<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>4
<FILENAME>c_annrpt602.txt
<DESCRIPTION>ANNUAL REPORT 6-30-02
<TEXT>
                       2002 ANNUAL REPORT TO SHAREHOLDERS
                           GREENE COUNTY BANCORP, INC.

(Cover page)
                 A BANK WITH HEART, ON A STREET FULL OF PROMISE


ABOUT OUR COMPANY
Greene County Bancorp, Inc. is the parent company of The Bank of Greene County.
The Company's consolidated assets as of June 30, 2002 were $220.2 million.

The  Bank  of  Greene  County  was  founded  in 1889 as The  Building  and  Loan
Association of Catskill. In 1974, the Bank changed to a New York State chartered
mutual  savings bank,  under the name Greene County  Savings Bank. In 1998,  the
Bank  converted to the mutual holding  company form of ownership,  with the Bank
changing its name to The Bank of Greene County.

The Bank serves Greene  County,  New York through an  operations  center and six
banking offices in Catskill,  Cairo, Coxsackie,  Greenville,  Tannersville,  and
Westerlo.  As part of its mission the Bank tries to foster a sense of  community
through personal service, local decision-making and participation with customers
in community activities.

We believe in Main Street, and what is says about our  community's  ambition and
creativity. Each occupied storefront is a testament to hard work and commitment.
Every vacant space represents a new opportunity, just waiting to be recognized.

So when the Heart of Catskill  Association  launched a campaign designed to spur
investment  in this  historic  street,  the Bank of Greene  County  pledged $2.0
million  in  low-interest  loans  to help  sweeten  the pot.  The  loan  program
complements  an  advertising  campaign  aimed at attracting  entrepreneurs  from
downstate.

This  grassroots  movement  is being led by local  people like  developer  Frank
Cuthbert,  who has personally  helped  revitalize over a dozen buildings on Main
Street,  and  Linda  Overbaugh,  executive  director  of the  Heart of  Catskill
Association  Inc.  Their work  embodies  a  community  spirit  that can be found
throughout our primary  market area of Greene  County.  And we're proud to share
that spirit.

Whether awarding grants to public interest organizations, sponsoring free public
concerts  or  leading  local  efforts  to raise  money for the  victims of 9/11,
maintaining a deep involvement with the community has always been a central part
of our  business  philosophy.  It's  banking  with heart,  but it's also banking
smart. Because the prosperity of our community ultimately rests with the promise
of the people and places we serve.



<PAGE>


To Our Shareholders:

In last year's message to our  shareholders I stated that that we were beginning
to reap the benefits of our investment in people, new branches, and new products
and  technology.  The increased costs of opening  branches in  Tannersville  and
Westerlo, and the implementation of Internet banking and VISA check cards, had a
significant  impact on earnings  during  fiscal  year 2001.  During the last two
quarters of fiscal 2001, however, earnings began to improve as these investments
began to bear fruit. We expected to continue the recent earnings  improvement in
the following year.

I am happy to report that the results for the year ended June 30, 2002 more than
met our  expectations.  Net income  for the year  ended  June 30,  2002 was $1.7
million,  a $0.7  million or 70% increase  over the prior  year's $1.0  million.
Interest  income  increased  $1.0 million or 8.7% to $12.5  million for the year
ended June 30, 2002, from $11.5 million in the prior year.  Interest expense for
the year ended June 30, 2002 was $4.9 million as compared to $5.4 million during
the 2001 fiscal year, a $0.5 million or 9.3% decrease.

Net  interest  margin  increased  to 4.00% for fiscal year 2002,  as compared to
3.76% for the prior fiscal year.  Net interest  spread was 3.78% for fiscal year
2002,  as  compared  to 3.45% for  fiscal  year 2001.  Spread  and  margin  were
positively  affected by the continued  national economic weakness and the Bank's
ability to continue attracting lower-cost checking and NOW accounts.

