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 March 31, 2000

                                       OR

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

         For the transition period from  ____________  to  _______________

                         Commission File Number 0-27716

                          YONKERS FINANCIAL CORPORATION
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


               Delaware                               13-3870836
--------------------------------------------------------------------------------
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

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

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

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

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

Classes of Common Stock             Number of Shares Outstanding, March 31, 2000
-----------------------            ---------------------------------------------
   $0.01 Par Value                                    2,228,739


<PAGE>


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



                                                                         Page
                                                                         Number

                          PART I. FINANCIAL INFORMATION

Item 1.             Financial Statements (Unaudited)
                    Consolidated Balance Sheets at March 31, 2000 and
                      September 30, 1999 ......................................2
                    Consolidated Statements of Income for the Three and Six
                      Months ended March 31, 2000 and 1999.....................3
                    Consolidated Statement of Changes in Stockholders' Equity
                      for the Six Months Ended March  31, 2000.................4
                    Consolidated Statements of Cash Flows for the Six Months
                      Ended March  31, 2000 and 1999...........................5
                    Notes to Consolidated Financial Statements.................6
Item 2.             Management's Discussion and Analysis of
                      Financial Condition and Results of Operations ...........8
Item 3.             Quantitative and Qualitative Disclosures About
                      Market Risk ............................................21



                           PART II. OTHER INFORMATION

Item 1.             Legal Proceedings ........................................21
Item 2.             Changes in Securities ....................................21
Item 3.             Defaults Upon Senior Securities ..........................21
Item 4.             Submission of Matters to a Vote of Security Holders ......22
Item 5.             Other Information ........................................22
Item 6.             Exhibits and Reports on Form 8-K .........................22
                    Signature Page ...........................................24




<PAGE>
Part I - Item 1
<TABLE>


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

                                                                                March 31,          September 30,
                                                                                  2000                 1999
<S>                                                                             <C>                 <C>
ASSETS
Cash and cash equivalents:                                                        8,511                 4,651
                                                                              ---------              ---------
Securities:
 Available-for-sale, at fair value (amortized cost of $120,996 in 2000
  and $123,317 in 1999)                                                         111,180               116,712
 Held-to-maturity, at amortized cost (fair value of $21,959 in 2000
  and $43,948 in 1999)                                                           18,890                21,936
                                                                              ----------            ---------
          Total securities                                                      130,070               138,648
                                                                              ---------             ---------
Real estate mortgage loans held for sale, at lower of cost or market value        1,451                 1,226
                                                                              ---------             ---------
Loans receivable, net:
     Real estate mortgage loans                                                 351,550               291,199
     Consumer and commercial business loans                                       8,895                 8,254
     Allowance for loan losses                                                   (1,566)               (1,503)
                                                                              ---------
          Total loans receivable, net                                           358,879               297,950
                                                                              ---------             ---------
Federal Home Loan Bank  ("FHLB") stock                                            9,298                 7,397
Accrued interest receivable                                                       2,944                 2,750
Office properties and equipment, net                                              2,072                 1,984
Other assets                                                                      4,111                 3,089
                                                                              ---------             ---------
          Total assets                                                        $ 517,336             $ 457,695
                                                                              =========             =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
     Deposits                                                                 $ 304,081             $ 272,974
     Securities repurchase agreements                                            98,193                99,987
     FHLB advances                                                               78,500                47,948
     Other liabilities                                                            4,452                 4,769
                                                                              ---------             ---------
          Total liabilities                                                     485,226               425,678
                                                                              ---------             ---------

Commitments and contingencies

Stockholders' equity:
     Preferred stock (par value $0.01 per share; 100,000
        shares authorized; none issued or outstanding)                               --                    --
     Common stock (par value $0.01 per share: 4,500,000
        shares authorized; 3,570,750 shares issued)                                  36                    36
     Additional paid-in capital                                                  35,366                35,225
     Unallocated common stock  held by employee stock
        ownership plan ("ESOP")                                                  (1,714)               (1,857)
     Unamortized awards of common stock under  management
        recognition plan ("MRP")                                                   (475)                 (621)
     Treasury stock, at cost (1,332,011 shares in 2000 and
        844,511 shares in 1999)                                                 (22,037)              (21,866)
     Retained income, substantially restricted                                   24,771                23,652
     Accumulated other comprehensive loss  (note 2)                              (3,837)               (2,552)
                                                                              ---------             ---------
          Total stockholders' equity                                             32,110                32,017
                                                                              ---------             ---------
          Total liabilities and stockholders' equity                          $ 517,336             $ 457,695
                                                                              =========             =========

See accompanying notes to consolidated financial statements.

</TABLE>

                                      -2-

<PAGE>

<TABLE>

                                     YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
                                          CONSOLIDATED STATEMENTS OF INCOME

                                                     (Unaudited)

                                        (In thousands, except per share data)

                                                        For the Three Months         For the Six Months
                                                      -----------------------      ---------------------
                                                          Ended March 31,              Ended March 31,
                                                      -----------------------      ---------------------
                                                      2000               1999      2000             1999
                                                      ----               ----      ----             ----

  <S>                                                <C>                <C>        <C>             <C>
 Interest and dividend income:
   Loans                                              $ 6,463           $ 3,785    $12,505         $ 7,544
   Securities                                           2,327             2,503      4,714           5,182
   Other earning assets                                   181               184        340             367
                                                     --------           -------   --------        --------
     Total interest and dividend income                 8,971             6,472     17,559          13,093
                                                     --------           -------   --------        --------
 Interest expense:
   Deposits                                             2,803             2,340      5,478           4,721
   Securities repurchase agreements                     1,565             1,068      3,179           2,315
   FHLB advances                                        1,081               171      1,928             307
     Total interest expense                             5,449             3,579     10,585           7,343
                                                    ---------           -------   --------        --------
       Net interest income                              3,522             2,893      6,974           5,750
                                                    ---------           -------   --------        --------


 Provision for loan losses                                 35                75         70             150
                                                    ---------           -------   --------        --------

  Net interest income after provision for loan          3,487             2,818      6,904           5,600
   losses                                           ---------           -------   --------        --------

