SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 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 September 30, 2002

                                       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 000-24811

                              SOUND FEDERAL BANCORP
             (Exact name of registrant as specified in its charter)

          Federal                                               13-4029393
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                               Identification No.)

                 300 Mamaroneck Ave., Mamaroneck, New York 10543
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (914) 698-6400
               (Registrant's telephone number including area code)

                                       N/A
            ---------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed from last Report)

     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  twelve  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.


                                                        Shares
                                                   Outstanding at
                Class                             November 13, 2002
              --------------                      -----------------
               Common  Stock,                        4,778,292
               par value, $0.10


<PAGE>


                                TABLE OF CONTENTS


                         PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

  Consolidated Balance Sheets at September 30, 2002 and March 31, 2002         1

  Consolidated Statements of Income for the Three and Six Months
   Ended September 30, 2002 and 2001                                           2

  Consolidated Statement of Changes in Stockholders' Equity for the Six Months
   Ended September 30, 2002                                                    3

  Consolidated Statements of Cash Flows for the Six Months
   Ended September 30, 2002 and 2001                                           4

  Notes to Unaudited Consolidated Financial Statements                         5

Item 2. Management's Discussion and Analysis of Financial Condition and
         Results of Operations                                                 9

Item 3.  Quantitative and Qualitative Disclosures about Market Risk           17

Item 4.   Controls and Procedures                                             17


                          PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings                                                    18

Item 2.  Changes in Securities and Use of Proceeds                            18

Item 3.  Defaults upon Senior Securities                                      18

Item 4.  Submission of Matters to a Vote of Security Holders                  18

Item 5.  Other Information                                                    18

Item 6.  Exhibits and Reports on Form 8-K                                     18

         Signatures                                                           19

 Certification of Chief Executive Officer Pursuant to Section 302 of
  the Sarbanes-Oxley Act of 2002                                              20

 Certification of Chief Financial Officer Pursuant to Section 302 of
  the Sarbanes-Oxley Act of 2002                                              21


<PAGE>




Part 1. - Financial Information
Item 1.  Financial Statements

<TABLE>
<CAPTION>

Sound Federal Bancorp and Subsidiary
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands)                                                              September 30,           March 31,
                                                                                         2002                  2002
                                                                                 --------------------- ---------------------

Assets
<S>                                                                              <C>                       <C>
Cash and due from banks                                                          $   8,851                 6,931
Federal funds sold and other overnight deposits                                     33,428                19,847
                                                                                 -----------        -------------
   Total cash and cash equivalents                                                  42,279                26,778
                                                                                 -----------        -------------
Securities available for sale, at fair value (including $36,966 and $35,779
   pledged as collateral for borrowings under repurchase agreements at
   September 30, 2002 and March 31, 2002, respectively)                            159,178               150,231
Loans, net:
  Mortgage loans                                                                   443,423               419,120
  Consumer loans                                                                     1,647                 1,469
  Allowance for loan losses (Note 4)                                                (2,346)               (2,221)
                                                                                 -----------         ------------
            Total loans, net                                                       442,724               418,368
                                                                                 -----------         ------------

 Accrued interest receivable                                                         3,464                 3,241
 Federal Home Loan Bank stock                                                        4,141                 4,141
Premises and equipment, net                                                          5,613                 5,459
 Deferred income taxes                                                                 144                   942
 Goodwill                                                                           13,970                13,970
 Other assets                                                                        1,119                   855
                                                                                 -----------          ------------
            Total assets                                                          $672,632               623,985
                                                                                 ===========          ============

Liabilities and Stockholders' Equity
Liabilities:
  Deposits                                                                        $565,834               519,905
  Borrowings (Note 5)                                                               35,012                34,922
  Mortgagors' escrow funds                                                           2,788                 5,021
  Accrued expenses and other liabilities                                             2,819                 3,122
                                                                                 ----------           -------------
            Total liabilities                                                      606,453               562,970
                                                                                 ----------           -------------
Stockholders' equity (Note 1):
 Preferred stock ($0.10 par value; 10,000,000 shares authorized;
      none issued and outstanding)                                                       -                     -
   Common stock ($0.10 par value; 20,000,000 shares authorized; 5,223,218 and
      5,220,218 shares issued at September 30, 2002 and March 31, 2002,
      respectively)                                                                    522                   522
   Additional paid-in capital                                                       22,660                22,525
   Treasury stock, at cost (444,926 shares at September 30, 2002 and
      at March 31, 2002)                                                            (4,350)               (4,350)
   Common stock held by Employee Stock Ownership Plan ("ESOP")                      (1,009)               (1,105)
   Common stock awards under the Recognition and Retention Plan ("RRP")               (172)                 (244)
   Retained earnings                                                                46,444                42,566
   Accumulated other comprehensive income, net of taxes (Note 6)                     2,084                 1,101
                                                                                 ----------            ------------
            Total stockholders' equity                                              66,179                61,015
                                                                                 -----------           ------------
            Total liabilities and stockholders' equity                            $672,632               623,985
                                                                                 ===========           ============
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

                                      -1-

<Page>

<TABLE>
<CAPTION>


Sound Federal Bancorp and Subsidiary

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
                                                        For the Quarter Ended          For the Six Months Ended
                                                            September 30,                    September 30,
                                                     -----------------------------   ------------------------------
                                                         2002         2001               2002         2001
Interest and Dividend Income
<S>                                                   <C>          <C>                <C>             <C>
 Loans                                                $ 7,626      $  6,270           $ 15,240        $ 12,083
 Mortgage-backed and other securities                   2,007         2,949              4,047           6,096
 Federal funds sold and other overnight deposits          127           187                232             494
 Other earning assets                                      38            58                 84             156
                                                     ---------     ---------         ----------       ---------
 Total interest and dividend income                      9,798        9,464             19,603          18,829
                                                     ---------     ---------         ----------       ---------
Interest Expense
 Deposits                                                3,102        4,683              6,186           9,737
 Borrowings                                                411          257                827             526
 Other interest-bearing liabilities                         17           21                 37              37
                                                     ---------     ---------         ----------       ---------
 Total interest expense                                  3,530        4,961              7,050          10,300
                                                     ----------     ---------         ----------       ---------
Net interest income                                      6,268        4,503             12,553           8,529
 Provision for loan losses (Note 4)                         50           25                125              50
                                                     ---------     ---------         ----------       ---------
 Net interest income after provision for loan losses     6,218        4,478             12,428           8,479
                                                     ---------     ---------         ----------       ---------

Non-Interest Income
 Service charges and fees                                  211          169                381             308
 Gain on sale of real estate owned                          13            -                 13              57
                                                     ---------     ---------         ----------       ---------
 Total non-interest income                                 224          169                394             365
                                                     ---------     ---------         ----------       ---------

Non-Interest Expense
 Compensation and benefits                               1,623          1,251            3,051          2,476
 Occupancy and equipment                                   385            372              829            693
 Data processing service fees                              258            215              487            407
 Advertising and promotion                                 278            153              426            309
 Other                                                     665            430            1,259            870
                                                     ---------      ---------         ----------     ---------
 Total non-interest expense                              3,209          2,421            6,052          4,755
                                                     ---------      ---------         ----------     ---------

 Income before income tax expense                        3,233          2,226            6,770          4,089
 Income tax expense                                      1,203            854            2,579          1,542
                                                     ---------      ---------         ----------     ---------
 Net income                                           $  2,030       $  1,372          $ 4,191        $ 2,547
                                                     =========      =========         ==========     =========