Non-interest income jumped to $1.8 million during fiscal 2002, a $0.7 million or
64.0%  increase,   over  the  $1.1  million  during  fiscal  2001.  The  largest
contributor to this increase was our new Overdraft  Protection Program which was
initiated  in October  2001.  Significant  gains were also  realized in merchant
credit  card  processing  fees,  VISA  check  card fees,  and  non-customer  ATM
surcharges.  Non-interest  expense was $7.0 million for fiscal year 2002, a $1.0
million  increase  over the $6.0 million for fiscal year 2002.  Again this year,
much of the increase was volume  related,  as the Bank  continued to  experience
significant  account growth across the board.  This was also the first full year
of  operation  for the  Westerlo  office  which  was  opened in  February  2001.
Increases in salaries,  health benefit  expense and stock  compensation  expense
also contributed to the increase in non-interest expense.

Total assets  increased to $220.2 million at June 30, 2002, an increase of $35.1
million  or 19.0%  over  total  assets of $185.1  million a year ago.  The large
increase in assets was primarily due to increases in loans and investments.  The
growth in assets was  primarily  funded by a large  increase in  deposits  and a
lesser increase in borrowed funds.

Total deposits  increased to $183.7 million at June 30, 2002, a $29.5 million or
19.1%  increase  over the  $154.2  million at June 30,  2001.  With all types of
deposit  accounts  showing  healthy  increases,  the largest  gains were seen in
lower-cost  savings  and  transaction  accounts.  Part  of the  increase  may be
attributable  to the downturn in the stock  market,  which may have  resulted in
some investors seeking a safe haven during this period of economic  uncertainty.
We continue  to feature the  advantages  of our full line of  reasonably  priced
transaction accounts for individuals and businesses.  At June 30, 2002, checking
and NOW  accounts  had grown to 20.0% of all bank  deposits,  up from 19.3% last
year and 16.0% two years ago.

Our  two  newest  branch   offices,   Tannersville-opened   in  June  2000,  and
Westerlo-opened  in February 2001,  came into their own during the past year. At
June 30, 2002,  deposits at these  branches were $12.9 million and $6.3 million,
respectively, and both branches are now contributing to the bottom line.

Net loans and mortgages totaled $128.4 million at fiscal year end 2002, an $18.6
million or 16.9%  increase  over the  previous  fiscal  year end total of $109.8
million.  This is the second year in a row of  significant  gains in our lending
department, following a $12.0 million or 12.3% gain during fiscal year 2001. Our
reputation in our market area for prompt,  friendly,  and knowledgeable  service
resulted in our bank being the No. 1 lender in Greene  County,  in terms of both
the number of loans and  dollar  amount,  for  calendar  year  2001.  The entire
lending  staff has worked very hard and  maintained  a high  standard of service
during this extended period of unprecedented growth.

Our tax-free lending program for municipalities  and fire departments  continues
to grow,  with several new loans and bonds  originated  during the past year. At
fiscal year end 2002,  $2.7 million in locally  originated  municipal  loans and
bonds were included in our loan and investment balances. While the above lending
numbers certainly speak for themselves, they do not tell the whole story.

During  the past few years  there  has been a  positive  change in the  economic
climate in the Village of  Catskill,  as there has been  throughout  the County.
Several  Main Street  properties  have  changed  hands and new  businesses  have
opened.

The  Heart  of  Catskill   Association,   the  local   business  and   community
organization,  has  developed a marketing  strategy to  advertise  the  business
advantages of our community to the  metropolitan New York area. Their goal is to
fill all of the  remaining  empty  storefronts  on  Catskill's  Main Street.  In
conjunction  with their  marketing  initiative,  the Bank  announced that it has
allocated up to $2.0 million in financing, at its residential interest rate, for
the purchase and renovation of Main Street commercial  property.  Soon after the
announcement  was  made  in the  local  newspaper  in  late  June,  we  received
applications  for  two  purchases  and one  renovation.  We  anticipate  further
inquiries after the marketing campaign begins in late August in several New York
City publications.

Merchant  credit card  processing  continued  to expand,  with $25.5  million in
credit card sales processed during the 2002 fiscal year, a $4.3 million or 20.2%
gain over the prior fiscal year's $21.2 million.  Our merchant base continues to
grow and we have  recently  expanded our sales force to meet the demand for this
service.

