UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549 FORM
10-Q (Mark One) x
  QUARTERLY
  REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
  1934For the quarterly period ended March 31, 2001ORo
  TRANSITION
  REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
  1934For 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 incorporation or organization)
  (I.R.S. Employer
  Identification Number)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.  YesxNoo 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, March 31, 2001$0.01 Par Value
  
  2,228,739


YONKERS
FINANCIAL CORPORATION
FORM 10-Q
QUARTERLY PERIOD ENDED MARCH 31, 2001 PART I.  FINANCIAL
  INFORMATIONItem
  1.
  Financial
  Statements (Unaudited)Consolidated Balance Sheets
  at March 31, 2001 and September 30, 2000Consolidated
  Statements of Income for the Three and Six Months Ended March 31, 2001 and
  2000Consolidated
  Statement of Changes in Stockholders Equity for the Six Months Ended
  March  31, 2001Consolidated Statements
  of Cash Flows for the Six Months Ended March 31, 2001 and 2000Notes to
  Consolidated Financial StatementsItem
  2.
  Managements
  Discussion and Analysis of Financial Condition and Results of OperationsItem
  3.
  Quantitative
  and Qualitative Disclosures About Market RiskPART II.  OTHER INFORMATIONItem 1.
  Legal ProceedingsItem 2.
  Changes in SecuritiesItem 3.
  Defaults Upon
  Senior SecuritiesItem
  4.
  Submission
  of Matters to a Vote of Security HoldersItem 5.
  Other InformationItem 6.
  Exhibits and
  Reports on Form 8-KSignature Page


YONKERS FINANCIAL CORPORATION AND SUBSIDIARYCONSOLIDATED BALANCE SHEETS(Unaudited)(In thousands, except share data)  March 31,2001
  September 30,2000ASSETSCash
  and cash equivalents:Cash and due from banks
  $10,215
  $4,178Federal Funds sold
  --
  6,000Total cash and cash equivalents
  10,215
  10,178Securities:Available for sale, at fair value
  (amortized cost of $115,125 at March 31, 2001 and $116,858 at September 30,
  2000)
  115,677
  112,373Held to maturity, at amortized cost
  (fair value of  $14,139 at March 31,
  2001 and $16,081 at September 30, 2000)
  14,046
  16,192Total securities
  129,723
  128,565Real
  estate mortgage loans held for sale, at lower of cost or market value
  3,217
  2,743Loans
  receivable, net:Real estate mortgage loans
  360,667
  354,583Consumer and commercial business loans
  12,895
  11,358Allowance for loan losses
  (1,848)
  (1,703)Total loans receivable, net
  371,714
  364,238Accrued
  interest receivable
  3,209
  3,223Federal
  Home Loan Bank  ("FHLB")
  stock
  9,298
  9,298Office
  properties and equipment, net
  1,708
  1,859Other
  assets
  10,196
  2,770Total assets
  $539,280
  $522,874LIABILITIES AND STOCKHOLDERS'
  EQUITYLiabilities:Deposits
  $356,948
  $325,106Securities repurchase agreements
  73,012
  85,012FHLB advances
  65,320
  72,400Other liabilities
  4,260
  5,474Total liabilities
  499,540
  487,992Commitments
  and contingenciesStockholders'
  equityPreferred stock (par value $0.01 per
  share; 100,000shares authorized;
  none issued or outstanding)
  --
  --Common stock (par value $0.01 per
  share: 4,500,000 shares authorized; 3,570,750 shares issued)
  36
  36Additional paid-in capital
  35,555
  35,443Unallocated common stock  held by employee stock ownership plan
  ("ESOP")
  (1,429)
  (1,572)Unamortized awards of common stock
  under management recognition plan ("MRP")
  (183)
  (329)Treasury stock, at cost (1,342,011
  shares)
  (22,037)
  (22,037)Retained income, substantially
  restricted
  27,448
  26,032Accumulated other comprehensive loss
  (Note 2)
  350
  (2,691)Total stockholders' equity
  39,740
  34,882$539,280
  $522,874  See accompanying notes to consolidated
financial statements