Non-interest income:
   Service charges and fees                               346               182        615             323
   Net gain on sales of real estate mortgage
      loans held for sale                                  24               109         47             246
   Net gain (loss) on sales of securities                  (3)               70          1              73
   Other                                                   51                82         65              91
                                                    ---------           -------   --------        --------
      Total non-interest income                           418               443        728             733
                                                    ---------           -------   --------        --------
Non-interest expense:
   Compensation and benefits                            1,396             1,115      2,863           2,271
   Occupancy and equipment                                356               323        694             551
   Data processing service fees                           209               169        388             319
   Federal deposit insurance costs                         14                35         52              68

   Other                                                  671               558      1,252             933

      Total non-interest expense                        2,646             2,200      5,249           4,142
                                                    ---------           -------   --------        --------
        Income before income tax expense                1,259             1,061      2,383           2,191

Income tax  expense                                       465               394        885             857
                                                    ---------           -------   --------        --------
       Net income                                      $  794           $   667    $ 1,498         $ 1,334
                                                    ---------           -------   --------        --------
                                                    ---------           -------   --------        --------
Earnings per common share (note 3):

       Basic                                           $ 0.40           $  0.27    $   0.75        $  0.54
       Diluted                                           0.39              0.27        0.73           0.54
                                                     ---------           -------   --------        --------
                                                     ---------           -------   --------        --------
</TABLE>

See accompanying notes to consolidated financial statements.
                                      -3-


<PAGE>

                  YONKERS FINANCIAL CORPORATION AND SUBSIDIARY
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                                   (Unaudited)

                  (Dollars in thousands, except per share data)

<TABLE>


                                                               Unallocated  Unamortized
                                                               Common       Awards of                     Accumulated
                                                    Additional Stock        Common                        Other            Total
                                           Common   Paid-in    Held         Stock      Treasury  Retained Comprehensive Stockholders
                                           Stock    Capital    by ESOP      Under MRP  Stock     Income   Loss             Equity

<S>                                       <C>        <C>        <C>         <C>        <C>       <C>      <C>              <C>
Balance at September 30, 1999              $ 36      $35,225    $(1,857)    $  (621)   $(21,866) $23,652  $(2,552)          $32,017
Net income                                   --          --         --           --          --    1,498       --             1,498
Dividends paid ($0.18 per share)             --          --         --           --          --     (379)      --              (379)
Common stock repurchased (10,000 shares)                                                   (171)                               (171)
Amortization of MRP awards                   --          --         --          146          --       --       --               146
Tax benefits from vested
 MRP awards                                  --           43        --           --          --       --       --                43
ESOP shares released for
 allocation (14,284 shares)                  --           98        143          --          --       --       --               241
Increase in net unrealized loss on
 available-for-sale securities, net of tax   --          --         --           --          --       --   (1,285)           (1,285)

Balance at March 31, 2000                  $ 36      $35,366    $(1,714)    $  (475)   $(22,037) $24,771 $(3,837)            $32,110


</TABLE>

See accompanying notes to consolidated financial statements

                                      -4-
<PAGE>

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

                                                                                For the Six Months
                                                                                  Ended March 31,

                                                                                2000           1999
                                                                                -----          ----
<S>                                                                        <C>               <C>
Cash flows from operating activities:
  Net income                                                                 $  1,498          $1,334
  Adjustments to reconcile net income to net cash provided
   by operating activities:
   Provision for loan losses                                                       70             150
   ESOP and MRP expense                                                           387             348
   Depreciation and amortization expense                                          236             168
   Amortization of deferred fees, discounts and premiums, net                     106             159
   Net gain on sales of real estate mortgage loans held for sale                  (47)           (246)
   Net (gain) loss on sales of securities                                          (1)            (73)
   Other adjustments, net                                                        (632)            689
                                                                             --------          ------
     Net cash provided by operating activities                                  1,617           2,529
                                                                             --------          ------
Cash flows from investing activities:
  Purchases of available-for-sale securities                                     (178)        (37,098)
  Proceeds from principal payments, maturities and calls of securities:
   Available-for-sale                                                           3,458          26,369
   Held-to-maturity                                                             3,053          16,025
  Proceeds from sales of securities:
   Available-for-sale                                                              98          17,296
   Held-to-maturity
  Disbursements for loan originations                                         (79,899)        (69,599)
  Principal collections on loans                                               13,031          20,834
  Proceeds from sales of loans                                                  5,590          29,307
  Purchases of FHLB stock                                                      (1,901)            --
  Other investing cash flows                                                     (324)           (514)
                                                                             --------          ------
     Net cash  (used in) provided by investing activities                     (57,072)          2,620
                                                                             --------          ------
Cash flows from financing activities:
  Net increase in deposits                                                     31,107          22,044
  Net (decrease) increase in borrowings with
    original terms of three months or less:
     Securities repurchase agreements                                         (15,768)        (32,178)
     FHLB advances                                                            (19,575)         15,000
Proceeds (Repayments of)  from longer-term borrowings                          64,101          (4,600)
  Common stock repurchased                                                       (171)             --
  Dividends paid                                                                 (379)           (402)
                                                                             --------          ------
      Net cash  provided (used in) by financing activities                     59,315            (136)
                                                                             --------          ------
Net increase in cash and cash equivalents                                       3,860           5,013
Cash and cash equivalents at beginning of period                                4,651           4,195
  b                                                                          --------          ------

Cash and cash equivalents at end of period                                   $  8,511        $  9,208
                                                                             --------          ------
                                                                             --------          ------
Supplemental information:
  Interest paid                                                              $ 10,057        $  7,202
  Income taxes paid                                                               --              361
                                                                             --------          ------
                                                                             --------          ------
</TABLE>

See accompanying notes to consolidated financial statements.

                                      -5-

<PAGE>


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

(1)  Basis of Presentation
     ---------------------

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

     On March 31, 1999 the  Association  established  a real  estate  investment
trust, Yonkers REIT, Inc. (the "REIT"), a wholly owned subsidiary. On such date,
$119.3 million in real estate loans was transferred  from the Association to the
REIT.  On March 31, 2000,  $114.7  million in real estate loans were held by the
REIT. The assets transferred to the REIT are viewed by regulators as part of the
Association's assets in consolidation.