VISA  check  card  volume  grew  substantially  during  the  past  year  and now
represents a large part of transaction  account volume.  More and more customers
are also taking  advantage of  direct-deposit  of their payroll checks.  Several
area   employers  are  using  the  Bank's   Magicwrighter   software  for  their
direct-deposit payroll processing.

Much of the growth in our  transaction  accounts is  attributable to the product
line being offered.  Our totally-free  checking account,  first offered in April
2000,  continues to draw large numbers of new customers.  Equally attractive are
the  low-minimum-balance   checking  and  NOW  accounts  and  business  checking
accounts.  All  accounts  are  eligible  to apply for our  Overdraft  Protection
Program.  This feature  permits the Bank, at its  discretion,  to cover customer
overdrafts,  with the customer  making a deposit upon receiving  notification of
the overdraft from the Bank. We have received many  favorable  comments from our
customers since its introduction in October 2001.

In addition to this new  program,  we have  continued  to make a wide variety of
services  available to our customers,  including the VISA check card,  telephone
and Internet banking, direct deposit capabilities, check-imaged bank statements,
and  recently,   CD-ROM  bank  statements  for  our  commercial  customers.  Our
commitment to providing  customers  with new products that are convenient and of
high  quality has  contributed  not only to an increase  in  deposits,  but more
importantly,  an  increase  in  market  share.  We now have a major  direct-mail
campaign  underway  to further  increase  our  transaction  account  penetration
throughout our market area.

Despite the weakness in the stock market,  our  affiliation  with Fenimore Asset
Management in Cobleskill,  New York continues to flourish.  Their reputation for
conservative  and  value-oriented  investing has proved to be popular,  in these
uncertain  times,  with many of the Bank's  customers.  Fenimore  offers private
client portfolio management as well as two mutual funds (The FAM Funds).

Last year I reported to you that we had re-negotiated,  with our current vendor,
our outsourcing contract for on-line data processing. Subsequent to our contract
renewal,  the data company was purchased by another data processing firm. We are
currently  exploring our options in this regard,  including the  possibility  of
bringing the data  processing  operation  in-house.  In the coming year, we also
intend to focus on all of our non-operating expenses in an effort to improve the
Bank's efficiency ratio.


Of  direct  interest  to our  shareholders  has been the  increase  in  dividend
payouts.  During the  fiscal  year ended June 30,  2001,  the  Company  paid two
semi-annual  dividends of $0.12 each. Due to its conversion to a federal charter
late in the 2001 fiscal year,  our Mutual  Holding  Company was allowed to waive
receipt of its share of future dividends. This fact, together with the increased
level of earnings,  resulted in  semi-annual  dividends of $0.25 and $0.28 being
paid during fiscal year 2002 to the minority shareholders. The first dividend of
fiscal year 2003 was paid on September 1, 2002 to  shareholders  of record as of
August 15, 2002 in the amount of $0.32 per share.

Our  Charitable   Foundation,   established  in  1998  as  part  of  the  Bank's
mutual-to-stock conversion, made 19 grants totaling $26,500 to a wide variety of
non-profit  organizations in Greene and southern Albany County during its fiscal
year ended June 30, 2002. During the past three years the Foundation has awarded
44 grants totaling just under $70,000 to organizations  that support culture and
arts, education, health and wellness, social and civic services, and recreation.
At fiscal year end, total unaudited assets of the Foundation were $822,000.

This past summer marked the fourth year that the Bank was the corporate  sponsor
of Music in the  Park.  This  event  provides  a wide  variety  of free  musical
entertainment  every Thursday  evening  between the 4th of July and Labor Day at
Catskill's Dutchmen's Landing on the Hudson River. Several hundred people attend
each week.

Shortly after the Sept. 11th tragedy at the World Trade Center in New York City,
the Heart of Catskill  Association  approached the Bank with the idea of raising
funds for the WTC relief  fund.  The  outcome was that the Bank made a challenge
pledge of  $10,000.  Within a few weeks the  Association  culminated  their fund
drive with a well-attended  all-day concert at Dutchmen's Landing. A final tally
showed that the group had raised more than $25,000 on their own.  When  combined
with the Bank's  check,  the result was more than $35,000  being  donated to the
relief effort.