YONKERS FINANCIAL CORPORATION
AND SUBSIDIARYCONSOLIDATED STATEMENTS OF
INCOME(Unaudited)(In thousands, except per share data)  For the Three MonthsEnded March 31,
  For the Six MonthsEnded March 31,2001
  2000
  2001
  2000Interest
  and dividend income:Loans
  $6,999
  $6,463
  $13,856
  $12,505Securities
  2,306
  2,327
  4,639
  4,714Other earning assets
  242
  181
  591
  340Total interest and dividend income
  9,547
  8,971
  19,086
  17,559Interest
  expense:Deposits
  3,640
  2,803
  7,217
  5,478Securities repurchase agreements
  1,084
  1,565
  2,373
  3,179FHLB advances
  1,289
  1,081
  2,608
  1,928Total interest expense
  6,013
  5,449
  12,198
  10,585Net interest income
  3,534
  3,522
  6,888
  6,974Provision
  for loan losses
  75
  35
  150
  70Net interest income after provision
  for loan losses
  3,459
  3,487
  6,738
  6,904Non-interest
  income:Service charges and fees
  398
  346
  764
  615Net gain on sales of real estate mortgage
  loans held for sale
  141
  24
  267
  47Net gain (loss) on sales of securities
  121
  (3)
  206
  1Other
  109
  51
  131
  65Total non-interest income
  769
  418
  1,368
  728Non-interest
  expense:Compensation and benefits
  1,532
  1,396
  2,991
  2,863Occupancy and equipment
  371
  356
  738
  694Data processing service fees
  221
  209
  428
  388Federal deposit insurance costs
  16
  14
  32
  52Other
  612
  671
  1,085
  1,252Total non-interest expense
  2,752
  2,646
  5,274
  5,249Income before income tax expense
  1,476
  1,259
  2,832
  2,383Income
  tax  expense
  544
  465
  1,040
  885Net income
  $932
  $794
  $1,792
  $1,498Earnings
  per common share: (Note 3)Basic
  $0.45
  $0.40
  $0.87
  $0.75Diluted
  0.44
  0.39
  0.85
  0.73  See accompanying notes to financial
statements YONKERS FINANCIAL CORPORATION AND SUBSIDIARYCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY(Unaudited)(Dollars in thousands,
except per share data)



CommonStock
  AdditionalPaid-inCapital
  Unallocated
  CommonStock
  Heldby ESOP
  Unamortized
  Awards ofCommonStockUnder MRP
  Treasury
  Stock
  Retained
  Income
  AccumulatedOther
  ComprehensiveIncome(Loss)
  TotalStockholders'EquityBalance at September 30, 2000
  $36
  $35,443
  $(1,572)
  $(329)
  $(22,037)
  $26,032
  $(2,691)
  34,882Net
  income
  --
  --
  --
  --
  --
  1,792
  --
  1,792Dividends paid ($0.09 per share)
  --
  --
  --
  --
  --
  (376)
  --
  (376)Amortization of MRP awards
  --
  --
  --
  146
  --
  --
  --
  146Tax
  benefits from vestedMRP awards
  --
  24
  --
  --
  --
  --
  --
  24ESOP
  shares released forallocation (14,284 shares)
  --
  88
  143
  --
  --
  --
  --
  231Change
  in net unrealized gain (loss) on available-for salesecurities,
  net of taxes
  --
  --
  --
  --
  --
  --
  3,041
  3,041Balance at March 31, 2001
  $36
  $35,555
  $(1,429)
  $(183)
  $(22,037)
  $27,448
  $350
  $39,740


See accompanying notes to consolidated
financial statements.


YONKERS
FINANCIAL CORPORATION AND SUBSIDIARYCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)(In
thousands)  For the Six MonthsEnded
  March 31,2001
  2000Cash flows from
  operating activities:Net income
  $1,792
  $1,498Adjustments
  to reconcile net income to net cash provided by operating activities:Provision for loan losses
  150
  70ESOP and MRP expense
  377
  387Depreciation and amortization expense
  242
  236Amortization of deferred fees, discounts
  and premiums, net
  328
  106Proceeds from sales of loans
  18,545
  5,590Net gain on sales of real estate
  mortgage loans held for sale
  (267)
  (47)Net gain on sales of securities
  (206)
  (1)Changes in assets and liabilitiesDecrease (increase) in accrued
  interest receivable
  14
  (194)Increase in other assets
  (106)
  (229)(Decrease) increase  in accrued interest payable
  (561)
  527(Decrease) increase in accrued taxes
  payable
  (594)
  844Decrease in accrued expenses and
  other liabilities
  (251)
  (1,580)Net cash provided by operating
  activities
  19,463
  7,207Cash flows from
  investing activities:Purchases of available-for-sale securities
  (21,356)
  (178)Proceeds from principal payments,
  maturities and calls of securities:Available-for-sale
  13,047
  3,458Held-to-maturity
  2,133
  3,053Proceeds from sales of securities:Available-for-sale
  10,058
  98Held-to-maturity
  
  Disbursements for loan originations
  (45,691)
  (79,899)Principal collections on loans
  19,188
  13,031Purchase of FHLB stock
  
  (1,901)Purchase of Bank Owned Life Insurance
  (9,100)
  Other investing cash flows
  (91)
  (324)Net cash used in investing
  activities
  (31,812)
  (62,662)Cash flows from
  financing activities:Net increase in deposits
  31,842
  31,107Net (decrease) increase in borrowings with
  original terms of three months or less:Securities repurchase agreements
  (12,000)
  (15,768)FHLB advances
  1,200
  (19,575)(Repayment of) Proceeds from longer-term
  borrowings
  (8,280)
  64,101Common stock repurchased
  
  (171)Dividends paid
  (376)
  (379)Net cash provided by financing
  activities
  12,386
  59,315Net  increase in cash and cash equivalents
  37
  3,860Cash and cash
  equivalents at beginning of the period
  10,178
  4,651Cash and cash
  equivalents at end of  the period
  $10,215
  $8,511Supplemental
  information:Noncash Transfers-Change in unrealized gain/(loss) on
  valuation of securities available-for-sale, net
  $3,041
  (1,285)Cash paid for-Interest paid
  $12,759
  $10,057Income taxes paid
  1,610
    See
accompanying notes to consolidated financial statements


YONKERS
FINANCIAL CORPORATION AND SUBSIDIARYNotes 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 March 31, 2001 $101.2 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 accounting principles generally accepted in the United
States of America.  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 six months ended March 31, 2001 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 accounting principles
generally accepted in the United States of America 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

Statement of Financial Accounting Standards
(SFAS) No. 130, Reporting Comprehensive Income, 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 six months ended
March 31, 2001 was $4.8 million consisting of a net decrease of $3.0 million in
the after-tax net unrealized loss on available-for-sale securities and a $1.8
million in net income.  For the six
months ended March 31, 2000, total comprehensive income of $214,000 consisted
of net income of $1.5 million, less a net decrease of $1.3 million in the
after-tax net unrealized gain on available-for-sale securities.