Basic earnings per share (Note 3)                     $   0.44       $   0.30          $  0.90        $  0.55
                                                     =========      =========         ==========     =========
Diluted earnings per share (Note 3)                   $   0.43       $   0.29          $  0.88        $  0.55
                                                     =========      =========         ==========     =========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

                                      -2-
<PAGE>

Sound Federal Bancorp and Subsidiary
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Six Months Ended September 30, 2002
(Unaudited)
(Dollars in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                                                 Common        Comon
                                                                 Addtional                       Stock         Stock
                                                     Common       Paid-In        Treasury        Held By       Awards
                                                     Stock        Capital         Stock          ESOP          Under RRP
                                                  -----------    ----------     ----------      --------      ----------
<S>                                                <C>            <C>           <C>             <C>            <C>
Balance at March 31, 2002                          $    522       $ 22,525      $ (4,350)       $ (1,105)      $  (244)
Net income                                               -             -             -              -               -
Other comprehensive income (Note 6)                      -             -             -              -               -

  Total comprehensive income
Dividends paid ($0.16 per share)                         -             -             -              -               -
Issuance of stock pursuant to stock option plan          -              27           -              -               -
Vesting of RRP shares                                    -             -             -              -                72
ESOP shares committed to be released for
    allocation                                           -             108           -                96             -
                                                  ----------     -----------    ---------     -----------       ---------
Balance at September 30, 2002                      $    522       $ 22,660      $(4,350)       $  (1,009)       $  (172)
                                                  ==========     ===========    =========     ===========       =========
</TABLE>


Sound Federal Bancorp and Subsidiary
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Six Months Ended September 30, 2002
(Unaudited)
(Dollars in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                     Accumulated
                                                                        Other               Total
                                                    Retained         Comprehensive       Stockholders
                                                    Earnings            Income              Equity
                                                   ----------        -------------       -------------
<S>                                                <C>               <C>                  <C>
Balance at March 31, 2002                          $  42,566         $   1,101            $  61,015
Net income                                             4,191                -                 4,191
Other comprehensive income (Note 6)                        -                -                   983
                                                                                           --------
  Total comprehensive income                                                                  5,174
Dividends paid ($0.16 per share)                        (313)               -                  (313)
Issuance of stock pursuant to stock option plan            -                -                    27
Vesting of RRP shares                                      -                -                    72
ESOP shares committed to be released for
    allocation                                             -                -                   204
                                                   ----------        -------------        ----------
Balance at September 30, 2002                      $  46,444         $   2,084             $ 66,179
                                                   ==========        =============        ==========

</TABLE>

See accompanying notes to unaudited consolidated financial statements.

                                      -3-
<PAGE>

<TABLE>
<CAPTION>


Sound Federal Bancorp and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)                                                                         For the Six Months Ended
(In thousands)                                                                           September 30,
                                                                            -----------------------------------------
                                                                                   2002                  2001
                                                                            --------------------  -------------------
OPERATING ACTIVITIES
<S>                                                                             <C>                  <C>
  Net income                                                                    $   4,191            $     2,547
  Adjustments to reconcile net income to net cash provided
      by operating activities:
  Provision for loan losses                                                           125                     50
  Depreciation, amortization and accretion                                            532                   (496)
  ESOP and RRP expense                                                                276                    190
  Income taxes                                                                        216                  2,253
  Gain on sale of real estate owned                                                   (13)                   (57)
  Other adjustments, net                                                             (552)                  (265)
                                                                            --------------------  -------------------
           Net cash provided by operating activities                                4,775                  4,222
                                                                            --------------------  -------------------

INVESTING ACTIVITIES
  Purchases of securities available for sale                                      (46,561)               (24,421)
  Proceeds from principal payments, maturities and calls of securities             39,238                 48,428
  Disbursements for loan originations, net of principal repayments                (24,986)               (46,234)
  Net decrease in certificates of deposit                                               -                  1,491
  Proceeds from sales of real estate owned                                            127                    254
  Purchases of premises and equipment                                                (502)                   (52)
                                                                            --------------------  -------------------
          Net cash used in investing activities                                   (32,684)               (20,534)
                                                                            --------------------  -------------------


FINANCING ACTIVITIES
  Net increase in deposits                                                         45,929                  6,943
  Net decrease in mortgagors' escrow funds                                         (2,233)                (1,867)
  Issuance of stock pursuant to stock option plan                                      27                    -
  Purchases of treasury stock                                                           -                   (483)
  Dividends paid on common stock                                                     (313)                  (273)
                                                                            --------------------  -------------------
          Net cash provided by financing activities                                43,410                  4,320
                                                                            --------------------  -------------------

  Increase (decrease) in cash and cash equivalents                                 15,501                (11,992)
  Cash and cash equivalents at beginning of period                                 26,778                 40,849
                                                                            --------------------  -------------------
  Cash and cash equivalents at end of period                                    $  42,279            $    28,857
                                                                            ====================  ===================

SUPPLEMENTAL INFORMATION
Interest paid                                                                   $   7,018            $    10,155
Income taxes paid (received)                                                        2,316                   (657)
Loans transferred to real estate owned                                                171                    253
                                                                            ====================  ==================
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

                                      -4-
<PAGE>


Sound Federal Bancorp and Subsidiary

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.       Reorganization and Stock Offerings

     On October 8, 1998, Sound Federal Bancorp issued shares of its common stock
in connection with a Plan of Reorganization ("the  "Reorganization") and related
Subscription and Community  Offering (the  "Offering").  In the  Reorganization,
Sound  Federal  Savings  and Loan  Association  (the  "Bank")  converted  from a
federally  chartered mutual savings  association to a federally  chartered stock
savings  association  (the  "Conversion").  The  Bank  became  the  wholly-owned
subsidiary of Sound Federal Bancorp, which became the majority-owned  subsidiary
of Sound  Federal,  MHC (the  "Mutual  Holding  Company").  Collectively,  Sound
Federal Bancorp and the Bank are referred to herein as "the Company".

     Sound  Federal  Bancorp  issued a total of  5,212,218  shares of its common
stock in the  Reorganization  and Offering,  consisting of 2,810,510  shares (or
53.92%) issued to the Mutual Holding  Company,  102,200 shares (or 1.96%) issued
to the Sound Federal  Savings and Loan  Association  Charitable  Foundation  and
2,299,508  shares (or  44.12%)  issued to other  stockholders.  After  deducting
offering  costs of $1.1  million,  the net cash  proceeds from the Offering were
$20.0 million.

     On June 13, 2002, the Mutual Holding Company adopted a plan to convert to a
capital stock corporation. Upon conversion, shares of the Company's common stock
held by the public will be exchanged  for shares of a Delaware  holding  company
which will become the Bank's parent company. In addition, shares of the Delaware
holding  company will be offered for sale to the Bank's  depositors  and certain
borrowers in a subscription  offering. The shares to be sold in the subscription
offering  represent the ownership  interest of the Mutual Holding  Company.  The
conversion and offering will result in additional capital and an increase in the
number of shares outstanding.

2.       Basis of Presentation

     The consolidated financial statements included herein have been prepared by
the  Company  without  audit.  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 periods  presented.  Certain  information  and
footnote disclosures normally included in accordance with accounting  principles
generally  accepted  in the United  States of  America  have been  condensed  or
omitted  pursuant to the rules and  regulations  of the  Securities and Exchange
Commission;  however,  the Company believes that the disclosures are adequate to
make the  information  presented not misleading.  The operating  results for the
periods  presented are not necessarily  indicative of results to be expected for
any other interim period or for the entire fiscal year ending March 31, 2003.

