<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

(Mark One)

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

       For the quarterly period ended December 31, 2001

                                       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.

<TABLE>
<CAPTION>

Classes of Common Stock          Number of Shares Outstanding, December 31, 2001
-----------------------          -----------------------------------------------
<S>                              <C>
     $0.01 Par Value                               2,323,981

</TABLE>


<PAGE>


                          YONKERS FINANCIAL CORPORATION
                                    FORM 10-Q
                    QUARTERLY PERIOD ENDED DECEMBER 31, 2001



<TABLE>
<CAPTION>
                                                                                 Page
                                                                                Number
                                                                                ------
<S>           <C>                                                               <C>
                          PART I. FINANCIAL INFORMATION

Item 1.       Financial Statements (Unaudited)
              Consolidated Balance Sheets at December 31, 2001 and
                 September 30, 2001 ............................................    2
              Consolidated Statements of Operations for the Three Months
                 Ended December 31, 2001 and 2000 ..............................    3
              Consolidated Statement of Changes in Stockholders' Equity
                 for the Three Months Ended December 31, 2001 ..................    4
              Consolidated Statements of Cash Flows for the Three Months
                 Ended December 31, 2001 and 2000 ..............................    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 ...................................................   17


                           PART II. OTHER INFORMATION

Item 1.       Legal Proceedings ................................................   17
Item 2.       Changes in Securities ............................................   17
Item 3.       Defaults Upon Senior Securities ..................................   17
Item 4.       Submission of Matters to a Vote of Security Holders ..............   17
Item 5.       Other Information ................................................   17
Item 6.       Exhibits and Reports on Form 8-K .................................   18
              Signature Page ...................................................   19
</TABLE>


                                       1
<PAGE>


                  YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,       SEPTEMBER 30,
                                                                                           2001               2001
                                                                                           ----                ----
<S>                                                                                      <C>                 <C>
ASSETS

Cash and cash equivalents:
    Cash and due from banks                                                              $  48,483           $  31,801
                                                                                         ---------           ---------
         Total cash and cash equivalents                                                    48,483              31,801
                                                                                         ---------           ---------
Securities:
     Available for sale, at fair value (amortized cost of $91,336 at
       December 31, 2001 and $106,250 at September 30, 2001)                                91,984             108,025
     Held to maturity, at amortized cost (fair value of  $15,170 at
       December 31, 2001 and $16,589 at September 30, 2001)                                 15,125              16,365
                                                                                         ---------           ---------
          Total securities                                                                 107,109             124,390
                                                                                         ---------           ---------
Real estate mortgage loans held for sale, at lower of cost or market value                  10,833               5,567
                                                                                         ---------           ---------
Loans receivable, net:
     Real estate mortgage loans                                                            378,730             375,337
     Consumer and commercial business loans                                                 13,422              13,925
     Allowance for loan losses                                                              (2,069)             (2,002)
                                                                                         ---------           ---------
          Total loans receivable, net                                                      390,083             387,260
                                                                                         ---------           ---------
Accrued interest receivable                                                                  2,802               3,141
Federal Home Loan Bank  ("FHLB") stock                                                       6,557               6,557
Office properties and equipment, net                                                         1,367               1,475
Cash surrender value of bank owned life insurance                                            9,523               9,379
Other assets                                                                                 1,875               1,523
                                                                                         ---------           ---------
          Total assets                                                                   $ 578,632           $ 571,093
                                                                                         =========           =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
     Deposits                                                                            $ 402,822           $ 389,523
     Securities repurchase agreements                                                       66,512              66,512
     FHLB advances                                                                          62,972              63,061
     Other liabilities                                                                       4,643               9,416
                                                                                         ---------           ---------
          Total liabilities                                                                536,949             528,512
                                                                                         ---------           ---------

Commitments and contingencies

Stockholders' equity
     Preferred stock (par value $0.01 per share; 100,000
        shares authorized; none issued or outstanding)                                          --                  --
     Common stock (par value $0.01 per share: 4,500,000
        shares authorized; 3,570,750 shares issued)                                             36                  36
     Additional paid-in capital                                                             35,382              35,713
     Unallocated common stock  held by employee stock
        ownership plan ("ESOP")                                                             (1,215)             (1,287)
     Unamortized awards of common stock under  management
        recognition plan ("MRP")                                                               (29)                (37)
     Treasury stock, at cost (1,246,769 shares at December 31, 2001 and
        1,342,011 shares at September 30, 2001)                                            (21,442)            (22,037)
     Retained income, substantially restricted                                              28,543              29,074
     Accumulated other comprehensive loss                                                      408               1,119
                                                                                         ---------           ---------
          Total stockholders' equity                                                        41,683              42,581
                                                                                         ---------           ---------
                                                                                         $ 578,632           $ 571,093
                                                                                         =========           =========
</TABLE>