(3) Earnings Per
Share

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

The
following is a summary of the number of shares utilized in the Companys EPS
calculations for the three and six months ended March 31, 2001 and 2000.  For purposes of computing basic EPS, net
income applicable to common stock equaled net income for both periods
presented.

For the Three MonthsEnded March 31,
  For the Six MonthsEnded March 31,2001
  2000
  2001
  2000(In thousands)
  (In thousands)Weighted
  average common shares outstanding for computation of basic EPS (1)
  2,056
  2,008
  2,051
  2,007Common-equivalent shares due to the
  dilutive effect of stock options and MRP awards (2)
  62(3)
  44(4)
  45(5)
  55(6)Weighted
  average common shares for computation of diluted EPS
  2,118
  2,052
  2,096
  2,062(1)         Excludes unvested MRP awards and
unallocated ESOP shares that have not been committed to be released.(2)         Computed using the treasury stock
method.(3)         Options to purchase 27,250 shares of
common stock at prices between $18.00 per share and $21.63 per share were
outstanding at March 31, 2001, but were not included in the computation of
diluted EPS because the option exercise prices were greater than the average
market price of the common shares for the quarter ended March 31, 2001.(4)         Options to purchase 20,000 shares of
common stock at prices between $16.63 per share and $21.63 per share were
outstanding at March 31, 2000, but were not included in the computation of
diluted EPS because the option exercise prices were greater than the average
market price of the common shares for the quarter ended March 31, 2000.(5)         Options to purchase 44,250 shares of
common stock at prices between $16.63 per share and $21.63 per share were
outstanding at March 31, 2001, but were not included in the computation of
diluted EPS because the option exercise prices were greater than the average
market price of the common shares for the six months ended March 31, 2001.(6)         Options to purchase 3,000 shares of
common stock at $21.63 per share were outstanding at March 31, 2000, but were
not included in the computation of diluted EPS because the option exercise
price was greater than the average market price of the common shares for the
six months ended March 31, 2000.4)
Accounting for Derivatives and Hedging Activities

Effective
October 1, 2000, the Company adopted the provisions of Financial Accounting No.
133, Accounting for Derivative Instruments and Hedging Activities (SFAS No.
133).  SFAS No. 133 required the
recognition of all derivative financial instruments as either assets or
liabilities in the statement of financial condition and measurement of those
instruments at fair value.  Changes in
the fair value of those derivatives are reported in current operations or other
comprehensive income depending on the use of the derivative and whether it
qualifies for hedge accounting.  The
accounting for gains and losses associated with changes in the fair value of a
derivative and the effect on the consolidated financial statements will depend
on its hedge designation and whether the hedge is highly effective in achieving
offsetting changes in the fair value or cash flows of the asset or liability hedged.  Under the provisions of SFAS No. 133, the
method used for assessing the effectiveness of a hedging derivative, as well as
the measurement approach for determining the ineffective aspects of the hedge,
must have been established at the inception of the hedge.

The
derivative instruments held by the Company as of October 1, 2000 consisted of
forward loan sales commitments and fixed-rate conforming loan commitments.  The forward loan sales commitments and the
fixed-rate conforming loan commitments do not qualify for hedge accounting
under the provisions of SFAS No. 133. 
Based on market rates and economic conditions on October 1, 2000, the
adoption of SFAS No. 133 as of October 1, 2000 did not have a material effect
on the Companys consolidated financial statements, and accordingly, these is
no cumulative effect of a change in accounting principle presented.  In addition, the effect of the adjustment to
fair value of the Companys derivatives during the six months ended March 31,
2001 was not significant.  However,
there may be increased volatility in net income and stockholders equity on an
ongoing basis as a result of accounting for derivative instruments in
accordance with SFAS No. 133.

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 March 31, 2001 and
September 30, 2000

Total
assets at March 31, 2001 amounted to $539.3 million, representing an increase
of  $16.4 million from $522.9 at
September 30, 2000. Asset growth during the period reflected increases in total
loans and other assets funded by deposits reflecting the continued growth of
the Companys retail franchise.