     The consolidated financial statements have been prepared in conformity with
accounting  principles  generally  accepted in the United States of America.  In
preparing the consolidated financial statements,  management is required to make
estimates  and  assumptions   that  affect  the  reported   amounts  of  assets,
liabilities,  income and expense. Actual results could differ significantly from
these  estimates.  A  material  estimate  that is  particularly  susceptible  to
near-term change is the allowance for loan losses, which is discussed in Note 4.

     The unaudited interim  consolidated  financial  statements presented herein
should be read in  conjunction  with the annual audited  consolidated  financial
statements of the Company for the fiscal year ended March 31, 2002,  included in
the Company's 2002 Annual Report.

                                       -5-
<Page>

3.       Earnings Per Share

     Weighted  average  common  shares  used in  calculating  basic and  diluted
earnings per share  ("EPS") for the three months ended  September  30, 2002 were
4,659,180 and 4,769,165, respectively. For the quarter ended September 30, 2001,
weighted  average common shares used in  calculating  basic and diluted EPS were
4,613,294 and 4,670,645,  respectively.

     For the six months ended  September 30, 2002,  weighted  average shares for
calculating  basic and diluted  earnings per share were 4,658,360 and 4,761,360;
for the six months ended  September  30, 2001 the  respective  weighted  average
shares were 4,627,392 and 4,672,320.

     Diluted EPS reflects  incremental shares for stock options and unvested RRP
shares, computed using the treasury stock method.

4.       Allowance for Loan Losses

     The allowance  for loan losses is increased by  provisions  for loan losses
charged to income and by  recoveries of prior  charge-offs,  and is decreased by
charge-offs. Losses are charged to the allowance when all or a portion of a loan
is deemed to be  uncollectible.  Recoveries of loans previously  charged-off are
credited to the allowance for loan losses when realized.  Management's  periodic
determination of the allowance is based on continuing  reviews of the portfolio,
using a consistently-applied methodology. The allowance for loan losses consists
of losses that are both  probable  and  estimable  at the date of the  financial
statements.  In determining the allowance for loan losses,  management considers
factors  such as the  Company's  past loan loss  experience,  known risks in the
portfolio,  adverse  situations  affecting a  borrower's  ability to repay,  the
estimated value of underlying collateral, and current economic conditions.

     Determining the allowance for loan losses involves  significant  management
judgments utilizing the best information available.  Those judgments are subject
to further  review by  various  sources,  including  the  Company's  regulators.
Changes in the  allowance  may be  necessary  in the future  based on changes in
economic and real estate market conditions,  new information  obtained regarding
known problem loans, the  identification  of additional  problem loans and other
factors, certain of which are outside of management's control.

     Activity in the  allowance  for loan losses for the  periods  indicated  is
summarized as follows:

<TABLE>
<CAPTION>

                                             Three Months Ended               Six Months Ended              Year Ended
                                                 September 30,                 September 30,                March 31,
                                       -------------   -------------   -------------  ------------          ---------
                                            2002            2001            2002           2001               2002
                                       -------------   -------------   -------------  ------------          ---------
                                                                       (in thousands)
<S>                                    <C>             <C>             <C>            <C>              <C>
Balance at beginning of period....     $     2,296     $     2,072     $     2,221    $     2,047      $         2,047
Provision for loan losses.........              50              25             125             50                  175
Charge-offs.......................              --              --              --             --                  (15)
Recoveries........................              --              --              --             --                   14
                                         ---------       ---------       ---------      ---------           ----------
Balance at end of period..........     $     2,346     $     2,097     $     2,346    $     2,097                2,221
                                         =========       =========       =========      =========           ===========

</TABLE>
                                      -6-
<Page>
5.       Borrowings

     The Company  had the  following  outstanding  borrowings  under  securities
repurchase agreements with the FHLB at September 30, 2002:


                              Coupon
                              ------                               Accrued
   Maturity Date               Rate           Borrowings      Interest Payable
   -------------               ----           ----------      ----------------
                                                   (dollars in thousands)
   January 2008 (1)            5.42%      $       9,928       $       101
   December 2008(2)            4.72               5,000                --
   March 2003                  2.54               7,000                15
   March 2004                  3.57               7,000                21
   March 2005                  4.22               6,000                21
                                             --------------      -----------
                               4.17%      $      34,928       $       158
                                             ==============      ===========

(1)  Callable  quarterly  beginning  January 2003 (2) Callable  quarterly  since
     November 2001

     The  securities  transferred  to  the  FHLB  subject  to  these  repurchase
agreements include U.S. Government and agency securities available for sale with
a carrying value of $15.5 million and mortgage-backed  securities  available for
sale with a carrying  value of $21.5  million.  Accrued  interest  receivable on
these securities totaled $301,000 at September 30, 2002.

     An  outstanding  FHLB advance of $84,000 is included in  borrowings  in the
consolidated  balance  sheets at  September  30, 2002 and March 31,  2002.  This
advance bears interest at a fixed rate of 8.29% and matures in December 2002.

6.       Comprehensive Income

     Comprehensive  income  represents the sum of net income and items of "other
comprehensive  income  or loss"  that are  reported  directly  in  stockholders'
equity,  such as the change during the period in the  after-tax  net  unrealized
gain or loss on securities available for sale.

     The Company's other comprehensive  income represents net unrealized holding
gains and losses arising during the period on securities available for sale, net
of related income taxes, as follows:

<TABLE>
<CAPTION>

                                                       Three Months Ended              Six Months Ended
                                                           September 30,                   September 30,
                                                 ------------------------------    --------------------------
                                                      2002            2001            2002           2001
                                                 -------------   -------------     -----------   ------------
                                                                        (in thousands)
Net unrealized holding gain arising during
<S>                                               <C>          <C>                 <C>           <C>
 the period on securities available for sale...   $    580     $       901         $   1,603     $       661
Related deferred income tax effect.............       (224)           (342)             (620)           (251)
                                                  ----------   -------------       -----------   -------------
Other comprehensive income.....................   $    356     $       559         $     983     $       410
                                                  ==========   =============       ===========   =============

</TABLE>
                                       -7-
<Page>

     The Company's  accumulated other comprehensive income, which is included in
stockholders' equity, is summarized as follows:

<TABLE>
<CAPTION>

                                                                          September 30,          March 31,
                                                                              2002                2002
                                                                          ------------        --------------
                                                                                     (In thousands)

<S>                                                                        <C>                  <C>
  Net unrealized holding gain on securities available for sale......       $  3,565             $   1,962
  Additional minimum pension liability..............................           (170)                 (170)
  Related deferred income taxes......................                        (1,311)                 (691)
                                                                          -----------           -----------
    Accumulated other comprehensive income......................          $   2,084             $   1,101
                                                                          ===========           ===========
</TABLE>


Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

General

     The Company's  results of operations depend primarily upon its net interest
income,  which is the  difference  between  income  earned  on  interest-earning
assets, such as loans and securities, and the interest expense paid on deposits.
The Company's  operations  are affected to a much lesser degree by  non-interest
income,  such as banking  service  charges and fees. Net income is also affected
by, among other things,  provisions for loan losses and  non-interest  expenses.
The Company's  principal operating  expenses,  aside from interest expense,  are
compensation  and benefits,  occupancy and equipment,  data  processing  service
fees,  advertising  and  promotion  and  other  expenses  such as ATM  expenses,
professional  fees and insurance  premiums.  The Company's results of operations
also are affected significantly by general economic and competitive  conditions,
particularly  changes  in market  interest  rates,  government  legislation  and
policies affecting fiscal affairs, housing and financial institutions,  monetary
policies  of the Federal  Reserve  System,  and the  actions of bank  regulatory
authorities.