See accompanying notes to consolidated financial statements


                                       2
<PAGE>


                  YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                            FOR THE THREE MONTHS
                                                                                              ENDED DECEMBER 31,
                                                                                       -----------------------------
                                                                                          2001                2000
                                                                                          ----                ----
<S>                                                                                      <C>                 <C>
Interest and dividend income:
   Loans                                                                                 $ 7,318             $ 6,857
   Securities                                                                              1,673               2,333
   Other earning assets                                                                      214                 350
                                                                                         -------             -------
     Total interest and dividend income                                                    9,205               9,540
                                                                                         -------             -------
Interest expense:
   Deposits                                                                                3,427               3,577
   Securities repurchase agreements                                                          988               1,289
   FHLB advances                                                                           1,060               1,320
                                                                                         -------             -------
     Total interest expense                                                                5,475               6,186
                                                                                         -------             -------

       Net interest income                                                                 3,730               3,354

Provision for loan losses                                                                     83                  75
                                                                                         -------             -------
       Net interest income after provision for loan losses                                 3,647               3,279
                                                                                         -------             -------

Non-interest income:
   Service charges and fees                                                                  469                 366
   Net gain on sales of real estate mortgage
      loans held for sale                                                                    252                 126
   Net gain on sales of securities                                                            17                  85
   Other                                                                                     186                  22
                                                                                         -------             -------
      Total non-interest income                                                              924                 599
                                                                                         -------             -------

Non-interest expense:
   Compensation and benefits                                                               1,784               1,459
   Occupancy and equipment                                                                   340                 367
   Data processing service fees                                                              227                 207
   Merger related expenses                                                                 2,166                  --
   Other                                                                                     618                 489
                                                                                         -------             -------
      Total non-interest expense                                                           5,135               2,522
                                                                                         -------             -------

        (Loss) income before income tax (benefit) expense                                   (564)              1,356

Income tax  (benefit) expense                                                               (245)                496
                                                                                         -------             -------
       Net (loss) income                                                                 $  (319)            $   860
                                                                                         =======             =======

Earnings (loss) per common share:
       Basic                                                                             $ (0.15)            $  0.42
       Diluted                                                                             (0.15)               0.41
                                                                                         =======             =======
</TABLE>


See accompanying notes to consolidated financial statements



                                       3
<PAGE>



                  YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (UNAUDITED)
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                             UNALLOCATED  UNAMORTIZED
                                                                               COMMON      AWARDS OF
                                                                ADDITIONAL      STOCK       COMMON
                                                     COMMON      PAID-IN        HELD        STOCK        TREASURY
                                                      STOCK      CAPITAL       BY ESOP     UNDER MRP      STOCK
                                                      -----      -------       -------     ---------      -----
<S>                                                <C>         <C>          <C>          <C>          <C>
Balance at September 30, 2001                       $     36    $ 35,713     $ (1,287)    $    (37)    $(22,037)

   Net loss                                               --          --           --           --           --
   Dividends paid ($0.10 per share)                       --          --           --           --           --
   Amortization of MRP awards                             --          --           --            8           --
   Tax benefits from vested
     MRP awards                                           --         108           --           --           --
   Exercise of stock options (174,670 options)            --        (561)          --           --        1,418
   Common stock repurchased (28,773 shares)               --          --           --           --         (823)
   ESOP shares released for
      allocation (7,142 shares)                           --         122           72           --           --
   Change in net unrealized gain on
     available-for sale securities, net of taxes          --          --           --           --           --

                                                    --------    --------     --------     --------     --------
Balance at December 31, 2001                        $     36    $ 35,382     $ (1,215)    $    (29)    $(21,442)
                                                    ========    ========     ========     ========     ========
<CAPTION>


                                                                 ACCUMULATED
                                                                   OTHER            TOTAL
                                                     RETAINED   COMPREHENSIVE     STOCKHOLDERS'
                                                      INCOME       INCOME           EQUITY
                                                      ------       ------           ------
<S>                                                  <C>                           <C>
Balance at September 30, 2001                       $ 29,074     $  1,119           42,581

   Net loss                                             (319)          --             (319)
   Dividends paid ($0.10 per share)                     (212)          --             (212)
   Amortization of MRP awards                             --           --                8
   Tax benefits from vested
     MRP awards                                           --           --              108
   Exercise of stock options (174,670 options)            --           --              857
   Common stock repurchased (28,773 shares)               --           --             (823)
   ESOP shares released for
      allocation (7,142 shares)                           --           --              194
   Change in net unrealized gain on
     available-for sale securities, net of taxes          --         (711)            (711)
                                                    --------     --------         --------
Balance at December 31, 2001                        $ 28,543     $    408         $ 41,683
                                                    ========     ========         ========

</TABLE>


See accompanying notes to consolidated financial statements.