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

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

(2) Comprehensive Income
    --------------------

     During the quarter ended December 31, 1998, the Company  adopted  Statement
of Financial  Accounting  Standards ("SFAS") No. 130,  "Reporting  Comprehensive
Income," which establishes  standards for reporting and display of comprehensive
income (and its  components)  in financial  statements.  The standard  does not,
however,  specify  when  to  recognize  or how to  measure  items  that  make up

                                      -6-

<PAGE>

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,  2000 was  $213,000
consisting  of $1.5 million in net income less a net increase of $1.3 million in
the after-tax net unrealized loss on available-for-sale  securities. For the six
months ended March 31, 1999, total  comprehensive  loss of $10,000  consisted of
net income of $1,334,000  less a net decrease of $1,344,000 in the after-tax net
unrealized gain on available-for-sale securities.

(3) Earnings Per Share
    ------------------

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

     The  following  is a  summary  of the  number  of  shares  utilized  in the
Company's EPS calculations for the three and six months ended March 31, 2000 and
1999. For purposes of computing basic EPS, net income applicable to common stock
equaled net income for both periods presented.


<TABLE>



                                                                For the Three Months           For the Six Months
                                                                  Ended March 31,                Ended March 31,
                                                                2000            1999           2000          1999
                                                                ----            ----           ----          ----
                                                                                    (In Thousands)
<S>                                                            <C>             <C>            <C>            <C>
Weighted average common shares outstanding
   for computation of basic EPS (1)                             2,008           2,456          2,007          2452
  Common-equivalent shares due to the dilutive effect of
   stock options and MRP awards (2)                                43              32             55            24
Weighted average common shares for
   computation of diluted EPS                                   2,051           2,488          2,062          2476

</TABLE>



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

                                      -7-

<PAGE>


Part I. Item 2.

Management's Discussion and Analysis of Financial Condition and Results of
Operations

Forward-Looking Statements

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

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

Comparison of Financial Condition at March 31, 2000 and September 30, 1999

     Total assets at March 31, 2000 amounted to $517.3 million,  representing an
increase of $59.6 million from $457.7 at September 30, 1999. Asset growth during
the period  related  primarily to increased  loan volume  funded by deposits and
borrowings reflecting the continued growth of the Company's retail franchise.

     Overall,  total loans (loans  receivable  and mortgage loans held for sale)
increased  $61.1 million to $360.3 million at March 31, 2000 from $299.2 million
at  September  30, 1999.  The loan growth  during the six months ended March 31,
2000  primarily  reflects loan  originations  net of repayments of $66.9 million
less loans sold of $5.6 million.  The portfolio  growth in the nine month period
primarily  reflects  increases of $42.5  million in one to four family  mortgage
loans,  $12.2 million in  multi-family  loans,  $4.6 million in commercial  real
estate loans,  $2.2 million in construction  loans,  $699,000 in consumer loans,
partially  offset by a decrease of $972,000 in land loans.  Total  securities at
March 31, 2000  decreased  $8.5 million to $130.1 million from $138.6 million at
September 30, 1999.

     Deposit liabilities  increased $31.1 million to $304.1 million at March 31,
2000 from  $273.0  million  at  September  30,  1999.  The  increase  in deposit
liabilities  primarily  reflects growth in the Company's in-store branch network
of $20.7 million as well as aggressive  cross-selling programs. Total borrowings

                                      -8-

<PAGE>


increased  by $28.8  million  to $176.7  million at March 31,  2000 from  $147.9
million at  September  30, 1999.  Funds from  increased  borrowings  and deposit
growth were primarily used to fund new loans.

     Stockholders'  equity  increased  by $93,000 to $32.1  million at March 31,
2000 from $32.0  million at  September  30,  1999.  The  increase  is  primarily
attributable  to net income  retained  after  dividends  of $1.1  million  and a
combined  increase of $430,000 relating to the employee stock ownership plan and
the management  recognition plan, partially offset by a $1.3 million increase in
the after-tax net unrealized loss on available-for-sale  securities and $171,000
in treasury stock repurchases. The ratio of stockholders' equity to total assets
decreased to 6.2% at March 31, 2000 from 7.0 % at September 30, 1999  reflecting
the substantial growth in assets.  Book value per share (computed based on total
shares issued less treasury shares)  increased to $14.41 at March 31, 2000, from
$14.30 at  September  30,  1999.  See  "Liquidity  and  Capital  Resources"  for
information regarding the Association's regulatory capital amounts and ratios.

Analysis of Net Interest Income

    The following table sets forth the Company's average balance sheets, average
yields and costs (on an annualized basis), and certain other information for the
three and six months  ended March 31,  2000 and 1999.  The yields and costs were
derived by dividing  interest income or expense by the average balance of assets
or liabilities,  respectively,  for the periods shown. Substantially all average
balances were computed based on daily  balances.  Interest  income  includes the
effect of deferred fees,  discounts,  and premiums  which are  considered  yield
adjustments.

                                      -9-

<PAGE>

<TABLE>


                                                                     For the Quarter Ended March 31,
                                           ------------------------------------------------------------------------------------
                                                                2000                                         1999
                                           ----------------------------------------    ----------------------------------------
                                                 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)                              $    354,616   $    6,463          7.29%     $206,204       $    3,785         7.34%
    Mortgage-backed securities (2)                91,576       1,570           6.86      115,569            1,827          6.32
    Other securities (2)                          40,537         757           7.47       38,519              676          7.02
    Other earning assets                          13,463         181           5.38       15,409              184          4.78
                                           ------------- -----------                 ------------      -----------
       Total interest-earning assets             500,192   $   8,971           7.17      375,701       $    6,472          6.89
                                                         ===========                                   ===========

Allowance for loan losses                        (1,544)                                     (1,404)
Non-interest-earning assets                       10,936                                       8,538
                                           -------------                               -------------
       Total assets                         $   509,584                                     $382,835
                                           =============                               =============
Liabilities and  Stockholders' Equity
Interest-bearing liabilities:
    NOW, club and money market accounts    $ 62,706.00          $338          2.16%     $  55,151.00      $313.00         2.27%
    Regular savings accounts (3)                  54,545         234           1.72           47,942          232          1.94
    Savings certificate accounts                 172,498       2,231           5.17          141,191        1,795          5.09
                                           ------------- -----------                   -------------  -----------
       Total interest-bearing deposits           289,749       2,803           3.87          244,284        2,340          3.83