     When used in this report on Form 10-Q,  the words or phrases  "will  likely
result," "are  expected  to," "will  continue,"  "is  anticipated,"  "estimate,"
"project"  or similar  expressions  are  intended to  identify  "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995.  Such  statements are subject to certain risks and  uncertainties  that
could cause actual  results to differ  materially  from  historical  results and
those  presently  anticipated  or  projected.  Among  others,  these  risks  and
uncertainties  include  changes in economic  conditions in the Company's  market
area,  changes in  policies by  regulatory  agencies,  fluctuations  in interest
rates,  demand  for loans in the  Company's  market  area and  competition.  The
Company  wishes to  caution  readers  not to place  undue  reliance  on any such
forward-looking  statements,  which speak only as of the date made.  The Company
wishes  to advise  readers  that the  factors  listed  above  could  affect  the
Company's financial performance and could cause the Company's actual results for
future periods to differ  materially from its  forward-looking  statements.  The
Company  does not  undertake,  and  specifically  declines  any  obligation,  to
publicly  release  the  result  of  any  revisions  which  may  be  made  to any
forward-looking  statements to reflect events or circumstances after the date of
such  statements or to reflect the occurrence of  anticipated  or  unanticipated
events.
                                      -8-
<page>

Recent Developments

     On June 13 2002, the Mutual Holding  Company adopted a plan to convert to a
capital stock corporation. Upon conversion, shares of the Company's common stock
held by the public will be exchanged  for shares of a Delaware  holding  company
which will become the Bank's parent company. In addition, shares of the Delaware
holding  company will be offered for sale to the Bank's  depositors  and certain
borrowers in a subscription  offering. The shares to be sold in the subscription
offering represent the ownership interest of the Mutual Holding Company.

Financial Condition

     Assets.  Assets totaled $672.6 million at September 30, 2002 as compared to
$624.0 million at March 31, 2002. Net loans increased $24.4 million, or 5.8%, to
$442.7  million at September 30, 2002 as compared to $418.4 million at March 31,
2002. The increase in net loans primarily reflects our continued strong level of
loan  originations,  which  totaled  $90.3  million  during the six months ended
September 30, 2002, and which were partially offset by loan principal repayments
of $66.4 million during the period. Securities available for sale increased $8.9
million, or 6.0%, to $159.2 million at September 30, 2002, as compared to $150.2
million  at March 31,  2002.  Federal  funds sold and other  overnight  deposits
increased $13.6 million to $33.4 million during the same period. These increases
were funded principally by a $45.9 million increase in deposits.

     Liabilities.  Deposits  totaled  $565.8  million at September  30, 2002, as
compared to $519.9 million at March 31, 2002.  Certificates of deposit increased
$28.7 million to $341.0 million from $312.3  million,  savings and club accounts
increased  $6.5 million to $125.1  million from $118.6  million and money market
accounts increased $2.6 million to $38.6 million from $36.0 million.  Borrowings
totaled  $35.0  million at September  30, 2002,  as compared to $34.9 million at
March 31, 2002.  Borrowings at September 30, 2002 consisted of Federal Home Loan
Bank borrowings.

     Stockholders' Equity. Total stockholders' equity increased $5.2 million, or
8.5% to $66.2  million at September  30, 2002,  as compared to $61.0  million at
March 31, 2002. The increase in  stockholders'  equity  reflects $4.2 million in
net income and an  increase  of  $983,000  in  accumulated  other  comprehensive
income,  partially  offset by dividends  paid of $313,000.  Our equity to assets
ratio was 9.84% at September 30, 2002, as compared to 9.78% at March 31, 2002.

Comparison of Results of Operations for the Three Months Ended
 September 30, 2002 and 2001

     Net Income.  Net income  amounted to $2.0  million or diluted  earnings per
share of $0.43 for the quarter  ended  September  30, 2002,  as compared to $1.4
million or diluted  earnings per share of $0.29 for the quarter ended  September
30, 2001.  The increase in net income for the current  quarter was due primarily
to an increase  of $1.8  million in net  interest  income,  partially  offset by
increases  of  $788,000  in  non-interest  expense  and  $349,000  in income tax
expense.

                                      -9-
<Page>

     Interest  Income.  Interest  income totaled $9.8 million during the quarter
ended September 30, 2002, as compared to $9.5 million for the same period in the
prior year.  This  increase was due to an increase of $105.6  million in average
interest-earning assets to $630.5 million during the quarter ended September 30,
2002,  as  compared to $524.9  million  for the same  quarter in the prior year,
offset  partially  by  a 98  basis  point  decrease  in  the  average  yield  on
interest-earning assets to 6.17% from 7.15%. The increase in the average balance
of  interest-earning  assets  was due  primarily  to  increases  in loans and in
federal funds sold and other overnight deposits,  partially offset by a decrease
in   mortgage-backed   securities.   The  decrease  in  the  average   yield  on
interest-earning  assets  reflects the  origination of fixed-rate  loans and the
repricing  of  our  adjustable-rate   securities  portfolio  during  periods  of
declining  interest rates, and  particularly  during the second half of calendar
2001. In addition,  federal funds sold and other overnight deposits,  which earn
less  interest  than  longer-term  interest-earning  assets,  represent a larger
portion of  interest-earning  assets.  Federal  funds  sold and other  overnight
deposits  represented  6.0% of  interest-earning  assets for the  quarter  ended
September 30, 2002, as compared to 3.8% for the same period in the prior year.

     Loans.  Interest income on loans increased $1.3 million to $7.6 million for
the quarter  ended  September 30, 2002, as compared to $6.3 million for the same
quarter in 2001.  This  increase is due to an increase of $112.3  million in the
average balance of loans to $440.2 million from $327.9 million, partially offset
by a 72 basis point decrease in the yield earned to 6.87% from 7.59%.

     The growth of the loan  portfolio  was  principally  a result of  increased
originations  as  borrowers  sought to take  advantage  of the  lowest  mortgage
interest  rates in 40 years.  The low  market  interest  rates  created a robust
housing market and also  compelled  many  consumers to refinance  their existing
mortgage  loans.  We  originated  $37.7 million of loans during the three months
ended  September 30, 2002.  These loans were  originated at rates lower than the
yields being earned on the existing loan portfolio.  As a result, the decline in
average yield earned on the loan portfolio  continued in the first six months of
fiscal 2003. The yield on the loan  portfolio may decrease  further until market
interest rates begin to increase.

     Mortgage-Backed   Securities.   Interest  on   mortgage-backed   securities
decreased  $771,000 to $1.5 million for the quarter ended September 30, 2002, as
compared to $2.3 million for the quarter ended September 30, 2001. This decrease
was due  primarily  to a decrease  of $23.7  million in the  average  balance to
$105.0  million and a decrease of 132 basis points in the average yield to 5.72%
from 7.04%.  The lower  average  balances in the current year reflect  principal
repayments and prepayments on mortgage-backed securities,  which we used to fund
loan growth.

                                      -10-
<Page>

     Other  Securities.  Interest  on other  securities  decreased  $171,000  to
$494,000  for the quarter  ended  September  30,  2002,  as compared to the same
quarter in 2001, due to a 164 basis point decrease in the average yield to 4.54%
from 6.18%, which has partially offset by an increase of $528,000 in the average
balance to $43.2  million.  The  decrease  in the  average  yield  reflects  the
decrease in market  interest  rates during  fiscal 2002.  Federal Funds Sold and
Other Overnight Deposits.  For the quarter ended September 30, 2002, interest on
Federal funds sold and other overnight  deposits  decreased $60,000 to $127,000,
reflecting  a 226 basis point  decrease in the  average  yield  earned to 1.34%,
partially offset by an increase of $17.1 million in the average balance to $37.6
million.  The  decrease in the average  yield  reflects  the  decrease in market
interest rates during fiscal 2002.