The Bank was the recipient of several  awards  during the past year.  The Greene
County Economic  Development  Office  presented the Bank with its Greene Diamond
Award for our overall  economic  contribution  to the County.  The Greene County
Legislature  also presented the Bank with its Economic  Development  Recognition
Award for our contribution to the economic health of the County. We received the
Greene County Planning Board's Ellen Rettus Planning  Achievement  Award for the
construction  of our  Tannersville  office,  a unique  timber-frame  constructed
building.  The  Hunter  Foundation  also  honored  the Bank  with an  award  for
construction of the Tannersville office. The Bank was also named business of the
year by the Heart of Catskill Association.

When I began my  banking  career  40  years  ago,  there  were  seven  financial
institutions headquartered in Greene County, with ours being the smallest of the
group.  Over the years,  one by one,  most of these  were  merged  into  larger,
out-of-area  banks.  At the  present  time,  our bank is the  larger of only two
remaining local banks.

We believe  that we have not only  survived,  but  prospered,  during  this time
because  of the way in  which  we  conduct  our  business.  While  we have  seen
significant gains in assets, deposits, lending, and net profit, we do not intend
to rest on our past  accomplishments.  We will continue to focus on our business
strategy  in the coming  year.  As I stated in last year's  message to you,  the
Board of Directors  and the  management of the Bank believe that we can continue
to grow and  flourish  in our market  area by offering  personal,  friendly  and
knowledgeable service, together with quality products that are reasonably priced
and that provide value to the customer.


Sincerely,

/s/J. Bruce Whittaker
President and Chief Executive Officer

<PAGE>







SELECTED FINANCIAL INFORMATION


The selected financial and operational data presented below at and for the years
shown were derived from the audited consolidated  financial statements of Greene
County  Bancorp,  Inc. and should be read in conjunction  with the  consolidated
financial statements presented elsewhere in this Annual Report.


<TABLE>
<caption>


                                                                       As of June 30,

                                                                 2002            2001          2000
<S>                                                            <C>            <C>             <C>
(Dollars In Thousands)
SELECTED FINANCIAL CONDITION DATA:
Total assets                                                  $220,158        $185,105      $167,735
Loans receivable, net                                          128,373         109,757        97,819
U.S. treasury (all available for sale)                             ---           1,005         4,684
U.S. government agencies  (all available for sale)              14,862           1,794         5,190
State and  political subdivisions (all available for             8,811           9,420         9,904
sale)
Mortgage-backed securities (all available for sale)             19,564           8,783         6,000
Asset-backed securities (all available for sale)                   818           3,300         4,916
 Corporate debt securities (all available for sale)             20,760          23,432        12,811
Other investment securities (all available for sale)             1,274           1,141         1,303
Deposits                                                       183,714         154,193       133,460
Shareholders' equity                                           $26,401         $25,094       $23,594

</TABLE>


<TABLE>
<caption>
                                                                   Years Ended June 30,

                                                                 2002            2001           2000
<S>                                                           <C>             <C>            <C>
(Dollars In Thousands)
SELECTED OPERATIONS DATA:
Total interest income                                          $12,550         $11,512        $10,547
Total interest expense                                           4,934           5,448          4,985
Net interest income                                              7,616           6,064          5,562
Provision for loan losses                                          219              60            135
Net interest income after provision for loan losses              7,397           6,004          5,427
Total noninterest income                                         1,840           1,097            851
Total noninterest expense                                        6,984           5,928          4,973
Income before taxes                                              2,253           1,173          1,305
Income tax provision                                               600             216            347
Net income                                                      $1,653            $956           $958


</TABLE>

<PAGE>




SELECTED FINANCIAL RATIOS AND OTHER DATA:


<TABLE>
<caption>
                                                            At and for the Years Ended June 30,

                                                              2002              2001          2000
<S>                                                       <C>                <C>            <C>
PERFORMANCE RATIOS:
Return on average assets                                     0.82%             0.55%         0.60%
   (ratio of net income to average total assets)
Return on average shareholders' equity                       6.46              3.93          4.10
   (ratio of net income to average shareholders' equity)
Ratio of operating expenses to average total assets          3.44              3.44          3.11
Ratio of average interest-earning assets
   to average interest-bearing liabilities                 108.51            109.34        108.61
Net interest rate spread (1)                                 3.78              3.45          3.42
Net interest margin (2)                                      4.00              3.76          3.70
Efficiency ratio (3)                                        73.86             82.78         77.55