    Borrowings                                   182,424       2,646           5.80           90,209        1,239          5.49
                                           ------------- -----------                   -------------  -----------
       Total interest-bearing liabilities        472,173  $    5,449           4.62          334,493   $    3,579          4.28
                                                         ===========                                  ===========

Non-interest-bearing liabilities                   5,625                                       6,390
                                           -------------                               -------------
       Total liabilities                         477,798                                     340,883

Stockholders' equity                              31,786                                      41,952
                                           -------------                               -------------
      Total liabilities and stockholders' eq$ity  509,584                               $    382,835
                                           =============                               =============
Net interest income                                       $    3,522                                   $     2,893
                                                         ===========                                  ===========
Average interest rate spread (4)                                              2.55%                                       2.61%
Net interest margin (5)                                                       2.82%                                       3.08%
Net interest-earning assets (6)             $      28,019                               $     41,208
                                           =============                               =============
Ratio of average interest-earning assets to
average  interest-bearing liabilities                                       105.93%                                     112.32%

</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>

<TABLE>


                                                                 For the Six Months Ended March 31,
                                     --------------------------------------------------------------------------------
                                                    2000                                      1999
                                     ----------------------------------------   -------------------------------------
                                     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)                          $ 341,644     $ 12,505          7.32%         $201,137      $ 7,544         7.50%
 Mortgage-backed securities (2)        93,770        3,197          6.82           116,723        3,691         6.32
 Other securities (2)                  40,904        1,517          7.42            42,231        1,491         7.06
 Other earning assets                  13,254          340          5.13            14,647          367         5.01
                                     --------     --------                        --------     --------
    Total interest-earning assets     489,572     $ 17,559          7.17           374,738     $ 13,093         6.99
                                     --------     --------                        --------     --------
                                                  --------                                     --------
Allowance for loan losses              (,1537)                                      (1,366)
Non-interest-earning assets            11,668                                        8,260
                                     ---------                                    --------
    Total assets                    $ 499,703                                     $381,632
                                    ---------                                     --------
                                     --------                                     --------

Liabilities and  Stockholders' Equity
Interest-bearing liabilities:
  NOW, club and money market accouts $  61,390     $    665          2.17%         $ 54,116     $    622         2.30%
  Regular savings accounts (3)          5,3910          473          1.75            47,176          479         2.03
  Savings certificate accounts         170,676        4,340          5.09           137,655        3,620         5.26
                                      ---------     --------                        --------     --------
     Total interest-bearing deposits    285,976        5,478          3.83           238,947        4,721        3.95

   Borrowings                           177,258        5,107          5.76            94,055        2,623        5.58
                                       ---------     --------                        --------     --------
     Total interest-bearing liabilities 463,234     $ 10,585          4.57           333,002     $  7,344        4.41
                                                     --------                                     --------
                                                     --------                                     --------

Non-interest-bearing liabilities         4,560                                        7,637
     Total liabilities                 467,794                                      340,639
                                                                                   --------
Stockholders' equity                    31,909                                       40,993
                                       --------
  Total liabilities and stockholders'
     equity                           $499,703                                     $381,632
                                      --------                                     --------
                                      --------                                     --------
Net interest income                                 $  6,974                                     $  5,749
                                                    --------                                     --------
                                                    --------                                     --------
Average interest rate spread (4)                                     2.60%                                        2.58%
Net interest margin (5)                                              2.85%                                        3.07%
Net interest-earning assets (6)       $ 26,338                                     $ 41,736
                                      --------                                     --------
                                      --------                                     --------
Ratio of average interest-earning assets
to average interest-bearing liabilities                            105.69%                                      112.53%




</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.

                                      -11-

<PAGE>





     The following  table presents the extent to which changes in interest rates
and  changes  in the  volume of  interest-earning  assets  and  interest-bearing
liabilities  affected the Company's  interest income and interest expense during
the three  months and six months  ended  March 31,  2000,  compared  to the same
period in the prior year.  Information is provided in each category with respect
to (i) changes  attributable to changes in volume (changes in volume  multiplied
by prior rate),  (ii) changes  attributable  to changes in rate (changes in rate
multiplied by prior volume),  and (iii) the net change. The changes attributable
to the combined impact of volume and rate have been allocated proportionately to
the changes due to volume and the changes due to rate.

<TABLE>


                                              For the Quarter Ended March 31,               For the Six Months Ended March 31,
                                                   2000 Compared to 1999                           1999 Compared to 1998
                                            ---------------------------------------    ---------------------------------------------
                                              Increase (Decrease)                         Increase (Decrease)
                                                     Due to                 Net                  Due to                    Net
                                            ------------------------                   --------------------------
                                            Volume         Rate          Change        Volume          Rate               Change
                                            ----------    ----------     ----------    ----------     -----------     --------------
                                                                                   (In thousands)

<S>                                         <C>          <C>            <C>          <C>            <C>                <C>
Interest-earning assets:
  Loans                                     $  2,704     $     (26)     $  2,678     $   5,146      $    (185)          $  4,961
  Mortgage-backed securities                    (403)          146          (257)         (768)           274               (494)
  Other securities                                36            45            81           (48)            74                 26
  Other earning assets                           (25)           22            (3)          (36)             9                (27)
                                            --------    ----------     ---------    ----------     -----------     ---------------
                   Total                       2,312           187         2,499         4,294            172               4,466
                                            --------    ----------     ---------    ----------     -----------     ---------------
Interest-bearing liabilities:
  NOW, club and money market accounts             41           (16)           25            80            (37)                 43
  Regular savings accounts                        30           (28)            2            64            (70)                 (6)
  Savings certificate accounts                   407            29           436           841           (121)                720
  Borrowings                                   1,333            74         1,407         2,397             87               2,484
                                            --------    ----------    ----------    ----------                     ---------------
                   Total                       1,811            59         1,870         3,382           (141)               3,241
                                            --------    ----------    ----------    ----------     ----------      ---------------

Net change in net interest income           $    501    $      128     $     629     $     912     $      313      $         1,225
                                            ========     =========     =========    ==========     ==========      ===============
</TABLE>


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

     General.  Net income for the three months ended March 31, 2000 was $794,000
or diluted  EPS of $0.39  compared  to net income of  $667,000 or diluted EPS of
$0.27 for the quarter ended March 31, 1999. Basic earnings per common share were
$0.40 for the quarter ended March 31, 2000 compared to $0.27 for the same period
in 1999. The increase in net income of $127,000 reflects an increase of $629,000
in net interest  income,  a $71,000 increase in income tax expense and a $40,000
decrease  in the  provision  for loan  losses,  partially  offset by a  $446,000
increase in non-interest expense, and a $25,000 decrease in non-interest income.