Overall,
total loans  (loans receivable and
mortgage loans held for sale) increased $8.0 million to $375.0 million at March
31, 2001 from $367.0 million at September 30, 2000, substantially reflecting
increases in multi-family and mixed-use commercial real estate loan balances.
The loan growth during the six months ended March 31, 2001 is primarily
attributable to loan originations net of repayments of $26.5 million less loans
sold of $18.5 million. Other assets increased $7.4 million to $10.2 million at
March 31, 2001 from $2.8 million at September 30, 2000 primarily reflecting the
Companys $9.0 million purchase of Bank-Owned Life Insurance (BOLI).  In January 2001, the Company invested in
BOLI policies to fund employee benefit costs. 
The cash surrender value of the BOLI policies is recorded on the
Companys balance sheet as other assets and the change in the cash surrender
value is recorded as other income. 
Total securities at March 31, 2001 increased $1.1 million to $129.7
million from $128.6 million at September 30, 2000.

Deposit
liabilities increased $31.8 million to $356.9 million at March 31, 2001 from
$325.1 million at September 30, 2000. 
The increase in deposit liabilities is primarily attributable to the
expansion of the Companys retail franchise as well as aggressive cross-selling
programs. Total borrowings decreased by $19.1 million to $138.3 million at
March 31, 2001 from $157.4 million at September 30, 2000.

Stockholders
equity increased by $4.8 million to $39.7 million at March 31, 2001 from  $34.9 million at September 30, 2000.  The increase is primarily attributable to an
improvement of $3.0 million in the net unrealized after tax gain in the market
value of securities available for sale, an increase in net income retained after
dividends of $1.4 million, and a combined increase of $401,000 relating to the
employee stock ownership plan and the management recognition plan.  The ratio of stockholders equity to total
assets increased to 7.4% at March 31, 2001 from 6.7 % at September 30,
2000.  Book value per share (computed
based on total shares issued less treasury shares) increased to $17.83 at March
31, 2001, from $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 and six months ended March 31, 2001 and 2000.
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.


For the Quarter Ended March 31,2001
  2000AverageBalance
  Interest
  Average
  Yield/Cost
  AverageBalanceInterest
  AverageYield/CostAssets
  (Dollars in thousands)Interest-earning
  assets:Loans (1)
  $373,655
  $6,999
  7.49%
  $354,616
  $6,463
  7.29%Mortgage-backed securities (2)
  84,339
  1,424
  6.75
  91,576
  1,570
  6.86Other securities (2)
  48,065
  882
  7.34
  40,537
  757
  7.47Other earning assets
  19,216
  242
  5.04
  13,463
  181
  5.38Total interest-earning assets
  525,275
  $9,547
  7.27
  500,192
  $8,971
  7.17Allowance for loan
  losses
  (1,797)
  
  
  (1,544)Non-interest-earning
  assets
  18,043
  
  
  10,936Total assets
  $541,521
  
  
  $509,584Liabilities and 
  Stockholders' EquityInterest-bearing
  liabilities:NOW, club and money market accounts
  $64,460
  $324
  2.01%
  $62,706
  $338
  2.16%Regular savings accounts (3)
  60,657
  300
  1.98
  54,545
  234
  1.72Savings certificate accounts
  207,811
  3,016
  5.81
  172,498
  2,231
  5.17Total interest-bearing deposits
  332,928
  3,640
  4.37
  289,749
  2,803
  3.87Borrowings
  151,603
  2,373
  6.26
  182,424
  2,646
  5.80Total interest-bearing liabilities
  484,531
  $6,013
  4.96
  472,173
  $5,449
  4.62Non-interest-bearing
  liabilities
  20,075
  
  
  5,625Total liabilities
  504,606
  
  
  477,798Stockholders' equity
  36,915
  
  
  31,786Total liabilities and stockholders'
  equity
  $541,521
  
  
  $509,584Net interest income
  
  $3,534
  
  
  $3,522Average interest rate
  spread (4)
  
  
  2.31%
  
  
  2.55%Net interest margin
  (5)
  
  
  2.69%
  
  
  2.82%Net interest-earning
  assets (6)
  $40,744
  
  
  $28,019Ratio of average
  interest-earning assets to average interest-bearing liabilities
  
  
  108.41%
  
  
  105.93%  (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.


For the Six Months Ended March 31,2001
  2000AverageBalance
  Interest
  Average
  Yield/Cost
  AverageBalanceInterest
  Average
  Yield/CostAssets
  (Dollars in thousands)Interest-earning
  assets:Loans (1)
  $371,334
  $13,856
  7.46%
  $341,644
  $12,505
  7.32%Mortgage-backed securities (2)
  84,603
  2,870
  6.78
  93,770
  3,197
  6.82Other securities (2)
  47,821
  1,769
  7.40
  40,904
  1,517
  7.42Other earning assets
  20,918
  591
  5.65
  13,254
  340
  5.13Total interest-earning assets
  524,676
  $19,086
  7.28
  489,572
  $17,559
  7.17Allowance for loan
  losses
  (1,762)
  
  
  (1,537)Non-interest-earning
  assets
  13,817
  
  
  11,668Total assets
  $536,731
  
  
  $499,703Liabilities and 
  Stockholders' EquityInterest-bearing
  liabilities:NOW, club and money market accounts
  $64,807
  $675
  2.08%
  $61,390
  $665
  2.17%Regular savings accounts (3)
  59,145
  604
  2.04
  53,910
  473
  1.75Savings certificate accounts
  202,681
  5,938
  5.86
  170,676
  4,340
  5.09Total interest-bearing deposits
  326,633
  7,217
  4.42
  285,976
  5,478
  3.83Borrowings
  156,102
  4,981
  6.38
  177,258
  5,107
  5.76Total interest-bearing liabilities
  482,735
  $12,198
  5.05
  463,234
  $10,585
  4.57Non-interest-bearing
  liabilities
  18,071
  