     Interest Expense. Interest expense for the quarter ended September 30, 2002
totaled $3.5 million as compared to $5.0 million for the quarter ended September
30, 2001. The decrease in interest  expense was due to a decrease in the average
cost of  liabilities  to 2.40%  from  4.04%,  resulting  from  declining  market
interest  rates during  fiscal  2002.  The average  balance of  interest-bearing
liabilities  increased  $92.1  million to $584.2  million for the quarter  ended
September 30, 2002 from $492.1 million for the same quarter in the prior year.

     Interest  expense on  certificates  of deposit totaled $2.6 million for the
quarter  ended  September  30,  2002 as  compared  to $4.0  million for the same
quarter in 2001. The decrease was due primarily to a 225 basis point decrease in
the average cost to 3.09% from 5.34%,  offset  partially by an increase of $38.7
million in the average balance of certificates of deposit to $332.3 million from
$293.6  million in the same quarter last year.  The decrease in the average cost
of  certificates  of deposit was the result of the  decrease  in interest  rates
during fiscal 2002.

     Interest on savings  accounts  amounted to $330,000  for the quarter  ended
September 30, 2002, as compared to $455,000 for the quarter ended  September 30,
2001.  The decrease  was the result of a 60 basis point  decrease in the average
cost of savings accounts to 1.05% from 1.65%, offset partially by an increase of
$15.7 million in the average balance of savings accounts to $125.1 million.

     Interest expense on other deposits (NOW and money market accounts) amounted
to $188,000 for the quarter ended September 30, 2002 as compared to $275,000 for
the same quarter in the prior year. The average cost of these accounts decreased
70 basis points, offset partially by an increase of $16.7 million in the average
balance of these accounts.

     For the quarter ended  September 30, 2002,  interest  expense on borrowings
amounted to  $411,000  as  compared  to $257,000 in the prior year.  The average
balance of borrowings for the current  quarter was $35.0 million and the average
cost was 4.66%. For the quarter ended September 30, 2001, the average balance of
borrowings  was  $14.8  million  and the  average  cost was  6.90%.  We used the
increase in Federal Home Loan Bank borrowings to fund loan originations.

     Net Interest  Income.  Net interest  income for the quarter ended September
30, 2002 amounted to $6.3 million,  an increase of $1.8 million,  or 39.2%, from
$4.5  million for the same quarter in the prior year.  The interest  rate spread
was  3.77%  and  3.11%  for the  quarters  ended  September  30,  2002 and 2001,
respectively.  The net  interest  margin for those  periods was 3.94% and 3.40%,
respectively.
                                      -11-
<Page>

     The increases in interest rate spread and net interest  margin are a result
of decreasing  market  interest rates in calendar 2001.  This decrease in market
interest rates has reduced the cost of interest-bearing  liabilities faster than
the rates on  interest-earning  assets such as loans or securities.  However, if
market  interest rates decrease  further,  interest rate spread and net interest
margin may decrease since competitive factors could inhibit our ability to lower
interest rates on deposit accounts any further. Our interest rate spread and net
interest  margin  may also  come  under  pressure  as the full  effect of recent
mortgage  refinancings  is reflected in asset yields.  In addition,  if interest
rates  increase,  the cost of our  interest-bearing  liabilities  will  increase
faster than the rates on our interest-earning  assets, also causing decreases in
our net interest rate spread and net interest margin.

     Provision for Loan Losses.  Management regularly reviews our loan portfolio
and makes  provisions  for loan  losses in  amounts  required  to  maintain  the
allowance  for loan losses in  accordance  with  generally  accepted  accounting
principles.  The  allowance  consists  of  losses  that  are both  probable  and
estimable at the date of the financial statements. The allowance for loan losses
consists of amounts  allocated to specific  nonperforming  loans and to loans in
each major portfolio category. Loan categories such as single-family residential
mortgage loans,  which  represented  90.9% of total loans at September 30, 2002,
are generally  evaluated on an aggregate or "pool" basis. Our allowance for loan
losses is  predominately  determined on a pool basis by applying loss factors to
the current  balances  of the  various  loan  categories.  The loss  factors are
determined  by  management  based  on  an  evaluation  of  our  historical  loss
experience,  delinquency trends,  volume and type of lending conducted,  and the
impact of current economic conditions in our market area.

     The provision  for loan losses was $50,000 for the quarter ended  September
30,  2002 as  compared to $25,000 for the  quarter  ended  September  30,  2001.
Non-performing loans amounted to $876,000,  or 0.20% of total loans at September
30, 2002, as compared to $1.1 million,  or 0.33% of total loans at September 30,
2001. The allowance for loan losses amounted to $2.3 million,  or 0.53% of total
loans at September 30, 2002 and $2.2  million,  or 0.53% of total loans at March
31, 2002.  There were no charge-offs  for the quarters ended  September 30, 2002
and 2001.  The increase in the provision for loan losses  reflects our continued
substantial  origination of adjustable-rate  mortgage loans in the portfolio and
overall  portfolio  growth.  Adjustable  rate mortgage loans can involve greater
credit  risk than fixed  rate loans  because as  interest  rates  increase,  the
underlying  payments  by the  borrower  increase,  thus  increasing  the risk of
default by the borrower.  At the same time, the  marketability of the underlying
collateral may be adversely  affected by higher interest rates. At September 30,
2002,  adjustable  rate loans  accounted for 17.8% of total loans as compared to
15.0% at March 31, 2002 and 6.0% at September 30, 2001.

     Non-Interest  Income.  Non-interest income consists  principally of service
charges on deposit  accounts,  fees earned on the sale of  investment  products,
late  charges on loans and  various  other  service  fees.  Non-interest  income
totaled  $224,000 and $169,000 for the  quarters  ended  September  30, 2002 and
2001,  respectively  and included  service fees of $211,000 and $169,000 for the
same  respective  quarters.  Service  fees  include  fees of $67,000 and $34,000
generated by Mamaroneck  Advisors,  Inc. during the quarters ended September 30,
2002  and  2001,   respectively.   Mamaroneck  Advisors,  Inc.  is  our  service
corporation that sells investment and insurance products.

     Non-Interest  Expense.  Non-interest  expense  totaled $3.2 million for the
quarter  ended  September  30, 2002, as compared to $2.4 million for the quarter
ended  September  30,  2001.  This  increase  was due  primarily to increases of
$372,000 in compensation expense,  $125,000 in advertising and promotion expense
and  $235,000 in other  non-interest  expense.  The  increases  in  non-interest
expense were due primarily to operating expenses for the New Rochelle and Somers
branches,  which were opened in December  2001 and July 2002,  respectively,  as
well as internal growth to support lending and branch operations.

     Income Taxes.  Income tax expense amounted to $1.2 million and $854,000 for
the quarters ended September 30, 2002 and 2001, respectively.  The effective tax
rates for those same periods were 37.2% and 38.4%, respectively.
                                      -12-
<Page>

Comparison of Results of Operations for the Six Months Ended
September 30, 2002 and 2001

     Net Income.  Net income  amounted to $4.2  million or diluted  earnings per
share of $0.88 for the six months ended  September 30, 2002, as compared to $2.5
million or diluted  earnings per share of $0.55 for the same period in the prior
year. The increase in net income for the six months ended September 30, 2002 was
due to an increase of $4.0 million in net interest  income,  partially offset by
an  increase  of $1.3  million in  non-interest  expense and an increase of $1.0
million in income tax expense.