                                      -12-

<PAGE>

     Net  Interest Income. Net interest  income for the quarter  ended March 31,
2000 was $3.5  million,  an increase of $629,000 from $2.9 million for the prior
year's  period.  The increase  primarily  reflects  the  positive  effect on net
interest   income  of  higher   average   interest-earning   assets,   primarily
attributable  to the  investment of proceeds from deposit and borrowing  growth,
partially offset by a decline in the average  interest rate spread.  The decline
in the average interest rate spread  primarily  reflects an increase in the cost
of  funds  due  to a  larger  proportion  of  higher-rate  borrowings  to  total
interest-bearing  funds,  partially  offset  by an  increase  in  the  yield  on
mortgage-backed securities and other investments. The Company's average interest
rate spread  decreased to 2.55% for the quarter  ended March 31, 2000 from 2.61%
for the same quarter last year, while the net interest margin decreased to 2.82%
from 3.08% a year earlier.

     Interest Income.  Interest and dividend income totaled $9.0 million for the
three months ended March 31, 2000, an increase of $2.5 million  compared to $6.5
million for the three months ended March 31, 1999.  This  increase  reflects the
effect of a $124.5  million  increase in total average  interest-earning  assets
coupled  with a 28 basis point  increase in the average  yield on such assets to
7.17% for the three  months  ended March 31, 2000 from 6.89% for the same period
in the prior year.

     Interest  income on loans increased $2.7 million for the three months ended
March 31, 2000  compared to the same  period in the prior year,  reflecting  the
effect of a $148.4 million increase in the average balance partially offset by a
5 basis point decrease in the average yield. The increase in the average balance
of loans  was  primarily  attributable  to an  increase  in one- to  four-family
residential  mortgage  loans.  The  decline in the average  yield was  primarily
attributable to the origination of lower-yielding one- to four-family adjustable
rate  mortgage  loans with initial  fixed-rate  periods of five,  seven,  or ten
years, with annual adjustments thereafter.

     On a combined basis,  interest and dividend income on  mortgage-backed  and
other securities  decreased  $176,000 to $2.3 million for the three months ended
March 31, 2000 from $2.5  million  for the three  months  ended March 31,  1999.
Interest on mortgage-backed securities decreased by $257,000 attributable to the
effects of a $24.0 million decrease in the average balance partially offset by a
54 basis  point  increase  in the average  yield.  Interest on other  securities
increased by $81,000,  primarily  attributable to a $2.0 million increase in the
average balance and a 45 basis point increase in the average yield.

     Interest and dividend  income on other  earning  assets  decreased  $3,000,
primarily  attributable  to a $1.9  million  decrease  in the  average  balance,
partially offset by a 60 basis point increase in the average yield.

     Interest  Expense.  Interest  expense  totaled  $5.4  million for the three
months ended March 31,  2000,  an increase of $1.9 million from the prior year's
quarter.  Interest expense on deposits  increased  $463,000 compared to the same
period in the prior year,  reflecting the effect of an $45.5 million increase in
the average  balance,  coupled with a 4 basis point increase in the average rate
on interest-bearing  deposits to 3.87% for the three months ended March 31, 2000
from 3.83% for the three months  ended March 31,  1999.  The increase in average

                                      -13-

<PAGE>

interest-bearing  deposits  consisted  of a $31.3  million  increase  in average
savings  certificate  accounts (to $172.5 million from $141.2  million),  a $7.5
million  increase  in average  NOW,  club and money  market  accounts  (to $62.7
million  from $55.2  million)  and a $6.6  million  increase in average  regular
savings accounts (to $54.5 million from $47.9 million).

     Interest  expense on borrowings  increased $1.4 million to $2.6 million for
the three  months  ended March 31, 2000 from $1.2  million for the three  months
ended March 31, 1999, as the Company continued to increase borrowings, primarily
Federal  Home Loan Bank  (FHLB)  advances,  to  leverage  available  capital and
support further loan growth.  Total  borrowings  averaged $182.4 million for the
three months ended March 31, 2000 at an average rate of 5.80%  compared to $90.2
million and 5.49%, respectively,  for the prior-year quarter. See "Liquidity and
Capital Resources" for further discussion of the Company's securities repurchase
agreements.

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

      The provision for loan losses was $35,000 and $75,000 for the three months
ended  March  31,  2000 and 1999,  respectively.  Non-performing  loans  totaled
$400,000 at March 31,  2000,  compared to  $755,000  at  September  30, 1999 and
$777,000 at March 31, 1999. See "Asset Quality" for a further  discussion of the
Company's non-performing assets and allowance for loan losses.

Non-Interest  Income.  Non-interest  income for the three months ended March 31,
2000 decreased  $25,000 to $418,000,  from $443,000 for the comparable period in
1999. The decrease is primarily  attributable  to a $85,000  decrease in the net
gain on sales of real estate mortgage loans held for sale, a $73,000 decrease in
the net gain on sales of securities,  a $31,000  decrease in other  non-interest
income,  partially  offset by a $164,000  increase  in service  charges  and fee
income.  In the three months ended March 31, 2000,  mortgage  loan sales totaled
$2.6 million  resulting in net gains of $24,000  (including  the  recognition of
mortgage  servicing  assets),  as compared to loan sales of $9.2  million in the
1999  quarter,  which  resulted in gains of  $109,000.  The net loss on sales of
securities  amounted  to $3,000 for the three  months  ended  March 31,  2000 as
compared to gains of $70,000 for the March 31,  1999,  quarter.  The increase in
service  charges and fee income  primarily  results  from $78,000 in income from
Yonkers Financial  Services,  Inc, a wholly-owned  subsidiary of the Association
that began its  operations  to sell  annuities  and mutual  funds in the quarter
ended December 31, 1999, as well as increases in transaction volume.