  
  4,560Total liabilities
  500,806
  
  
  467,794Stockholders' equity
  35,925
  
  
  31,909Total liabilities and stockholders'
  equity
  $536,731
  
  
  $499,703Net interest income
  
  $6,888
  
  
  $6,974Average interest rate
  spread (4)
  
  
  2.23%
  
  
  2.60%Net interest margin
  (5)
  
  
  2.63%
  
  
  2.85%Net interest-earning
  assets (6)
  $41,941
  
  
  $26,338Ratio of average
  interest-earning assets to average interest-bearing liabilities
  
  
  108.69%
  
  
  105.69%  (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.


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 six months ended March 31, 2001, 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 March 31,2001
  Compared to 2000
  For the Six Months Ended March 31,2001
  Compared to 2000Increase (Decrease)
  Due to
  
  Increase (Decrease)Due
  toNet
  NetVolume
  Rate
  Change
  Volume
  Rate
  Change(In thousands)Interest-earning
  assets:Loans
  $355
  $181
  $536
  $1
  $1,351
  $1,352Mortgage-backed securities
  (121)
  (25)
  (146)
  (308)
  (19)
  (327)Other securities
  138
  (13)
  125
  256
  (4)
  252Other earning assets
  73
  (12)
  61
  214
  37
  251Total
  445
  131
  576
  163
  1,365
  1,528Interest-bearing
  liabilities:NOW, club and money market accounts
  9
  (23)
  (14)
  37
  (27)
  10Regular savings accounts
  28
  38
  66
  48
  83
  131Savings certificate accounts
  489
  296
  785
  884
  714
  1,598Borrowings
  (472)
  199
  (273)
  (644)
  518
  (126)Total
  55
  510
  565
  325
  1,288
  1,613Net change in net
  interest income
  $390
  $(379)
  $12
  $(162)
  $77
  $(85) Comparison of Operating Results for the Three Months Ended
March 31, 2001 and 2000. General.Net income for the three months ended March
31, 2001 was $932,000 or diluted EPS of $0.44 compared to net income of
$794,000 or diluted EPS of $0.39 for the quarter ended March 31, 2000.  Basic earnings per common share were $0.45
for the quarter ended March 31, 2001 compared to $0.40 for the same period in
2000. The increase in net income of $138,000 reflects an increase of $351,000
in non-interest income, a $12,000 increase in net interest income, partially
offset by a $106,000 increase in non-interest expense, a $79,000 increase in
income tax expense, and a $40,000 increase in the provision for loan losses.  Net Interest IncomeNet interest income for
the quarter ended March 31, 2001 was $3.5 million, an increase of $12,000
compared to the same period in the prior year. 
The increase primarily reflects an increase in net interest-earning
assets (total interest-earning assets less total interest-bearing liabilities)
primarily attributable to the investment proceeds of deposit growth, partially
offset by a decline in the average interest rate spread.  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 2.31% for the quarter ended March 31, 2001 from 2.55%
for the same quarter last year, while the net interest margin decreased to
2.69% for the 2001 three month period from 2.82% a year earlier. Interest Income.Interest and dividend income totaled $9.5 million for the three months ended
March 31, 2001, an increase of $576,000 compared to $9.0 million for the three
months ended March 31, 2001.  This
increase reflects the effect of a $25.1 million increase in total average
interest-earning assets coupled with a 10 basis point increase in the average
yield on such assets to 7.27% for the three months ended March 31, 2001 from
7.17% for the same period in the prior year. Interest
income on loans increased $536,000 for the three months ended March 31, 2001
compared to the same period in the prior year, reflecting the effect of a $19.0
million increase in the average balance and a 20 basis point increase in the
average yield.  The increase in the
average balance of loans and the average yield was primarily attributable to an
increase in multi-family and mixed-use commercial real estate loans with higher
yields. On
a combined basis, interest and dividend income on mortgage-backed and other
securities was $2.3 million for the three months ended March 31, 2001, a
decrease of $21,000 compared to the same period in the prior year.  Interest on mortgage-backed securities
decreased by $146,000 attributable to the effects of a $7.2 million decrease in
the average balance and an 11 basis point decrease in the average yield.
Interest on other securities increased by $125,000, primarily attributable to a
$7.5 million increase in the average balance, partially offset by a 13 basis
point decrease in the average yield. Interest
and dividend income on other earning assets increased $61,000, primarily
attributable to a $5.7 million increase in the average balance, partially
offset by a 34 basis point decrease in the average yield. Interest Expense.
Interest expense totaled $6.0 million for the three months ended March 31,
2001, an increase of $564,000 from the prior years quarter. Interest
expense on deposits increased $837,000 compared to the same period in the prior
year, reflecting the effect of a $43.2 million increase in the average balance
and a 50 basis point increase in the average rate on interest-bearing deposits
to 4.37% for the three months ended March 31, 2001 from 3.87% for the three
months ended March 31, 2000.  The increase
in average interest-bearing deposits consisted of a $35.3 million increase in
average savings certificate accounts (to $207.8 million from $172.5 million), a
$6.1 million increase in average regular savings accounts (to $60.6 million
from $54.5 million) and a $1.8 million increase in average NOW, club and money
market accounts (to $64.5 million from $62.7 million).