     Interest  Income.  Interest income totaled $19.6 million for the six months
ended  September  30, 2002,  as compared to $18.8 million for the same period in
the prior year.  The increase in interest  income  reflects an increase of $95.5
million in average  interest-earning  assets to $616.4  million as  compared  to
$520.9 million for the same period in the prior year,  partially offset by an 87
basis point  decrease in the average yield on  interest-earning  assets to 6.34%
from 7.21%. The increase in the average balance of  interest-earning  assets was
due  primarily  to  increases  in loans  and in  federal  funds  sold and  other
overnight   deposits,   partially  offset  by  a  decrease  in   mortgage-backed
securities.  The  decrease  in the  average  yield  on  interest-earning  assets
reflects  the  origination  of  fixed-rate   loans  and  the  repricing  of  our
adjustable-rate securities portfolio during periods of declining interest rates,
and particularly  during the second half of calendar 2001. In addition,  federal
funds  sold  and  other  overnight  deposits,  which  earn  less  interest  than
longer-term   interest-earning   assets,   represent   a   larger   portion   of
interest-earning  assets.  Federal  funds  sold  and  other  overnight  deposits
represented 5.4% of  interest-earning  assets for the six months ended September
30, 2002, as compared to 4.5% for the same period in the prior year.

     Loans.  For the six months ended  September  30, 2002,  interest  income on
loans amounted to $15.2 million as compared to $12.1 million for the same period
in the prior year. This increase was due to an increase of $114.3 million in the
average  balance of loans  partially  offset by a 54 basis point decrease in the
yield earned to 7.01% from 7.55%.

     The growth of the loan  portfolio  was  principally  a result of  increased
originations,  discussed  above. We originated $90.3 million of loans during the
six months ended September 30, 2002.  These loans were originated at rates lower
than the yields being earned on the existing loan  portfolio.  As a result,  the
decline in average yield earned on the loan portfolio continued in the first six
months of fiscal 2003.  The yield on the loan  portfolio  may  decrease  further
until market interest rates begin to increase.

     Mortgage-Backed Securities.  Interest on mortgage-backed securities for the
six months ended  September 30, 2002,  decreased $1.7 million to $3.0 million as
compared to $4.7 million for the same period in the prior year. The decrease was
due to a decrease of $30.8 million in the average  balance to $101.2 million and
a decrease  of 124 basis  points in the average  yield to 5.96% from 7.20%.  The
lower  average  balances in the current year reflect  principal  repayments  and
prepayments on mortgage-backed securities, which we used to fund loan growth.

     Other Securities.  For the six months ended September 30, 2002, interest on
other securities  decreased $309,000 to $1.0 million as compared to $1.3 million
for the same period in the prior year. The decrease was due to a decrease in the
average  yield of 184 basis  points to 4.66% from 6.50%  partially  offset by an
increase  of $2.9  million in the average  balance to $43.7  million for the six
months ended September 30, 2002.

     Federal Funds Sold and Other Overnight  Deposits.  For the six months ended
September  30,  2002,  interest on federal  funds and other  overnight  deposits
decreased  $258,000 to $232,000,  reflecting  a 276 basis point  decrease in the
average yield to 1.39%,  partially  offset by an increase of $9.8 million in the
average balance to $33.3 million. The decrease in the average yield reflects the
decrease in market interest rates during fiscal 2002.

     Interest  Expense.  For the six months ended  September 30, 2002,  interest
expense on interest-bearing  liabilities decreased $3.2 million to $7.1 million,
as compared to $10.3 million for the six months ended  September  30, 2001.  The
decrease  in  interest  expense  was due to a 173 basis  point  decrease  in the
average  cost to 2.45% from  4.18%,  partially  offset by an  increase  of $81.8
million  in the  average  balance  of  interest-bearing  liabilities  to  $573.3
million.
                                      -13-
<Page>

     For  the  six  months  ended  September  30,  2002,   interest  expense  on
certificates of deposit amounted to $5.1 million as compared to $8.2 million for
the same period in the prior  year.  The  decrease  was due to a 244 basis point
decrease  in the  average  cost to 3.14%,  partially  offset by a $32.7  million
increase in the average  balance of certificates of deposit to $326.4 million as
compared to $293.7 million for the same period in the prior year.

     For the six months ended September 30, 2002,  interest on savings  accounts
decreased $326,000 to $640,000 as compared to the same period in the prior year.
The  average  cost of  savings  accounts  decreased  72  basis  points  to 1.05%
partially  offset by an increase in the average  balance of savings  accounts of
$12.9 million to $121.9 million for the same periods.

     For the six months  ended  September  30, 2002,  interest  expense on other
deposits amounted to $403,000 as compared to $554,000 for the same period in the
prior year.  The  average  cost of these  accounts  decreased  65 basis  points,
partially offset by an increase of $15.8 million in the average balance of these
accounts

     For the six months ended September 30, 2002, interest expense on borrowings
was $827,000 as compared to $526,000 for the same period in the prior year.  The
increase  in interest  expense was due to an increase in the average  balance of
borrowings of $20.2 million to $35.0 million,  partially offset by a decrease in
the  average  cost of  borrowings  of 239 basis  points  to  4.72%.  We used the
increase in borrowings to fund loan originations.

     Net Interest  Income.  For the six months  ended  September  30, 2002,  net
interest  income  amounted to $12.6  million as compared to $8.5 million for the
same period in the prior year.  The interest rate spread was 3.89% and 3.03% and
the net  interest  margin was 4.06% and 3.27% for the  respective  periods.  The
increases  in interest  rate spread and net  interest  margin were the result of
decreasing  market  interest  rates in calendar  2001.  This  decrease in market
interest rates has reduced the cost of interest-bearing  liabilities faster than
the rates on interest-earning assets such as loans or securities.

     Provision  for Loan Losses.  The provision for loan losses was $125,000 for
the six months  ended  September  30,  2002 as  compared to $50,000 for the same
period in the prior year.  Non-performing loans amounted to $876,000 or 0.20% of
total loans at September 30, 2002, as compared to $1.1 million or 0.33% of total
loans at September  30, 2001.  The  allowance  for loan losses  amounted to $2.3
million or 0.53% of total loans at September  30, 2002 and $2.2 million or 0.53%
of total  loans at March 31,  2002.  There  were no  charge-offs  during the six
months ended September 30, 2002 and 2001. The increase in the provision for loan
losses  reflects  our  continued  substantial   origination  of  adjustable-rate
mortgage loans and overall portfolio growth.  Adjustable-rate mortgage loans can
involve  greater  credit risk than  fixed-rate  loans because as interest  rates
increase, the underlying payments by the borrower increase,  thus increasing the
risk of default by the  borrower.  At the same time,  the  marketability  of the
underlying  collateral may be adversely  affected by higher  interest  rates. At
September 30, 2002,  adjustable rate loans accounted for 17.8% of total loans as
compared to 15.0% at March 31, 2002 and 6.0% at September 30, 2001.

     Non-Interest Income. Non-interest income for the six months ended September
30, 2002  totaled  $394,000 as  compared  to $365,000  for the six months  ended
September 30, 2001,  and included  service fees of $381,000 and $308,000 for the
respective  periods.  The increase in service fees was due  primarily to fees of
$108,000 and $49,000  from the sale of  investment  products for the  respective
six-month  periods.  Non-interest  income for the six months ended September 30,
2002  included a gain on the sale of real estate owned of $13,000 as compared to
$57,000 for the same period in 2001.
                                      -14-
<Page>

     Non-Interest  Expense.  For  the  six  months  ended  September  30,  2002,
non-interest  expense increased $1.3 million to $6.1 million as compared to $4.8
million for the same period in the prior year.  This  increase was due primarily
to increases of $575,000 in compensation and benefits, $136,000 in occupancy and
equipment expense, $117,000 in advertising and promotion expense and $389,000 in
other  non-interest  expense.  The  increases in  non-interest  expense were due
primarily to operating expenses for the New Rochelle and Somers branches,  which
were opened in December  2001 and July 2002,  respectively,  as well as internal
growth to support lending and branch operations.