                                      -14-

<PAGE>

     Non-interest  Expense.  Non-interest  expense  increased  $446,000  to $2.6
million for the three months ended March 31, 2000,  compared to $2.2 million for
the three  months  ended  March 31,  1999.  Compensation  and  benefits  expense
increased $281,000 from the prior-year primarily due to increased costs relating
to additional  staffing in three new in-store  branches and the loan  department
coupled with performance-based increases for certain staff members. The $113,000
increase  in other  non-interest  expense  is  primarily  attributable  to costs
associated  with the proxy fight that was  successfully  concluded in January of
this year. The increases of $40,000 in data processing  service fees and $33,000
in occupancy and equipment expense primarily reflects increased costs associated
with the  establishment  of in-store  branches in May 1999,  September 1999, and
October 1999.

     Income Tax  Expense.  Income tax expense was  $465,000 for the three months
ended March 31, 2000 and $394,000  for the  comparable  1999 period,  reflecting
higher   pre-tax   income  and  effective  tax  rates  of  36.9%  and  37.13  %,
respectively.


Comparison of Operating Results for the Six Months Ended March 31, 2000 and 1999

     General.  Net  income  for the six  months  ended  March 31,  2000 was $1.5
million or diluted earnings per common share of $0.73, compared to net income of
$1.3  million or diluted  earnings  per common share of $0.54 for the six months
ended March 31, 1999. The $164,000  increase in net income was attributable to a
$1.2  million  increase  in net  interest  income,  a  $80,000  decrease  in the
provision  for loan  losses,  partially  offset by a $1.1  million  increase  in
non-interest  expense,  a $28,000  increase in income tax expense,  and a $5,000
decrease in non-interest income.

     Net Interest Income. Net interest income for the six months ended March 31,
2000 was $7.0  million,  as compared to $5.8  million for the same period in the
prior year. The increase  primarily reflects the positive effect on net interest
income of higher average interest earning assets,  primarily attributable to the
investment of proceeds from deposits and borrowing growth and an increase in the
average  interest  rate  spread.  The  Company's  average  interest  rate spread
increased  to 2.60% for the six months  ended  March 31, 2000 from 2.58% for the
same period in the prior year,  while the net interest margin decreased to 2.85%
for the 2000 six month period from 3.07% a year earlier.

     Interest Income. Interest and dividend income totaled $17.6 million for the
six months ended March 31, 2000,  an increase of $4.5 million  compared to $13.1
million for the six months  ended March 31,  1999.  This  increase  reflects the
effect of a $114.8 million increase in total average interest-earning assets and
an 18 basis point  increase in the average yield on such assets to 7.17% for the
six months  ended  March 31,  2000 from  6.99% for the same  period in the prior
year.

     Interest  income on loans  increased  $5.0 million for the six months ended
March 31, 2000  compared to the same  period in the prior year,  reflecting  the
effect of a $140.5 million  increase in the average balance  partially offset by

                                      -15-

<PAGE>


an 18 basis point  decrease in the average  yield.  The  increase in the average
balance of loans was primarily attributable to an increase in one-to-four family
residential  mortgage loans. The lower average yield reflects the origination of
lower-yielding  one- to four-family  adjustable rate mortgage loans with initial
fixed-rate  periods  of five,  seven,  or ten  years,  with  annual  adjustments
thereafter.

     On a combined basis,  interest and dividend income on  mortgage-backed  and
other  securities  decreased  $468,000 to $4.7  million for the six months ended
March 31,  2000 from $5.2  million  for the six  months  ended  March 31,  1999.
Interest on mortgage-backed  securities  decreased by $494,000,  attributable to
the effects of a $23.0 million decrease in the average balance, partially offset
by a 50 basis point increase in the average yield.  Interest on other securities
increased by $26,000,  primarily  attributable to 36 basis point increase in the
average  yield,  partially  offset by a $1.3  million  decrease  in the  average
balance.

     Interest and dividend  income on other earning  assets  decreased  $27,000,
primarily  attributable  to a  $1.4  million  decrease  in the  average  balance
partially offset by a 12 basis point increase in the average yield.

     Interest Expense. Interest expense totaled $10.6 million for the six months
ended March 31,  2000,  an increase of $3.2  million  from the prior  year's six
months.  Interest expense on deposits  increased  $757,000  compared to the same
period in the prior year,  reflecting the effect of an $47.0 million increase in
the average balance partially offset by a 12 basis point decrease in the average
rate on  interest-bearing  deposits to 3.83% from 3.95% for the six months ended
March 31, 1999. The increase in average interest-bearing deposits consisted of a
$33.0  million  increase  in average  savings  certificate  accounts  (to $170.7
million from $137.7  million),  a $7.3 million increase in average NOW, club and
money market  accounts (to $61.4 million from $54.1  million) and a $6.7 million
increase  in average  regular  savings  accounts  (to $53.9  million  from $47.2
million).

     Interest  expense on borrowings  increased $2.5 million to $5.1 million for
the six months  ended March 31, 2000 from $2.6  million for the six months ended
March 31, 1999.  Total borrowings for the period averaged $177.3 million with an
average rate of 5.76% compared to $94.1 million and 5.58%, 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 $70,000 and $150,000 for the six
months ended March 31, 2000 and 1999,  respectively.  Net loan  charge-offs were
$6,600 for the six months  ended March 31, 2000  compared to net  recoveries  of

                                      -16-

<PAGE>

$1,000 for the six months  ended  March 31,  1999.  See  "Asset  Quality"  for a
further discussion of the Company's non-performing assets and allowance for loan
losses.