                                       4
<PAGE>



                  YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                               FOR THE THREE MONTHS
                                                                                                 ENDED DECEMBER 31,
                                                                                        -------------------------------
                                                                                            2001               2000
                                                                                            ----               ----
<S>                                                                                      <C>                 <C>
Cash flows from operating activities:
  Net (loss) income                                                                      $   (319)           $    860
  Adjustments to reconcile net income to net cash provided
     by operating activities:
     Provision for loan losses                                                                 83                  75
     ESOP and MRP expense                                                                     202                 181
     Depreciation and amortization expense                                                    110                 120
     Amortization of deferred fees, discounts and premiums, net                                22                 109
     Proceeds from sale of loans                                                           18,490               9,015
     Increase in cash surrender value of bank owned life insurance                           (144)                 --
     Net gain on sales of real estate mortgage loans held for sale                           (252)               (126)
     Net gain on sales of securities                                                          (17)                (85)
     Decrease (increase) in accrued interest receivable                                       339                (260)
     Increase in other assets                                                                (352)               (211)
     Decrease in accrued interest payable                                                    (118)               (313)
     Decrease in accrued taxes payable                                                     (1,285)               (195)
     Decrease in accrued expenses and other liabilities                                     1,498                (419)
                                                                                         --------            --------
          Net cash provided by operating activities                                        18,257               8,751
                                                                                         --------            --------
Cash flows from investing activities:
  Purchases of available-for-sale securities                                               (4,811)             (9,881)
  Proceeds from principal payments, maturities and calls of securities:
     Available-for-sale                                                                    14,801               2,134
     Held-to-maturity                                                                       1,230                 922
  Proceeds from sales of available-for-sale securities                                        591               1,401
  Disbursements for loan originations                                                     (49,032)            (21,800)
  Principal collections on loans                                                           22,616               9,754
  Other investing cash flows                                                                   (2)                (47)
                                                                                         --------            --------
          Net cash used in investing activities                                           (14,607)            (17,517)
                                                                                         --------            --------
Cash flows from financing activities:
  Net increase in deposits                                                                 13,299              14,705
  Net (decrease) increase in borrowings with
     original terms of three months or less:
       Securities repurchase agreements                                                        --              (5,500)
       FHLB advances                                                                           --              15,000
  Repayment of longer-term borrowings                                                         (89)            (10,080)
  Common stock repurchased                                                                   (823)                 --
  Exercise of stock options                                                                   857                  --
  Dividends paid                                                                             (212)               (188)
                                                                                         --------            --------
          Net cash provided by financing activities                                        13,032              13,937
                                                                                         --------            --------


Net  increase in cash and cash equivalents                                                 16,682               5,171
Cash and cash equivalents at beginning of the period                                       31,801              10,178
                                                                                         --------            --------

Cash and cash equivalents at end of the period                                           $ 48,483            $ 15,349
                                                                                         ========            ========

Supplemental information:
  Interest paid                                                                          $  5,593            $  6,498
  Income taxes paid                                                                           967                 690
                                                                                         ========            ========

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

     On March 31, 1999 the Association established a real estate investment
trust, Yonkers REIT, Inc. (the "REIT"), a wholly owned subsidiary. On such date,
$119.3 million in real estate loans was transferred from the Association to the
REIT. On December 31, 2001 $87.1 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.

     On November 13, 2001 Atlantic Bank of New York ("Atlantic') and the Company
signed a definitive agreement whereby Atlantic Bank will acquire the Company for
an aggregate purchase price of approximately $68.3 million or $29.00 per share
cash for each common share outstanding of YFCB. Upon completion of the
transaction, Yonkers Savings and Loan Association, FA, (the "Association") will
merge into Atlantic Bank of New York. The transaction is subject to shareholder
and regulatory approval and is expected to close in the first half of this year.

     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 three months ended December 31, 2001 are not necessarily
indicative of the results of operations which may be expected for the fiscal
year ending September 30, 2002.

     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, 2001, included in the
Form 10-K.

(2) COMPREHENSIVE INCOME


                                        6
<PAGE>


      Comprehensive income represents net income and certain amounts reported
directly in stockholders' equity, such as the net unrealized gain or loss on
securities available for sale. Total comprehensive loss for the quarter ended
December 31, 2001 was $1.0 million consisting of $319,000 in net loss plus a net
decrease of $711,000 in the after-tax net unrealized loss on available-for-sale
securities. For the quarter ended December 31, 2000, total comprehensive income
of $2.8 million consisted of net income of $860,000 less a net decrease of $1.9
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 Statement of Financial Accounting Standards (SFAS) No. 128,
"Earnings per Share". Basic EPS excludes dilution and is computed by dividing
income available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common stock (such as
stock options) were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the entity. Diluted
EPS is computed by dividing net income by the weighted average number of common
shares outstanding for the period plus common-equivalent shares computed using
the treasury stock method. Unallocated ESOP shares that have not been committed
to be released to participants are excluded from outstanding shares in computing
both basic and diluted EPS.