ASSET QUALITY RATIOS:
Nonperforming assets to total assets, at end of period       0.16              0.42          0.49
Nonperforming loans to total loans, at end of period         0.26              0.67          0.68
Allowance for loan losses to non-performing loans          321.07            119.18        128.93
Allowance for loan losses to loans receivable, net           0.83              0.81          0.89

CAPITAL RATIOS:
Shareholders' equity to total assets, at end of period      11.99             13.56         14.07
Average shareholders' equity to average assets              12.63             14.10         14.63
Dividend payout ratio4                                      63.10%            50.00%         None
Book value                                                 $13.37            $12.66        $11.94


OTHER DATA:
Number of full-service offices                                6                 6             5





<FN>
1 The difference between the weighted average yield on average  interest-earning
assets and the weighted average cost of average interest-bearing liabilities
2 Net interest  income as a percentage  of average  interest-earning  assets
3 The ratio of noninterest expense divided by the sum of net interest income and
noninterest income
4 The ratio of dividends per share divided by the basic earnings per share
</FN>

</TABLE>
<PAGE>


General

Greene County Bancorp,  Inc. (the "Company") is the bank holding company for The
Bank of Greene  County (the "Bank")  which is a community  based bank offering a
variety of financial  services to meet the needs of the  communities  it serves.
The Company's  principal  business is attracting  deposits from customers within
its market area and investing  those funds  primarily in loans with excess funds
used to invest in  securities.  The Bank  currently  operates  six full  service
branches and an  administration  office in New York's Greene and Southern Albany
counties.  The  Company's  stock is traded on the NASDAQ  Stock Market under the
symbol "GCBC". Greene County Bancorp, MHC, is a mutual holding company that owns
56.9% of the Company's outstanding common stock.

The Company's  results of operations,  like many other  financial  institutions,
depend primarily on its net interest income, which is the difference between the
income earned on the Company's  loan and  securities  portfolios and its cost of
funds,  consisting of the interest paid on deposits and  borrowings.  Results of
operations are also affected by the Company's provision for loan losses,  income
and expense  pertaining to other real estate owned,  gains and losses from sales
of securities,  noninterest income and noninterest  expense.  Noninterest income
consists  primarily  of fees and  service  charges.  The  Company's  noninterest
expense consists  principally of compensation and employee benefits,  occupancy,
equipment  and  data  processing,  and  other  operating  expenses.  Results  of
operations are also  significantly  affected by general economic and competitive
conditions,  changes in  interest  rates,  as well as  government  policies  and
actions of regulatory  authorities.  Additionally,  future changes in applicable
law, regulations or government policies may materially affect the Company.

Management of Credit Risk

Management  considers  credit risk to be an important risk factor  affecting the
financial condition and operating results of the Company. The potential for loss
associated  with this risk factor is managed  through a combination  of policies
approved by the Company's Board of Directors,  the monitoring of compliance with
these policies,  and the periodic reporting and evaluation of loans with problem
characteristics.  Policies relate to the maximum amount that can be granted to a
single borrower and such borrower's related  interests,  the aggregate amount of
loans  outstanding  by type in  relation  to  total  assets  and  capital,  loan
concentrations,  loan-to-collateral  value  ratios,  approval  limits  and other
underwriting criteria.  Policies also exist with respect to the rating of loans,
determination of when loans should be placed in a nonperforming  status, and the
factors that should be considered in  establishing  the Company's  allowance for
loan losses. Management also considers credit risk when evaluating potential and
current holdings of investment  securities.  Credit risk is a critical component
in evaluating corporate debt securities. Typically the Company will not purchase
an  investment  below  Standard & Poor's A- rating and will  consider  selling a
security if it falls into a lower category  while in the  investment  portfolio.
The Company has purchased municipal  securities as part of its strategy based on
the fact such  securities  can offer a higher  tax-equivalent  yield  than other
similar investments.