     Non-Interest Income. Non-interest income for the six months ended March 31,
2000 decreased  $5,000,  to $728,000 from $733,000 for the comparable  period in
1999.  The  decrease is primarily  attributable  to decreases in the net gain on
sales of loans  held for sale,  the net gain on sales of  securities,  and other
non-interest income,  partially offset by an increase in service charges and fee
income.  Mortgage loans sold during the six months ended March 31, 2000 amounted
to $5.6 million resulting in net gains of $47,000,  as compared to loan sales of
$29.3 million during the six months ended March 31, 1999,  which resulted in net
gains of $246,000.  Net gain on sales of  securities  amounted to $1,000 for the
six   months   ended   March  31,   2000   reflecting   sales  of   $98,000   in
available-for-sale  securities  during the period,  while gains of $73,000  were
incurred on sales of $17.2 million in the prior year's  period.  The increase in
service  charges and fee income  primarily  results  from $93,000 in income from
Yonkers  Financial  Services Inc., a wholly-owned  subsidiary of the Association
that began its  operations  to sell  annuities  and mutual  funds in the quarter
ended December 31, 1999 as well as increases in transaction volume.

     Non-interest  Expense.  Non-interest expense increased $1.1 million to $5.2
million for the six months  ended March 31,  2000,  compared to $4.1 million for
the six months ended March 31, 1999. Compensation and benefits expense increased
$592,000  from the  prior-year  six  months  primarily  due to  increased  costs
relating to  additional  staffing in three new  in-store  branches  and the loan
department coupled with  performance-based  increases for certain staff members.
The $319,000 increase in other non-interest expense is primarily attributable to
costs associated with the proxy fight that was successfully concluded in January
of this year and the three new in-store  branches.  The increases of $143,000 in
occupancy and equipment and $69,000 in data  processing  service fees  primarily
reflects  increased costs associated with the establishment of in-store branches
in May 1999, September 1999, and October 1999.

     Income Tax  Expense.  Income tax expense for the six months ended March 31,
2000 was $885,000 as compared to $857,000 for the 1999 period, reflecting higher
pre-tax  income and  effective tax rates of 37.1% and 39.1%,  respectively.  The
decrease in the  effective  tax rate  reflects the  ancillary  benefits from the
aforementioned REIT.


Asset Quality

     Non-performing  loans  totaled  $400,000  at March 31,  2000,  compared  to
$755,000  at  September  30,  1999 and  $777,000  March 31,  1999.  The ratio of
non-performing  loans to total  loans  receivable  was 0.11% at March 31,  2000,
compared  to 0.25% at  September  30,  1999 and  0.37% at March  31,  1999.

                                      -17-
<PAGE>

The  allowance  for loan  losses was $1.6  million or 0.43% of total  loans
receivable  at March 31, 2000,  compared to $1.5 million or 0.50% of total loans
receivable  at  September  30, 1999 and $1.5 million or 0.69% at March 31, 1999.
The ratio of the allowance for loan losses to  non-performing  loans was 391.50%
at March 31,  2000,  compared  to 199.07% at  September  30, 1999 and 187.00% at
March 31, 1999.

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


<TABLE>


                                                       March 31,                September 30,            March 31,
                                                         2000                       1999                     1999
                                                       --------                 -------------            --------
                                                                       (Dollars in thousands)

<S>                                                    <C>                     <C>                      <C>
Non-accrual loans past due ninety days or more:
  Real estate mortgage loans:
    One-to-four family                                 $  230                   $  347                   $  552
    Commercial                                            105                      305                      198
    Consumer Loans                                                                  65                      103
                                                       ------                   ------                   -------
      Total                                               400                      755                      777

Real estate owned, net                                    ---                      ---                      183
                                                       ------                   ------                   ------
Total non-performing assets                            $  400                   $  755                   $  960
                                                       ======                   ======                   ======
Allowance for loan losses                              $1,566                   $1,503                   $1,453
                                                       ======                   ======                   ======

Ratios:

Non-performing loans to total loans receivable           0.11%                    0.25%                    0.37%
Non-performing assets to total assets                    0.08                     0.16                     0.25
Allowance for loans loss to:
  Non-performing loans                                 391.50                   199.07                   187.00
  Total loans receivable                                 0.43                     0.50                     0.69

</TABLE>

Liquidity and Capital Resources

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

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

                                      -18-

<PAGE>

     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, 2000 was 4.0%,
and the Company's actual liquidity ratio was 6.3%.

    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, 2000,  the Company had  outstanding  loan  origination
commitments  of $19.2  million,  unadvanced  home equity lines of credit of $4.1
million  and  undisbursed  construction  loans in process of $4.4  million.  The
Company  anticipates  that it will have  sufficient  funds available to meet its
current loan origination and other  commitments.  At March 31, 2000, the Company
had the  ability to obtain  additional  FHLB  advances  of  approximately  $75.5
million.  Certificates  of deposit  scheduled to mature in one year or less from
March 31,  2000  totaled  $103.8  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, 2000  consisted of $98.2 million in
borrowings  under  securities  repurchase  agreements and FHLB advances of $78.5
million. FHLB advances at March 31, 2000 had a weighted average interest rate of
6.09% and a weighted  average  term to maturity of 3.1 years with a call date in
1.2 years. In the securities  repurchase  agreements,  the Company borrows funds
through  the  transfer  of  debt   securities  to  the  FHLB  of  New  York,  as
counterparty,  and concurrently agrees to repurchase the identical securities at
a fixed price on a specified date. The Company  accounts for these agreements as
secured  financing  transactions  since it maintains  effective control over the
transferred  securities.  Accordingly,  the transaction proceeds are recorded as
borrowings and the underlying securities continue to be carried in the Company's
debt  securities  portfolio.  Repurchase  agreements are  collateralized  by the
securities sold and, in certain cases, by additional margin  securities.  During
the six  months  ended  March 31,  2000,  the  average  borrowings  under  these
agreements  amounted  to  $109.9  million  and  the  maximum  month-end  balance
outstanding was $114.1 million.