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


<TABLE>
<CAPTION>
                                                                  FOR THE THREE MONTHS
                                                                   ENDED DECEMBER 31,
                                                                  --------------------
                                                                   2001         2000
                                                                   ----         ----
                                                                    (In thousands)
<S>                                                               <C>         <C>
    Weighted average common shares outstanding
       for computation of basic EPS (1)                            2,107       2,047
    Common-equivalent shares due to the dilutive effect of
       stock options and MRP awards (2)                               49          33(3)
                                                                 -------     -------
    Weighted average common shares for
       computation of diluted EPS                                  2,156       2,081
                                                                 =======     =======
</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.
(3)      Options to purchase 20,000 shares of common stock at prices
         between $16.63 per share and $21.63 per share were outstanding at
         December 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 December 31,
         2000.


                                        7
<PAGE>


PART I. ITEM 2.

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

FORWARD-LOOKING STATEMENTS

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

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

COMPARISON OF FINANCIAL CONDITION AT DECEMBER 31, 2001 AND SEPTEMBER 30, 2001

     Total assets at December 31, 2001 amounted to $579.0 million, representing
an increase of $7.9 million from $571.1 at September 30, 2001. Asset growth
during the period was funded primarily through growth in the Company's deposit
base relating to the expansion of its retail franchise.

     Overall, total securities decreased $17.3 million to $107.1 million at
December 31, 2001 from $124.4 million at September 30, 2001. Total cash and cash
equivalents increased $16.7 million to $48.5 million at December 31, 2001 from
$38.1 million at September 30, 2001. Net loans receivable, including those held
for sale, increased $8.1 million to $400.9 million at December 31, 2001 from
$392.8 million at September 30, 2000. The loan growth during the quarter
represents loan originations of $49.0 million, offset by principal collections
of $22.6 million and loans sold of $18.2 million. The merger agreement with
Atlantic imposes limits on the Company's non-one to four family residential
lending which may result in a reduction in originations prior to the completion
of the merger.

     Total deposit liabilities increased $13.3 million to $402.8 million at
December 31, 2001 from $389.5 million at September 30, 2001. Total borrowings
decreased by $89,000 to


                                        8
<PAGE>


$129.5 million at December 31, 2001 from $129.6 million at September 30, 2001.
Funds from deposit growth were primarily invested in new loans.

     Stockholders' equity decreased $898,000 to $41.7 million at December 31,
2001 from $42.6 million at September 30, 2001. The decrease is primarily
attributable to a $711,000 decrease in the after-tax net unrealized gain on
available-for-sale securities and a $531,000 decrease in net income retained
after dividends partially offset by a $595,000 decrease in treasury stock. The
ratio of stockholders' equity to total assets decreased to 7.2% from 7.5% at
September 30, 2001. Book value per share based on outstanding shares but
excluding options, decreased to $17.94 at December 31, 2001 from $19.11 at
September 30, 2001. During the three months ended December 31, 2001 management
exercised stock options resulting in a net decrease in the Company's treasury
stock of 95,242 shares. At December 31, 2001, there remained outstanding under
the Company's 1996 Stock Option and Incentive Plan, options to purchases 144,094
shares of which 107,118 were vested and 36,976 were unvested. See "Liquidity and
Capital Resources" for information regarding the Association's regulatory
capital amounts and ratios.

ANALYSIS OF NET INTEREST INCOME

    The following table sets forth the Company's average balance sheets, average
yields and costs (on an annualized basis), and certain other information for the
three months ended December 31, 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.


                                        9
<PAGE>


<TABLE>
<CAPTION>

                                                                                  FOR THE QUARTER ENDED DECEMBER 31,
                                                        ----------------------------------------------------------------------------
                                                                        2001                                  2000
                                                        -------------------------------------   ------------------------------------
                                                        AVERAGE                     AVERAGE     AVERAGE                    AVERAGE
                                                        BALANCE       INTEREST     YIELD/COST   BALANCE     INTEREST      YIELD/COST
                                                        -------       --------     ----------   -------     --------      ----------
                                                                                      (Dollars in thousands)
<S>                                                    <C>            <C>             <C>      <C>          <C>               <C>
ASSETS
Interest-earning assets:
    Loans (1)                                          $ 396,088      $   7,318         7.39%  $ 369,013    $   6,857         7.43%
    Mortgage-backed securities (2)                        81,503          1,117         5.48      84,866        1,447         6.82
    Other securities (2)                                  34,415            556         6.46      42,410          886         8.36
    Other earning assets                                  43,113            214         1.99      22,621          350         6.19
                                                       ---------      ---------                ---------    ---------
       Total interest-earning assets                     555,119      $   9,205         6.63     518,910    $   9,540         7.35
                                                                      =========                             =========