     Income  Taxes.  For the six months ended  September  30,  2002,  income tax
expense amounted to $2.6 million and $1.5 million,  respectively.  The effective
tax rates for those same periods were 38.1% and 37.7%, respectively.

Liquidity and Capital Resources

     The  Company's  primary  sources of funds are  deposits,  the proceeds from
principal and interest payments on loans and mortgage-backed securities, and the
proceeds  from  maturities  of  investments.   While  maturities  and  scheduled
amortization of loans and securities are a predictable source of funds,  deposit
flows and mortgage prepayments are greatly influenced by general interest rates,
economic conditions and competition.

     The Company's primary investing  activities are the origination of mortgage
loans, and the purchase of short-term  investments,  government agency bonds and
adjustable  rate  mortgage-backed   securities.   These  activities  are  funded
primarily by deposit growth and principal  repayments on loans,  mortgage-backed
securities and other investment  securities.  For the six months ended September
30, 2002,  the Company  originated  loans  totaling  $90.3 million and purchased
$46.6 million of securities.  These  disbursements  were funded in part by $39.2
million in principal  payments,  maturities  and calls of  securities  and $66.4
million in loan  principal  repayments.  For the year ended March 31, 2002,  the
Company  originated  $220.4  million  of loans and  purchased  $57.7  million of
securities.

     Liquidity  management for the Company is both a daily and long-term process
which is part of the Company's  overall  management  strategy.  Excess funds are
generally  invested  in  short-term   investments  such  as  Federal  funds  and
certificates  of deposit.  In the event that the Bank should require  additional
sources of funds,  it could  borrow from the Federal  Home Loan Bank of New York
under an available line of credit.

     At  September  30,  2002,  the Company  had  outstanding  loan  origination
commitments  of  $67.2  million.  The  Company  anticipates  that it  will  have
sufficient funds available to meet its current loan  commitments.  Time deposits
scheduled to mature in one year or less from September 30, 2002,  totaled $269.3
million.  Management  believes that a significant  portion of such deposits will
remain with the Company.

     The Bank is subject to certain  minimum  leverage,  tangible and risk-based
capital  requirements  established by regulations of the OTS. These  regulations
require savings associations to meet three minimum capital standards: a tangible
capital  ratio  requirement  of 1.5% of total  assets as adjusted  under the OTS
regulations;  a  leverage  ratio  requirement  of 4.0% of core  capital  to such
adjusted  total assets;  and a risk-based  capital ratio  requirement of 8.0% of
core and  supplementary  capital  to total  risk-based  assets.  The OTS  prompt
corrective  action  regulations  impose  a 4.0%  core  capital  requirement  for
categorization  as an  "adequately  capitalized"  thrift and a 5.0% core capital
requirement for categorization as a "well capitalized" thrift. Goodwill and most
other  intangible  assets are  deducted in  determining  regulatory  capital for
purposes of all  capital  ratios.  In  determining  the amount of  risk-weighted
assets for purposes of the risk-based capital requirement, a savings association
must  compute  its  risk-based  assets by  multiplying  its assets  and  certain
off-balance  sheet  items  by  risk-weights,  which  range  from 0% for cash and
obligations  issued by the United States  Government or its agencies to 100% for
consumer and commercial  loans, as assigned by the OTS capital  regulations.  At
September 30, 2002, the Bank exceeded all of the OTS minimum  regulatory capital
requirements,   and  was  classified  as  a  well-capitalized   institution  for
regulatory purposes.
                                      -15-
<Page>

     The  following  table sets  forth the  capital  position  of the Bank as of
September 30, 2002 and March 31, 2002. The actual capital amounts and ratios set
forth below are for the Bank only and,  accordingly,  do not include  additional
capital retained by Sound Federal Bancorp.

<TABLE>
<CAPTION>

                                                                                 OTS Requirements
                                                                 ------------------------------------------------
                                                                    Minimum Capital            Classification as
                                             Bank Actual               Adequacy                 Well Capitalized
                                         ------------------------------------------------------------------------
                                         Amount       Ratio        Amount       Ratio        Amount     Ratio
                                         ------       -----        ------       -----        ------     -----
                                                                 (Dollars in thousands)
September 30, 2002
<S>                                   <C>              <C>        <C>              <C>     <C>          <C>
Tangible capital....................  $   44,254       6.8%       $   9,813        1.5%
Tier I (core) capital...............      44,254       6.8           26,170        4.0     $   32,711      5.0%
Risk-based capital:
   Tier I...........................      44,254      13.2                                     20,192      6.0
   Total............................      46,601      13.9           26,923        8.0         33,653     10.0

March 31, 2002
Tangible capital....................  $   39,865       6.5%       $   9,139        1.5%
Tier I (core) capital...............      39,865       6.5           24,371        4.0     $   30,464      5.0%
Risk-based capital:
   Tier I...........................      39,865       12.7                                    18,776      6.0
   Total............................      42,087       13.5          25,035        8.0         31,294     10.0
</TABLE>


Impact of Recent Accounting Pronouncements

     SFAS No. 143,  "Accounting for Asset Retirement  Obligations," is effective
for financial  statements issued for fiscal years beginning after June 15, 2002.
SFAS No. 143  addresses  financial  accounting  and  reporting  for  obligations
associated with the retirement of tangible  long-lived assets and the associated
asset  retirement  costs.  Management  does not expect that the adoption of this
pronouncement will impact our results of operations or financial condition.

     In  August  2001,  the  FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment  or Disposal of  Long-Lived  Assets."  SFAS No. 144 is effective  for
financial  statements issued for fiscal years beginning after December 15, 2001.
The standard addresses financial  accounting and reporting for the impairment or
disposal of long-lived assets. The adoption of this pronouncement did not affect
our results of operations or financial condition.

     SFAS No. 145,  "Rescission of FASB Statements No. 4, 44, and 64,  Amendment
of FASB Statement No. 13, and Technical  Corrections," was issued in April 2002.
Among other things, the standard changes the income statement  classification of
gains and losses from early extinguishments of debts. Management does not expect
that the  provisions of this  statement will impact our results of operations or
financial condition.
                                      -16-
<Page>

     SFAS No.  146,  "Accounting  for Costs  Associated  with  Exit or  Disposal
Activities," was issued in June 2002 and requires that a liability be recognized
for  these  costs  only  when  incurred,   while  existing  practice  calls  for
recognition  of a  liability  when  an  entity  commits  to an exit  plan.  This
statement is effective for exit or disposal activities  initiated after December
31, 2002 and is not  expected to impact our results of  operations  or financial
condition.

     SFAS No, 147, "Acquisitions of Certain Financial  Institutions," was issued
in October 2002 and  eliminates  the  requirement  to amortize an excess of fair
value of liabilities  assumed over the fair value of assets  acquired in certain
acquisitions of financial institutions. SFAS No. 147 also amends SFAS No. 144 to
include  in its  scope  long-term  customer  relationship  intangible  assets of
financial  institutions.  Management does not expect that the provisions of SFAS
No. 147 will impact our results of operations or financial condition.