Management of Interest Rate Risk

While the  Company's  loan  portfolio,  consisting  primarily of mortgage  loans
collateralized  by  residential  real  property  located in its market area,  is
subject  to  risks  associated  with  the  local  economy,  the  Company's  most
significant  form of market risk is  interest  rate risk  because the  Company's
assets and liabilities are sensitive to changes in interest rates. The Company's
assets  consist  primarily  of  residential  mortgage  loans,  which have longer
maturities than the Company's liabilities,  which consist primarily of deposits.
The Company does not engage in any hedging  transactions,  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.

A principal part of the Company's  business  strategy is to manage interest rate
risk and to minimize the Company's exposure to changes in market interest rates.
In recent  years,  the Company has followed the  following  strategies to manage
interest rate risk:

     (i)    maintaining a high level of liquid interest-earning assets such as
            short-term federal funds sold and various investment securities;
     (ii)   maintaining a high concentration of less interest-rate sensitive and
            lower-costing core deposits;
     (iii)  originating consumer installment loans that have up to five year
            terms but that have significantly
            shorter average lives due to early prepayments; and
     (iv)   where possible, matching the funding requirements for fixed-rate
            residential mortgages with lower-costing core deposit accounts.



By  investing  in  liquid  securities,  which can be sold to take  advantage  of
interest rate shifts,  and originating  consumer  installment loans with shorter
average  durations,  the Company  believes it is better  positioned  to react to
changes in market interest rates. Investments in short-term securities, however,
generally  bear lower  yields than  longer-term  investments.  The Company  also
attempts  to  offset   interest  rate  risk  by  investing  in  adjustable  rate
securities,  which will  increase or decrease at periodic  internals  based on a
current  interest  rate.  Thus,  these  strategies may result in lower levels of
interest  income than would be obtained by investing in  longer-term  fixed-rate
loans.

Gap  Analysis.  The  matching  of assets  and  liabilities  may be  analyzed  by
examining the extent to which such assets and  liabilities  are  "interest  rate
sensitive" and by monitoring a company's  interest rate  sensitivity  "gap".  An
asset or liability  is deemed to be interest  rate  sensitive  within a specific
time period if it will mature or reprice  within that time period.  The interest
rate  sensitivity  gap is  defined  as the  difference  between  the  amount  of
interest-earning  assets maturing or repricing within a specific time period and
the amount of  interest-bearing  liabilities  maturing or repricing  within that
same time period. A gap is considered  positive when the amount of interest rate
sensitive  assets exceeds the amount of interest rate sensitive  liabilities.  A
gap  is  considered   negative  when  the  amount  of  interest  rate  sensitive
liabilities  exceeds the amount of interest rate sensitive assets.  Accordingly,
during a period of rising  interest  rates,  an institution  with a negative gap
position  generally  would not be in as favorable a position,  compared  with an
institution  with a  positive  gap,  to invest in higher  yielding  assets.  The
resulting yield on the institution's assets generally would increase at a slower
rate than the increase in its cost of interest-bearing liabilities.  Conversely,
during a period of falling  interest rates,  an institution  with a negative gap
would tend to  experience  a  repricing  of its assets at a slower rate than its
interest-bearing liabilities which, consequently,  would generally result in its
net interest income growing at a faster rate than an institution with a positive
gap position.  At June 30, 2002, the Company's cumulative one-year gap position,
the  difference  between  the  amount of  interest-earning  assets  maturing  or
repricing within one year and interest-bearing liabilities maturing or repricing
within one year, as a percentage of total  interest-earning  assets was negative
9.76%.

Certain shortcomings are inherent in the method of analysis presented in the gap
table that follows.  For example,  although  certain assets and  liabilities may
have similar  maturities  or periods to  repricing,  they may react in different
degrees to changes in market interest rates. Also, the interest rates on certain
types of assets and  liabilities  may  fluctuate in advance of changes in market
interest  rates,  while  interest rates on other types may lag behind changes in
market rates.  Additionally,  certain assets such as adjustable-rate  loans have
features that restrict  changes in interest rates both on a short-term basis and
over the life of the asset.  Further, in the event of changes in interest rates,
prepayment and early withdrawal levels would likely deviate  significantly  from
those assumed in calculating the table.  Finally,  the ability of many borrowers
to service their  adjustable-rate loans may decrease in the event of an interest
rate increase.