Allowance for loan losses                                 (2,031)                                 (1,727)
Non-interest earning assets                               19,087                                   9,591
                                                       ---------                               ---------
       Total assets                                    $ 572,175                               $ 526,774
                                                       =========                               =========
LIABILITIES AND  STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
    NOW, club and money market accounts                $  64,051      $     222         1.39%  $  65,587    $     351         2.14%
    Regular savings accounts (3)                          92,582            432         1.87      57,632          304         2.11
    Savings certificate accounts                         223,627          2,773         4.96     197,118        2,922         5.93
                                                       ---------      ---------                ---------    ---------
       Total interest-bearing deposits                   380,260          3,427         3.60     320,337        3,577         4.47

    Borrowings                                           129,514          2,048         6.33     160,600        2,609         6.50
                                                       ---------      ---------                ---------    ---------
       Total interest-bearing liabilities                509,774      $   5,475         4.30     480,937    $   6,186         5.14
                                                                      =========                             =========

Non-interest-bearing liabilities                          20,488                                  10,901
                                                       ---------                               ---------
       Total liabilities                                 530,262                                 491,838

Stockholders' equity                                      41,913                                  34,936
                                                       ---------                               ---------
       Total liabilities and stockholders' equity      $ 572,175                               $ 526,774
                                                       =========                               =========
Net interest income                                                   $   3,730                             $   3,354
                                                                       =========                            =========
Average interest rate spread (4)                                                       2.34%                                  2.21%
Net interest margin (5)                                                                2.69%                                  2.59%
Net interest-earning assets (6)                        $  45,345                               $  37,973
                                                       =========                               =========
Ratio of average interest-earning assets to average
    interest-bearing liabilities                                                     108.90                                 107.90

</TABLE>

(1)  Balances are net of deferred loan fees and construction loans in process,
     and include loans receivable and loans held for sale. Non-accrual loans are
     included in the balances.
(2)  Average balances represent amortized cost.
(3)  Includes mortgage escrow accounts.
(4)  Average interest rate spread represents the difference between the yield on
     average interest-earning assets and the cost of average interest-bearing
     liabilities.
(5)  Net interest margin represents net interest income divided by average total
     interest-earning assets.
(6)  Net interest-earning assets represents total interest-earning assets less
     total interest-bearing liabilities.



                                       10
<PAGE>


     The following table presents the extent to which changes in interest rates
and changes in the volume of interest-earning assets and interest-bearing
liabilities affected the Company's interest income and interest expense during
the three months ended December 31, 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.

<TABLE>
<CAPTION>
                                                           For the Quarter Ended December 31,
                                                                 2001 Compared to 2000
                                                          -------------------------------------
                                                           Increase (Decrease)
                                                                  Due to
                                                          ----------------------           Net
                                                          Volume           Rate          Change
                                                          ------           ----          ------
                                                                      (In Thousands)
<S>                                                        <C>            <C>            <C>
Interest-earning assets:
  Loans                                                    $ 498          $ (37)         $ 461
  Mortgage-backed securities                                 (55)          (275)          (330)
  Other securities                                          (150)          (180)          (330)
  Other earning assets                                       194           (330)          (136)
                                                           -----          -----          -----
           Total                                             487           (822)          (335)
                                                           -----          -----          -----
Interest-bearing liabilities:
  NOW, club and money market accounts                         (8)          (121)          (129)
  Regular savings accounts                                   166            (38)           128
  Savings certificate accounts                               364           (513)          (149)
  Borrowings                                                (494)           (67)          (561)
                                                           -----          -----          -----
           Total                                              28           (739)          (711)
                                                           -----          -----          -----

Net change in net interest income                          $ 459          $ (83)         $ 376
                                                           =====          =====          =====

</TABLE>

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2001 AND
2000

     GENERAL. Net loss for the three months ended December 31, 2001 was
($319,000) or diluted EPS of ($0.15) compared to net income of $860,000 or
diluted EPS of $0.41 for the quarter ended December 31, 2000. Basic EPS were
($0.15) for the quarter ended December 31, 2001 compared to $0.42 for the same
period in 2000. The decrease in net income of $1.2 million reflects an increase
of $2.6 million in non-interest expense, primarily merger related expenses,
partially offset by a $741,000 decrease in income tax expense, a $368,000
increase in net interest income after provision for loan losses, and a $325,000
increase in non-interest income.

NET INTEREST INCOME. Net interest income for the three months ended December 31,
2001 was $3.7 million, an increase of $376,000 from $3.4 million for the same
period in 2000. The increase reflects the positive effect on net interest income
of higher average interest-earning assets, primarily attributable to the
investment of proceeds from deposit growth coupled with the increase in the
average interest rate spread. The average interest rate spread for the three
months ended December 31, 2001 was 2.34%, an increase from 2.21% for the 2000
quarter. The net interest margin for the three months ended December 31, 2001
was 2.69%, compared to 2.59% for the three months ended December 31, 2000. The
increase in the average interest rate spread as well as the net interest margin
for the 2001


                                       11
<PAGE>


quarter resulted primarily from a decline in interest rates which caused an 84
basis point decrease in the cost of funds, while the average rate earned on
assets only decreased 72 basis points.