Interest
expense on borrowings decreased $273,000 to $2.4 million for the three months
ended March 31, 2001 from $2.7 million for the three months ended March 31,
2000.  Total borrowings averaged $151.6
million for the three months ended March 31, 2001 at an average rate of 6.26%
compared to $182.4 million and 5.80%, respectively, for the prior-year
quarter.  See Liquidity and Capital
Resources for further discussion of the Companys securities repurchase
agreements.

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

The provision for loan losses was $75,000 and
$35,000 for the three months ended March 31, 2001 and 2000, respectively.  The higher provision in the quarter ended
March 31, 2001 reflects an increase in non-performing assets as well as an
increase in multi-family and mixed-use commercial real estate loans, which
present a higher level of risk. 
Non-performing loans totaled $489,000 at March 31, 2001, compared to
$123,000 at September 30, 2000 and $400,000 at March 31, 2000.  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 March 31, 2001 increased $351,000 to $769,000, from
$418,000 for the comparable period in 2000. 
The increase primarily reflects a $124,000 increase in the net gain on
sales of securities, a $117,000 increase in the net gain on sales of real
estate mortgage loans held for sale, a $58,000 increase in other non-interest
income, and a $52,000 increase in service charges and fee income.  The increase in the net gain on sales of
securities reflects sales of $8.6 million for the three months ended March 31,
2001, as compared to sales of $82,000 for the period ended March 31, 2000.  The increase in the net gain on sale of real
estate mortgage loans held for sale reflects mortgage loans sold of $9.4
million for the three months ended March 31, 2001, as compared to loan sales of
$2.6 million for the period ended March 31, 2000.  The increase in sales volume is consistent with managements
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 and mixed-use commercial real estate loans.  The increase in other non-interest income
primarily reflects income from the Companys purchase of BOLI.  The increase in service charges and fee
income resulted primarily from increases in transaction volume.

Non-interest Expense.  Non-interest expense increased $106,000 to
$2.7 million for the three months ended March 31, 2001, compared to $2.6
million for the three months ended March 31, 2000.  The increase is primarily attributable to an increase of $136,000
in compensation and benefits expense.  
The increase in compensation and benefits expense primarily reflects an
increase in the number of employees and merit and performance-based increases
for management and staff members.

Income Tax Expense.  Income tax expense was $544,000 for the
three months ended March 31, 2001 and $465,000 for the comparable 2000 period,
reflecting higher pre-tax income and effective tax rates of 36.9% for both
periods.

Comparison of Operating Results for the Six Months Ended
March 31, 2001 and 2000

General.Net income for the six months ended March
31, 2001 was $1.8 million or diluted earnings per common share of $0.85,
compared to net income of $1.5 million or diluted earnings per common share of
$0.73 for the six months ended March 31, 2000. The $294,000 increase in net
income was attributable to a $640,000 increase in non-interest income,
partially offset by a $155,000 increase in income tax expense, a $86,000
decrease in net interest income, a $80,000 increase in the provision for loan
losses, and a $25,000 increase in non-interest expense.

Net Interest Income.Net
interest income for the six months ended March 31, 2001 was $6.9 million, a
decrease of $86,000 from $7.0 million for the same period in the prior year.
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 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 in a somewhat flat yield curve
environment and the extension of shorter-term borrowings to longer-term
borrowings.  The Companys average
interest rate spread decreased to 2.23% for the six months ended March 31, 2001
from 2.60% for the same period in the prior year, while the net interest margin
decreased to 2.63% for the 2001 six month period from 2.85% a year earlier.

Interest Income.Interest and dividend income totaled $19.1 million for the six months ended
March 31, 2001, an increase of $1.5 million compared to $17.6 million for the
six months ended March 31, 2000.  This
increase reflects the effect of a $35.1 million increase in total average
interest-earning assets and an 11 basis point increase in the average yield on
such assets to 7.28% for the six months ended March 31, 2001 from 7.17% for the
same period in the prior year.

Interest
income on loans increased $1.3 million for the six months ended March 31, 2001
compared to the same period in the prior year, reflecting the effect of a $29.7
million increase in the average balance and a 14 basis point increase in the
average yield. The increases in the average balance of loans and average yield
was primarily attributable to an increase in multi-family and mixed-use commercial
real estate loans with higher yields.

On a
combined basis, interest and dividend income on mortgage-backed and other
securities decreased $75,000 to $4.6 million for the six months ended March 31,
2001 from $4.7 million for the six months ended March 31, 2000.  Interest on mortgage-backed securities
decreased by $327,000, attributable to the effects of a $9.2 million decrease
in the average balance and a 4 basis point decrease in the average yield.  Interest on other securities increased by
$252,000, primarily attributable to a $6.9 million increase in the average
balance, partially offset by a 2 basis point decrease in the average yield.