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. The Company's assets consist primarily of fixed rate mortgage
loans, which have longer maturities than the Company's liabilities which consist
primarily  of  deposits.  The  Company's  mortgage  loan  portfolio,  consisting
primarily of loans secured by residential  real property  located in Westchester
County,  New York and Fairfield  County,  Connecticut,  is also subject to risks
associated with the local economy.  The Company does not own any trading assets.
At September  30,  2002,  the Company did not have any hedging  transactions  in
place,  such as interest rate swaps and caps.  The Company's  interest rate risk
management  program focuses primarily on evaluating and managing the composition
of the Company's  assets and liabilities in the context of various interest rate
scenarios.  Factors beyond management's  control,  such as market interest rates
and competition, also have an impact on interest income and interest expense.

     During the quarter  ended  September  30, 2002,  there were no  significant
changes in the Company's assessment of market risk.

Item 4.  Controls and Procedures

     The Company's  management,  including the Chief Executive Officer and Chief
Financial  Officer,  evaluated the  effectiveness of the design and operation of
the Company's  disclosure  controls and procedures (as defined in Rule 13a-14(c)
under the Securities  Exchange Act of 1934, as amended) (the "Exchange  Act") as
of a date (the  "Evaluation  Date")  within 90 days prior to the filing  date of
this report. Based upon that evaluation, the Company's management, including the
Chief Executive Officer and Chief Financial  Officer,  concluded that, as of the
Evaluation Date, the Company's disclosure controls and procedures were effective
in timely alerting them to any material  information relating to the Company and
its subsidiaries required to be included in the Company's Exchange Act filings.

     There were no significant  changes made in the Company's  internal controls
or in other factors that that could significantly affect these internal controls
subsequent  to the  date of the  evaluation  performed  by the  Company's  Chief
Executive Officer and Chief Financial Officer.

                                      -17-
<PAGE>

Part II--OTHER INFORMATION

Item 1.  Legal Proceedings

     The Company is not  involved in any pending  legal  proceedings  other than
routine legal  proceedings  occurring in the ordinary  course of business.  Such
routine  legal  proceedings  in the  aggregate  are believed by management to be
immaterial to the Company's financial condition and results of operations.

Item 2.  Changes in Securities and Use of Proceeds

         None

Item 3.  Defaults upon Senior Securities

         None

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

     The Company held its Annual Meeting of  Stockholders on August 8, 2002. The
purpose of the meeting was the  election of three  directors  of the Company and
the  ratification of the appointment of KPMG LLP as auditors for the Company for
the fiscal year ending March 31, 2003. The results of the votes were as follows:

Proposal 1 - Election of Directors

                                       For              Withheld
                                   -------------------------------------
        Bruno J. Gioffre            4,433,296            33,925
        James  Staudt               4,464,896             2,325
        Richard P. McStravick       4,463,381             3,840

Proposal 2 - Ratification of Appointment of KPMG LLP

              For                    Against                     Abstain
       ------------------      ----------------------        -----------------
           4,428,916                 30,799                       7,506

Item 5.  Other Information

         None


Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibit 99.1 - Certification of Chief Executive Officer and Chief Financial
     Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)  Reports on Form 8-K

     None

                                      -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.



                                          Sound Federal Bancorp
                                          (Registrant)

                                  By:      /s/ Anthony J. Fabiano
                                         ---------------------------------------
                                          Anthony J. Fabiano
                                          Duly Authorized and Chief Financial
                                           and Accounting Officer


November 14, 2002

                                      -19-

<PAGE>


                    Certification of Chief Executive Officer
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


     I, Richard P. McStravick,  President and Chief Executive  Officer,  certify
that:

(1)  I have  reviewed  this  quarterly  report  on Form  10-Q of  Sound  Federal
     Bancorp;

(2)  Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

(3)  Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

(4)  The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the  registrant  and have:  a)
     designed such  disclosure  controls and  procedures to ensure that material
     information   relating  to  the  registrant,   including  its  consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the period in which  this  quarterly  report is being
     prepared;  b) evaluated the  effectiveness of the  registrant's  disclosure
     controls  and  procedures  as of a date  within 90 days prior to the filing
     date of this quarterly report (the "Evaluation  Date"); and c) presented in
     this  quarterly  report  our  conclusions  about the  effectiveness  of the
     disclosure  controls  and  procedures  based  on our  evaluation  as of the
     Evaluation Date; (5) The registrant's other certifying  officers and I have
     disclosed,  based  on our  most  recent  evaluation,  to  the  registrant's
     auditors and the audit  committee of  registrant's  board of directors  (or
     persons performing the equivalent functions):

a)   all  significant  deficiencies  in the  design  or  operation  of  internal
     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize and report  financial data and have  identified for the
     registrant's auditors any material weaknesses in internal controls; and

b)   any fraud,  whether or not  material,  that  involves  management  or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls; and

(6)  The  registrant's  other  certifying  officers and I have indicated in this
     quarterly  report  whether  there  were  significant  changes  in  internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

November 14, 2002                         /s/ Richard P. McStravick
---------------------                     -----------------------------------
Date                                      Richard P. McStravick
                                          President and Chief Executive Officer
                                      -20-
<Page>



                    Certification of Chief Financial Officer
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


     I, Anthony J. Fabiano,  Senior Vice President and Chief Financial  Officer,
certify that:

(1)  I have  reviewed  this  quarterly  report  on Form  10-Q of  Sound  Federal
     Bancorp;

(2)  Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

(3)  Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

(4)  The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a)   designed such  disclosure  controls and  procedures to ensure that material
     information   relating  to  the  registrant,   including  its  consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the  period  in which  this  annual  report  is being
     prepared;

b)   evaluated the  effectiveness  of the registrant's  disclosure  controls and
     procedures  as of a date  within 90 days prior to the  filing  date of this
     quarterly report (the "Evaluation Date"); and

c)   presented in this quarterly report our conclusions  about the effectiveness
     of the disclosure controls and procedures based on our evaluation as of the
     Evaluation Date;

(5)  The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent functions):

a)   all  significant  deficiencies  in the  design  or  operation  of  internal
     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize and report  financial data and have  identified for the
     registrant's auditors any material weaknesses in internal controls; and

b)   any fraud,  whether or not  material,  that  involves  management  or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls; and

(6)  The  registrant's  other  certifying  officers and I have indicated in this
     quarterly  report  whether  there  were  significant  changes  in  internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

November 14, 2002                            /s/ Anthony J. Fabiano
---------------------                        -----------------------------------
Date                                         Anthony J. Fabiano
                                             Senior Vice President and
                                               Chief Financial Officer
                                      -21-
<Page>



                                                                   Exhibit 99.1

                            Certification pursuant to
                             18 U.S.C. Section 1350,
                             as adopted pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002



     Richard P. McStravick,  President and Chief Executive Officer,  and Anthony
J. Fabiano,  Senior Vice President and Chief Financial  Officer of Sound Federal
Bancorp  (the  "Company"),  each  certify in his  capacity  as an officer of the
Company that he has reviewed  the  Quarterly  Report of the Company on Form 10-Q
for the quarter ended September 30, 2002 and that to the best of his knowledge:

(1)  the report fully  complies with the  requirements  of Sections 13(a) of the
     Securities Exchange Act of 1934; and

(2)  the information  contained in the report fairly  presents,  in all material
     respects, the financial condition and results of operations of the Company.

     The purpose of this  statement  is solely to comply with Title 18,  Chapter
63, Section 1350 of the United States Code, as amended by Section 906 of the
Sarbanes-Oxley Act of 2002.




November 14, 2002                         /s/ Rochard P. McStravick
---------------------                      -----------------------------------
Date                                       Ricahrd P. McStravick
                                           President and Chief Executive Officer

November 14, 2002                          /s/ Anthony J. Fabiano
---------------------                      -----------------------------------
Date                                       Anthony J. Fabiano
                                           Senior Vice President and
                                             Chief Financial Officer