     INTEREST AND DIVIDEND INCOME. Interest and dividend income totaled $9.2
million for the three months ended December 31, 2001, a decrease of $335,000
compared to $9.5 million for the three months ended December 31, 2000. This
decrease reflects the effect of a 72 basis point decrease in the average yield
on such assets to 6.63% for the three months ended December 31, 2001 from 7.35%
for the same period in the prior year, partially offset by a $36.2 million
increase in total average interest-earning assets.

     Interest income on loans increased $461,000 for the three months ended
December 31, 2001 compared to the same period in the prior year, reflecting the
effect of a $27.1 million increase in the average balance, partially offset by a
4 basis point decrease in the average yield as the Company increased its
holdings of non-residential loans during 2001. Non-residential loan growth may
decline prior to the completion of the merger due to the merger activities with
Atlantic.

     On a combined basis, interest and dividend income on mortgage-backed and
other securities decreased $660,000 to $1.7 million for the three months ended
December 31, 2001 from $2.3 million for the three months ended December 31,
2000. Interest on mortgage-backed securities decreased by $330,000 attributable
to a 134 basis point decrease in the average yield and a $3.4 million decrease
in the average balance. The decrease in the average balance of mortgage-backed
securities was primarily attributable to principal repayments and sales of
available for sale securities during the three months ended December 31, 2001.
The lower average yield on mortgage-backed securities during the 2001quarter
reflects the addition of lower-yielding adjustable rate products and the impact
of higher premium amortization caused by increased repayments of principal.
Interest on other securities decreased by $330,000, primarily attributable to a
$8.0 million decrease in the average balance and a 190 basis point decrease in
the average yield to 6.46% for the quarter ended December 31, 2001 from 8.36%
for the same period in the prior year.

     Interest and dividend income on other earning assets decreased $136,000,
primarily attributable to a $20.5 million decrease in the average balance and a
420 basis point decrease in the average yield. The decrease in the average yield
primarily reflects the current lower interest rate environment attributable to
decreases in short-term interest rates by the Federal Reserve Bank.

     INTEREST EXPENSE. Interest expense totaled $5.5 million for the three
months ended December 31, 2001, a decrease of $711,000 from the prior year's
quarter.

     Interest expense on deposits decreased $150,000 compared to the same period
in the prior year, reflecting the effect of an 87 basis point decrease in the
average rate on interest-bearing deposits to 3.60% for the three months ended
December 31, 2001 from 4.47% for the three months ended December 31, 2000,
partially offset by a $60.0 million increase in the average balance. The
decrease in the average rate paid on deposits primarily reflects a 97 basis
point decrease in the average rate paid on savings certificate accounts, coupled
with a 75 basis point decrease in the average rate paid on NOW, club, and money
market accounts and a 24 basis point decrease in the average rate paid on
regular savings accounts. The increase in average interest-bearing deposits
consisted of a $35.0 million increase in average regular savings accounts (to
$92.6 million from $57.6 million), a $26.5 million increase in average savings
certificate accounts (to $223.6 million from $197.1 million), slightly offset by
a $1.5 million


                                       12
<PAGE>


decrease in average NOW, club and money market accounts (to $64.1 million from
$65.6 million).

     Interest expense on borrowings decreased $561,000 to $2.0 million for the
three months ended December 31, 2001 from $2.6 million for the three months
ended December 31, 2000. Total borrowings averaged $129.5 million for the three
months ended December 31, 2001 at an average rate of 6.33% compared to $160.6
million and 6.50%, 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 $83,000 and $75,000 for the three months
ended December 31, 2001 and 2000, respectively. See "Asset Quality" for a
further discussion of the Company's non-performing assets and allowance for loan
losses.

     NON-INTEREST INCOME. Non-interest income for the three months ended
December 31, 2001 increased $325,000 to $924,000, from $599,000 for the
comparable period in 2000. The increase is primarily attributable to a $164,000
increase in other income primarily reflecting income from the Company's
investment in bank owned life insurance purchased in 2001, a $126,000 increase
in the net gain on sales of real estate mortgages held for sale, a $103,000
increase in service charges and fee income, partially offset by a $68,000
decrease in the net gain on sale of securities. The increase in net gain on sale
of real estate mortgages held for sale reflects loans sold of $18.2 million for
the three months ended December 31, 2001 as compared to sales of $8.9 million
for the period ended December 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 loans. The increase in service
charges and fee income resulted from increases in transaction volume. The
decrease in net gain on sale of securities reflects sales of $574,000 for the
three months ended December 31, 2001, as compared to sales of $1.3 million for
the period ended December 31, 2000.