Interest
and dividend income on other earning assets increased $251,000, primarily
attributable to a $7.7 million increase in the average balance and a 52 basis
point increase in the average yield.

Interest Expense.
Interest expense totaled $12.2 million for the six months ended March 31, 2001
an increase of $1.6 million from the prior years six months.  Interest expense on deposits increased $1.7
million compared to the same period in the prior year, reflecting the effect of
an $40.6 million increase in the average balance and a 59 basis point increase
in the average rate on interest-bearing deposits to 4.42% for the six months
ended March 31, 2001 from 3.83% for the six months ended March 31, 2000.  The increase in average interest-bearing
deposits consisted of a $32.0 million increase in average savings certificate
accounts (to $202.7 million from $170.7 million), a $5.2 million increase in
average regular savings accounts (to $59.1 million from $53.9 million) and a
$3.4 million increase in average NOW, club and money market accounts (to $64.8
million from $61.4 million).

Interest
expense on borrowings decreased $126,000 to $5.0 million for the six months
ended March 31, 2001 from $5.1 million for the six months ended March 31, 2000.
Total borrowings averaged $156.1 million for the six months ended March 31,
2001 at an average rate of 6.38% compared to $177.2 million and 5.76%,
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 $150,000 and $70,000 for the six
months ended March 31, 2001 and 2000, respectively. The higher provision in the
six month period ended March 31, 2001 reflects an increase in non-performing
assets as well as an increase in multi-family and mixed-use commercial real
estate loans, which present a higher risk. 
Net loan charge-offs were $5,000 for the six months ended March 31, 2001
compared to net charge-offs of $7,000 for the six months ended March 31, 2000.
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 six months ended March 31, 2001 increased $640,000 to $1.4 million from
$728,000 for the comparable period in 2000. 
The increase primarily reflects a $220,000 increase in the net gain on
sales of real estate mortgage loans held for sale, a $205,000 increase in the
net gain on sales of securities, a $149,000 increase in service charges and fee
income, and a $66,000 increase in other non-interest income. The increase in
the net gain on sale of real estate mortgage loans held for sale reflects
mortgage loan sold of $18.3 million for the six months ended March 31, 2001, as
compared to loan sales of $5.6 million for the period ended March 31,
2000.  The increase in sales volume is
consistent with managements 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 and mixed-use commercial real
estate loans.   The increase in the net
gain on sales of securities, reflects sales of $10.1 million for the six months
ended March 31, 2001, as compared to sales of $98,000 for the period ended
March 31, 2000.  The increase in service
charges and fee income resulted primarily from increases in transaction
volume.  The increase in other non-interest
income primarily reflects income from the Companys purchase of BOLI.

Non-interest Expense.  Non-interest expense was $5.3 million for
the six months ended March 31, 2001 an increase of $25,000 compared to the same
period in the prior year.  Increases in
compensation and benefits expense of $128,000, occupancy and equipment expense
of $44,000, and data processing service fees of $40,000, were partially offset
by decreases in other non-interest expense of $167,000 and federal deposit
insurance costs of $20,000.  The
increase in compensation and benefits expense primarily reflects an increase in
the number of employees and merit and performance-based increases for
management and staff members.  The
decrease in other non-interest expense is primarily attributable to
approximately $212,000 in proxy fight expenses reflected in the six-month
period ended March 31, 2000.  The
decrease in federal deposit insurance costs reflects a reduction in insurance
rates.

Income Tax Expense.
Income tax expense for the six months ended March 31, 2001 was $1.0 million as
compared to $885,000 for the 2000 period, reflecting higher pre-tax income and
effective tax rates of 36.7% and 37.1%, respectively.

Asset Quality

Non-performing
loans totaled $489,000 at March 31, 2001, compared to  $123,000 at September 30, 2000 and $400,000 at March 31,
2000.  The ratio of non-performing loans
to total loans receivable was 0.13% at March 31, 2001, compared to 0.03% at
September 30, 2000 and 0.11% at March 31, 2000. The allowance for loan losses
was $1.9 million or 0.49% of total loans receivable at March 31, 2001, compared
to $1.7 million or 0.46% of total loans receivable at September 30, 2000 and
$1.6 million or 0.43% at March 31, 2000. The ratio of the allowance for loan
losses to non-performing loans was 377.91% at March 31, 2001, compared to
1384.55% at September 30, 2000 and 391.50% at March 31, 2000.

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

March 31,2001
  September 30,2000
  March 31,2000(Dollars in
  thousands)Non-accrual loans past due ninety
  days or more:Real estate mortgage loans:One- to four-family
  $270
  $109
  $230Commercial
  156
  --
  105Consumer loans
  63
  14
  65Total
  489
  123
  400Real estate owned, net
  --
  --
  --Total non-performing assets
  $489
  $123
  $400Allowance for loan losses
  $1,848
  $1,703
  $1,566Ratios:Non-performing loans to total loans receivable
  0.13%
  0.03%
  0.11%Non-performing assets to total assets
  0.09
  0.02
  0.08Allowance for loan losses to:Non-performing loans
  377.91
  1384.55
  391.50Total loans receivable
  0.49
  0.46
  0.43Liquidity 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 March 31, 2001 was 4.0%, and the
Company's actual liquidity ratio was 6.45%.

