74.4
million.  FHLB advances at June 30, 2000 had a weighted average interest rate of
6.38% and a weighted  average  term to maturity of 3.9 years with a call date in
2.0 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 nine  months  ended  June 30,  2000,  the  average  borrowings  under  these
agreements  amounted  to  $103.9  million  and  the  maximum  month-end  balance
outstanding was $114.6 million.

     Additional  information  concerning  outstanding repurchase agreements with
the FHLB of New York as of June 30, 2000 is summarized as follows:

<TABLE>

                            Repurchase Borrowings
--------------------------------------------------------------------------------
                                                              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>

After 30 days but within one year           $    20,000      $    275       6.70%        $ 21,305
After one but within three years                 22,500           163       5.99           25,944
After three but within five years                 8,100            --       5.97            8,242
After five years                                 40,412           339       5.67           46,780
                                            -----------     ---------                    --------

     Total                                  $    91,012      $    777       6.00%        $102,271
                                            ===========     =========                    ========

</TABLE>


(1) The weighted average  remaining term to final maturity was approximately 5.0
years at June 30, 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  1.6
years at June 30, 2000. (2) Included in other  liabilities  in the  consolidated
balance sheet. (3) Represents the fair value of the  mortgage-backed  securities
($72.9 million) and other debt securities ($29.4 million) which were transferred
to the  counterparty,  including  accrued  interest  receivable of $1.0 million.
These securities consist of  available-for-sale  securities and held-to-maturity
securities with fair values of $91.1 million and $11.2 million, respectively.


                                       19
<PAGE>

     At  June  30,  2000,  the  Company's  "amount  at  risk"  under  securities
repurchase  agreements was approximately  $10.5 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 June 30, 2000 the  Association  exceeded all of its  regulatory  capital
requirements  with a tangible  capital level of 6.46% of total adjusted  assets,
which is above  the  required  level of  1.5%;  core  capital  of 6.46% of total
adjusted assets, which is above the required level of 4.0%; and total risk-based
capital of 14.94%,  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 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 June 30, 2000 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.

                                       20
<PAGE>
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 June 30, 2000,  the Company filed a report on form
     8-K for the press  release  issued in  connection  with the second  quarter
     earnings.


                                       21

<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:  August 14, 2000                    /s/  Richard F. Komosinski
                                          --------------------------
                                          Richard F. Komosinski,
                                          President and Chief Executive Officer
                                          (Principal Executive Officer)


Date:  August 14, 2000                    /s/ Joseph D. Roberto
                                          ----------------------
                                          Joseph D. Roberto
                                          Senior Vice President, Treasurer and
                                          Chief Financial Officer
                                          (Principal Financial Officer)

                                       22