                                      -19-

<PAGE>


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


<TABLE>


                                Repurchase Borrowings
-------------------------------------------------------------------------------------
                                                                      Accrued               Weighted               Fair Value
                                                                      Interest              Average              of Collateral
    Remaining Term to Final Maturity (1)          Amount            Payable (2)               Rate               Securities (3)
-------------------------------------------- ----------------- ---------------------- --------------------  ------------------------
                                                                                      (Dollars in thousands)
                                                                                      --------------------  ------------------------
<S>                                         <C>               <C>                         <C>               <C>
Within 30 days                               $     7,000       $         4                 5.85              $          10,601
After 30 days but within one year                 20,181               110                 6.03                         21,132
After one but within three years                  22,500               168                 5.99                         26,807
After three but within five years                  8,100               ---                 5.97                          8,445
After five years                                  40,412               340                 5.67                         43,391
                                             -----------       -----------                                   -----------------
                   Total                     $    98,193       $       622                 5.86              $         110,376
                                             ===========       ===========                                   =================


</TABLE>

(1) The weighted average remaining term to final maturity was approximately
4.6  years at March 31,  2000.  Certain  securities  repurchase  agreements  are
callable  by the FHLB of New York,  prior to the  maturity  date.  The  weighted
average  remaining  term to maturity,  giving effect to earlier call dates,  was
approximately  1.6 years at March 31, 2000.
(2) Included in other  liabilities in the  consolidated  balance sheet.
(3)  Represents  the fair value of the  mortgage-backed  securities  ($81.0
million) and other debt securities ($29.4 million) which were transferred to the
counterparty,  including  accrued  interest  receivable of $1.1  million.  These
securities  consist  of   available-for-sale   securities  and  held-to-maturity
securities with fair values of $96.6 million and $13.8 million, respectively.

     At  March  31,  2000,  the  Company's  "amount  at risk"  under  securities
repurchase  agreements was approximately  $11.6 million.  This amount represents
the  excess of (i) the  carrying  amount,  or  market  value if  higher,  of the
securities  transferred to the FHLB of New York plus accrued interest receivable
over (ii) the amount of the repurchase liability plus accrued interest payable.

     At March 31, 2000 the  Association  exceeded all of its regulatory  capital
requirements  with a tangible  capital level of 6.37% of total adjusted  assets,
which is above  the  required  level of  1.5%;  core  capital  of 6.37% of total
adjusted assets, which is above the required level of 4.0%; and total risk-based
capital of 14.89%,  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.

                                      -20-

<PAGE>


Year 2000 Considerations

     As of the time of this filing,  the Company's core systems are  functioning
well with no known interruptions  associated with the Y2K issues. The Company is
also not aware of any  significant  events  that have  happened  with any of its
vendors in connection  with the Y2K issue,  however there may have been negative
effects  that we are not aware of. We plan to continue to monitor our systems as
well as those of our  vendors.  Costs  incurred  through  March  31,  2000  were
approximately $150,000. This includes Y2K remediation efforts and planned system
upgrades related to business expansion.  Approximately $115,000 of this cost was
recognized in fiscal 1999.  Management  estimates that  remaining  costs will be
nominal.

Part I. Item 3.

Quantitative and Qualitative Disclosures About Market Risk

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

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

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

     The  Company is  involved  as  plaintiff  or  defendant  in  various  legal
proceedings  arising in the normal  course of its  business.  While the ultimate
outcome of these various legal  proceedings  cannot be predicted with certainty,
it is the opinion of  management  that the  resolution  of these  legal  actions
should not have a material effect on the Company's financial  position,  results
of operations or liquidity.

Item 2.  Changes in Securities

     None

Item 3.  Defaults Upon Senior Securities

     None

                                      -21-

<PAGE>

Item 4.  Submission of Matters to a Vote of Security Holders

     a.   The Company held its annual meeting of stockholders on January 27,
          2000

     b.  The  following  Directors  were  elected  at  the  meeting:  Donald  R.
         Angelilli, William G. Bachop, and Eben T. Walker.   The terms of office
         of the following Directors contiuned after the meeting: Richard F.
         Komosinski, Charles D. Lohrfink, Michael Martin, and P. Anthony Sarubbi
     c.  The following matters were voted upon, with the results of the voting
         on such matters indicated:

         1.  Election of directors:

    NOMINEE                            FOR                        WITHHELD
    -------                            ---                        --------
    Donald R. Angelilli                1,189,117                   20,982
    William G. Bachop                  1,187,605                   22,494
    Eben T. Walker                     1,188,117                   21,982
    Lawrence B. Seidman                  648,747                    2,080
    Dennis Pollack                       648,747                    2,080

    Broker Non-Vote:                     319,583

2. Ratification of the appointment of KPMG LLP as the independent auditors of
   the Company for the fiscal year ending September 30, 2,000:

   For:                               1,784,737
   Against:                              14,944
   Abstained:                            61,245
   Broker Non-Vote:                     319,283


Item 5.  Other Information

         None

Item 6.  Exhibits and Reports on Form 8-K
         (a)  Exhibits

         Exhibit No.                                             Name
              27                                        Financial Data Schedule

         (b)  Reports on Form 8-K

During the quarter ended March 31, 2000, the Company filed the following reports
on form 8-K:

On  January  7,  2000,  under  Item 5, the  Company  issued a press  release  in
connection with estimated first quarter earnings.

                                      -22-

<PAGE>


On January  13,  2000,  under Item 5, the  Company  issued  a  press release in
connection with projected annual earnings.

On January  18,  2000,  under  Item 5, the  Company  issued a press  release in
connection with a Standstill Agreement.

On  January  27,  2000,  under  Item 5, the  Company  issued a press  release in
connection with first quarter earnings and dividend declaration.

On  January  28,  2000,  under  Item 5, the  Company  issued a press  release in
connection with the results of annual meeting.

A Form 8K/A was filed on February 29,  2000,  under Item 7, in  connection  with
Amended and Restated Standstill Agreement.


                                      -23-


<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:  May 12, 2000                       /s/  Richard F. Komosinski
                                          --------------------------
                                          Richard F. Komosinski,
                                          President and Chief Executive Officer
                                          (Principal Executive Officer)


Date:  May 12, 2000                       /s/ Joseph D. Roberto
                                          ----------------------
                                          Joseph D. Roberto
                                          Vice President, Treasurer and
                                           Chief Financial Officer
                                          (Principal Financial Officer)