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 March 31, 2001, the
Company had outstanding loan origination commitments of $34.4 million,
unadvanced home equity lines of credit of $2.9 million and undisbursed
construction loans in process of $5.8 million. 
The Company anticipates that it will have sufficient funds available to
meet its current loan origination and other commitments.  At March 31, 2001, the Company had the
ability to obtain additional FHLB advances of approximately $69.1 million.  Certificates of deposit scheduled to mature
in one year or less from March 31, 2001 totaled $150.5 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 March 31, 2001 consisted of $73.0 million in borrowings
under securities repurchase agreements and FHLB advances of $65.3 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 six months ended March 31, 2001, the average borrowings under these
agreements amounted to $78.8 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 March 31, 2001 is summarized as follows:

Remaining Term to
  Final Maturity (1)
  Amount
  AccruedInterestPayable (2)
  WeightedAverageRate
  Fair
  Valueof Collateral
  Securities (3)(Dollars in Thousands)Within
  30 days
  $
  $
  ----%
  $After
  30 days but within one year
  6,500
  51
  7.20
  6,617After
  one but within three years
  11,000
  29
  5.99
  11,160After
  three but within five years
  10,100
  31
  6.18
  14,068After
  five years
  45,412
  408
  5.69
  46,856Total
  $73,012
  $519
  5.93%
  $78,701(1) The weighted average remaining term
to final maturity was approximately 6.0 years at March 31, 2001. 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 March 31, 2001.
(2) Included in other liabilities in the consolidated balance sheet.
(3) Represents the fair value of the mortgage-backed securities ($53.6 million)
and other debt securities ($25.1 million) which were transferred to the
counterparty, including accrued interest receivable of  $731.000. 
These securities consist of available-for-sale securities and held-to-maturity
securities with fair values of $69.7 million and $9.0 million, respectively.

At
March 31, 2001, the Companys amount at risk under securities repurchase
agreements was approximately $5.2 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 of maturity:

2001
  2000Amount
  Rate
  Amount
  Rate(Dollars in thousands)FHLB advances
  maturing:Within 30 days
  $4,200
  5.41
  %
  $17,500
  6.10
  %After
  30 days but within one year
  
  
  25,000
  6.47After
  one but within three years
  10,000
  6.54
  10,000
  6.42After
  three but within five years
  32,000
  7.05
  11,000
  7.31After
  five years
  19,120
  6.81
  15,000
  4.36Total
  $65,320
  6.80
  %
  $78,500
  6.09
  %The
weighted average period to maturity date for the FHLB advances outstanding at
March 31, 2001 was 4.3 years, with a weighted average period to call of 4.1
years. During the six months ended March 31, 2001, the Companys average FHLB
advances outstanding were $77.2 million, and the maximum month end balance
outstanding was $83.4 million.

At
March 31, 2001 the Association exceeded all of its regulatory capital
requirements with a tangible capital level of 6.76% of total adjusted assets,
which is above the required level of 1.5%; core capital of 6.76% of total
adjusted assets, which is above the required level of 4.0%; and total
risk-based capital of 15.02%, 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

The
Companys most significant form of market risk is interest rate risk, as the
majority of the Companys assets and liabilities are sensitive to changes in
interest rates.  Other types of market
risk, such as foreign exchange risk and commodity price risk, do not arise in
the normal course of the Companys business activities.

Management
is responsible for monitoring and limiting the Companys exposure to interest
rate risk within established guidelines while maximizing net interest
income.  The Company will continue to
monitor its interest rate sensitivity with the primary objective to prudently
structure the balance sheet so that movements of interest rates on assets and
liabilities are highly correlated and produce a reasonable net interest margin
even in periods of volatile interest rates. 
Further discussion on market risk is in the Companys Form 10-K for the
year ended September 30, 2000.

During
the quarter ended March 31, 2001, there were no significant changes in the
Companys assessment of market risk.

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

At the Company's annual meeting of stockholders held on January
25, 2001, the following matters were voted upon, with the results of the voting
on such matters indicated:

1. 
        Election of the following
persons to serve a three–year term as directors of the Company:

NOMINEE
  FOR
  WITHHELDP Anthony Sarubbi
  2,021,613
  27,172Charles D Lohrfink
  2,021,399
  27,386Broker Unvoted:
  20,7882.   
      Ratification of the
appointment of KPMG LLP as the independent auditors of the Company for the
fiscal year ending September 30, 2001:

For:
  2,036,396Against:
  10,989Abstained:
  1,400Broker
  Non-Vote:
  20,788Item 5.  Other
Information

None

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

Exhibit
  No.
  Name27
  Financial
  Data Schedule(b)  Reports on Form 8-K

During
the quarter ended March 31, 2001 , the Company file one report on form 8-K.

On
January 26, 2001, under Item 5, the Company issued a press release in conjunction
with first quarter earnings and dividend declaration.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:  May 12, 2001
  /s/  Richard F. KomosinskiRichard F. Komosinski,President and Chief Executive Officer(Principal Executive Officer)Date:  May 12, 2001
  /s/
  Joseph D. RobertoJoseph D. RobertoSenior Vice President, Treasurer andChief Financial Officer(Principal Financial Officer)