     NON-INTEREST EXPENSE. Non-interest expense for the three months ended
December 31, 2001 increased $2.6 million to $5.1 million compared to $2.5
million for the three months ended December 31, 2000. This increase primarily
reflects $2.1 million in expenses incurred in the 2001 quarter relating to the
announced merger with Atlantic Bank. Merger related expenses included increased
funding of the Supplemental Executive Retirement Plan (SERP) of $1.6 million,
$311,000 in investment banker fees, and $264,000 in legal fees. The increased
funding of the SERP was required due to an increase in the chief executive
officer's average income resulting from the exercise of his stock options in
December 2001 after the Company's stock price had climbed following the
announcement of the merger with Atlantic in the previous month. Compensation and
benefits expense amounted to $1.8 million for the three months ended December
31, 2001, representing an increase of $325,000 from the prior year quarter. The
increase in compensation and benefits expense primarily reflects merit and
performance-based increases for management


                                       13
<PAGE>


and staff members as well as an $85,000 increase in ESOP related expenses
resulting primarily from the appreciation in the Company's stock price. Other
non-interest expense amounted to $601,000 for the three months ended December
31, 2001, representing an increase of $128,000 from the 2000 quarter. This
increase in other non-interest expense primarily reflects temporary help fees
and the costs attributable to expansion of the Company's business activities
when compared to the prior year period.

     INCOME TAX EXPENSE. Income tax (benefit) expense was ($245,000) for the
three months ended December 31, 2001 and $496,000 for the comparable 2000
period, reflecting effective tax rates of 43.4% and 36.6 %, respectively. The
increase in the effective tax rate is primarily due to an increase in
non-taxable income related to bank owned life insurance and municipal bonds.

ASSET QUALITY

     Non-performing loans totaled $372,000 at December 31, 2001, compared to
$552,000 at September 30, 2001 and $275,000 at December 31, 2000. The ratio of
non-performing loans to total loans receivable was 0.09% at December 31, 2001,
compared to 0.14% at September 30, 2001 and 0.07% at December 31, 2000. The
allowance for loan losses was $2.1 million or 0.51% of total loans receivable at
December 31, 2001, compared to $2.0 million or 0.51% of total loans receivable
at September 30, 2001 and $1.8 million or 0.48% at December 31, 2000. The ratio
of the allowance for loan losses to non-performing loans was 556.18% at December
31, 2001, compared to 362.68% at September 30, 2001 and 643.27% at December 31,
2000.

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


<TABLE>
<CAPTION>
                                                                  DECEMBER 31,      SEPTEMBER 30,     DECEMBER 31,
                                                                      2001              2001              2000
                                                                      ----              ----              ----
                                                                                (DOLLARS IN THOUSANDS)
<S>                                                               <C>               <C>                <C>
    Non-accrual loans past due ninety days or more:
      Real estate mortgage loans:
           One- to four-family                                     $     306         $     540         $     271
           Commercial                                                     --                --                --
           Land                                                           --                --                --
           Construction                                                   --                --                --
      Consumer loans                                                      66                12                 4
                                                                   ---------         ---------         ---------
    Total non-performing assets                                    $     372         $     552         $     275
                                                                   =========         =========         =========
     Allowance for loan losses                                     $   2,069         $   2,002         $   1,769
                                                                   =========         =========         =========

    Ratios:
      Non-performing loans to total loans receivable                    0.09%             0.14%             0.07%
      Non-performing assets to total assets                             0.06              0.10              0.05
      Allowance for loan losses to:
          Non-performing loans                                        556.18            362.68            643.27
          Total loans receivable                                        0.51              0.51              0.48

</TABLE>


                                       14
<PAGE>



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 primary investing activities of the Company are the origination of real
estate mortgage and other loans, and the purchase of mortgage-backed and other
securities. At December 31, 2001, the Company had outstanding loan origination
commitments of $33.2 million, unadvanced home equity lines of credit of $2.6
million and undisbursed construction loans in process of $7.4 million. The
Company anticipates that it will have sufficient funds available to meet its
current loan origination and other commitments. At December 31, 2001, the
Company had the ability based on available collateral to obtain additional FHLB
advances of approximately $81.4 million. Certificates of deposit scheduled to
mature in one year or less from December 31, 2001 totaled $139.6 million. Based
on the Company's most recent experience and pricing strategy, management
believes that a significant portion of such deposits will remain with the
Company.

     The Company's borrowings at December 31, 2001 consisted of $66.5 million in
borrowings under securities repurchase agreements and FHLB advances of $63.0
million. In the case of its securities repurchase agreements, the Company
borrows funds through the transfer of debt securities to the FHLB of New York,
as counterparty, and concurrently agrees to repurchase the identical securities
at a fixed price on a specified date. The Company accounts for these agreements
as secured financing transactions since it maintains effective control over the
transferred securities. Accordingly, the transaction proceeds are recorded as
borrowings and the underlying securities continue to be carried in the Company's
debt securities portfolio. Repurchase agreements are collateralized by the
securities sold and, in certain cases, by additional margin securities. During
the three months ended December 31, 2001, the average borrowings under these
agreements amounted to $66.5 million and the maximum month-end balance
outstanding was $66.5 million.

     Additional information concerning outstanding repurchase agreements with
the FHLB of New York as of December 31, 2001 is summarized as follows:


                                       15
<PAGE>


<TABLE>
<CAPTION>
                                                       Accrued Interest     Weighted             Fair Value of
Remaining Term to Final Maturity (1)        Amount        Payable (2)     Average Rate     Collateral Securities (3)
------------------------------------        ------        -----------     ------------     -------------------------
                                                                (Dollars in thousands)
<S>                                      <C>                 <C>            <C>                   <C>
Within 30 days                           $      --          $   --             0.00%             $      --
After 30 days but within one year            1,000              10              6.8                  2,041
After one but within three years            10,000              23             5.91                  9,519
After three but within five years           10,100              29             6.18                  9,042
After five years                            45,412             424             5.69                 44,173
                                         ---------          ------                               ---------
     Total                               $  66,512          $  486             5.81%             $  64,775
                                         =========          ======                               =========
</TABLE>

(1) The weighted average remaining term to final maturity was approximately 6.1
    years at December 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 1.7 years at December 31, 2001.
(2) Included in other liabilities in the consolidated balance sheet.
(3) Represents the fair value of the mortgage-backed securities ($60.5 million)
    and other debt securities ($4.3 million) which were transferred to the
    counterparty, including accrued interest receivable of $401,000. These
    securities consist of available-for-sale securities and held-to-maturity
    securities with fair values of $58.3 million and $6.5 million, respectively.

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

<TABLE>
<CAPTION>
                                                                  2001                         2000
                                                        --------------------------   -------------------------
                                                             AMOUNT        RATE           AMOUNT       RATE
                                                        --------------------------   -------------------------
                                                        (Dollars in thousands)
<S>                                                       <C>             <C>           <C>           <C>
     FHLB advances maturing:
     Within 30 days                                        $     --         --%          $  8,000      6.69%
     30 days to 1 year                                           --         --             10,000      6.78
     1 year to 3 years                                       10,000       6.22             10,000      6.54
     3 years to 5 years                                      33,852       6.85             30,200      7.14
     Over 5 years                                            19,120       6.63             19,120      6.81
                                                           --------                      --------
              Total                                        $ 62,972       6.68%          $ 77,320      6.89%
                                                           ========                      ========
</TABLE>

     The weighted average period to maturity date for the FHLB advances
outstanding at December 31, 2001 was 3.9 years, with a weighted average period
to call date of 3.7 years. During the three months ended December 31, 2001, the
Company's average FHLB advances outstanding were $63.0 million, and the maximum
month end balance outstanding was $63.1 million.

     At December 31, 2001, the Association exceeded all of its regulatory
capital requirements with a tangible capital level of 6.7% of total adjusted
assets, which is above the required level of 1.5%; core capital of 6.7% of total
adjusted assets, which is above the required level of 4.0%; and total risk-based
capital of 13.8%, which is above the required level of 8.0%. These regulatory
capital requirements, which are applicable to the Association only, do not
consider


                                       16
<PAGE>


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, 2001.

During the quarter ended December 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

      None

ITEM 5.  OTHER INFORMATION

      None


                                       17
<PAGE>


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


      (b)  Reports on Form 8-K

     During the quarter ended December 31, 2001, the Company filed three reports
on Form 8-K. On November 7, 2001, the Company filed a form 8-K containing a
press release announcing the Company's earnings for the quarter and fiscal year
ended September 30, 2001. On November 16, 2001 the Company filed a form 8-K
containing a press release announcing the definitive merger agreement with
Atlantic Bank of New York. On November 29, 2001 the Company filed a form 8-K
containing a press release announcing that the Company entered into a limited
waiver agreement with Gould Investors LP.


                                       18
<PAGE>


SIGNATURES

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


                                       YONKERS FINANCIAL CORPORATION
                                       -----------------------------
                                       (Registrant)


Date:  February 14, 2002               /s/  RICHARD F. KOMOSINSKI
                                       --------------------------
                                       Richard F. Komosinski,
                                       President and Chief Executive Officer
                                       (Principal Executive Officer)


Date:  February 14, 2002               /s/ JOSEPH D. ROBERTO
                                       ----------------------
                                       Joseph D. Roberto
                                       Senior Vice President, Treasurer and
                                       Chief Financial Officer
                                       (Principal Financial Officer)


                                       19