The  following  table sets  forth the  amounts  of  interest-earning  assets and
interest-bearing liabilities outstanding at June 30, 2002, which are anticipated
by the Company, based upon certain assumptions,  to reprice or mature in each of
the future time  periods  shown in the gap table.  Except as stated  below,  the
amount of  assets  and  liabilities  shown  which  reprice  or  mature  during a
particular  period were  determined  in  accordance  with the earlier of term to
repricing or the contractual maturity of the asset or liability.  The table sets
forth an approximation  of the projected  repricing of assets and liabilities at
June 30, 2002, on the basis of contractual  maturities,  anticipated prepayments
and  scheduled  rate  adjustments  within a  three-month  period and  subsequent
selected  time  intervals.  The loan  amounts  in the  table  reflect  principal
balances  expected to be redeployed  and/or  repriced as a result of contractual
amortization  and  anticipated  prepayments  of  adjustable-rate  and fixed-rate
loans, and as a result of contractual rate adjustments on adjustable-rate loans.
The  annual  prepayment  rate for real  estate-related  assets  are based on the
particulars of coupon maturity of the real  estate-related  assets. A decay rate
was used when  estimating  the  expected  maturity  of certain  deposits,  which
typically have no stated contractual maturity. A ten percent decay rate was used
for savings and NOW deposits and a twenty  percent decay rate was used for money
market  accounts.  Christmas  club  accounts,  which  were  included  in savings
accounts,  were slated in the 3 to 12 month  bucket due to the annual pay out of
such funds in the fall of each year.
































Amounts Maturing or Repricing at June 30, 2002 (1)


<TABLE>
<caption>

                                                      Within             3 to 12                  1 to 3
                                                     3 Months             Months                  Years

<S>                                                 <C>                 <C>                   <C>
(Dollars in thousands)
Interest earning assets:
     Loans receivable                                      $200            $10,606                   $5,216
     Investment securities                                4,417             16,624                   26,234
     Federal funds sold                                  10,424                ---                    ---
     Interest-bearing bank balances                         149                ---                    ---
     FHLB stock                                           1,121                ---                    ---

                                                   ------------        -----------             ------------
Total interest-earning assets (1)                       $16,311            $27,230                  $31,450
                                                   ============        ===========            =============


Interest-bearing liabilities
     Savings deposits                                    $1,753             $5,952                  $11,993
     NOW deposits                                           357              1,072                    2,444
     MMDA deposits                                          694              2,082                    3,998
     Certificates of deposit                             17,055             32,071                   13,519
     Borrowings                                            ---               4,000                    5,000
                                                   ------------        -----------            -------------

Total interest-bearing liabilities                      $19,859            $45,177                  $36,954
                                                   ============        ===========            =============


Interest sensitivity gap                                ($3,548)          ($17,947)                 ($5,504)

Cumulative interest sensitivity gap                     ($3,548)          ($21,495)                ($26,999)

Cumulative interest sensitivity gap as a
     percentage of total assets                           (1.61%)            (9.76%)                 (12.26%)

Cumulative interest sensitivity gap as a
    Percentage of interest-earning assets                 (1.71%)           (10.36%)                 (13.01%)

Cumulative interest-earning assets as a
    Percentage of cumulative interest-bearing
    Liabilities                                           82.13%             66.95%                   73.53%

</table>


<table>
<caption>

                                                      3 to 5              5 to 10                Beyond
                                                      Years                Years                10 Years                Total
<S>                                                  <C>                 <C>                    <C>                    <C>
(Dollars in thousands)
Interest earning assets:
     Loans receivable                                    $7,759            $14,537                  $91,409            $129,727
     Investment securities                               17,032                822                      959              66,088
     Federal funds sold                                   ---                 ---                      ---               10,424
     Interest-bearing bank balances                       ---                 ---                      ---                  149
     FHLB stock                                           ---                 ---                      ---                1,121

                                                   ------------        -----------            -------------          -----------
Total interest-earning assets (1)                       $24,791            $15,359                  $92,368            $207,509
                                                   ============        ===========            =============          ===========


Interest-bearing liabilities
     Savings deposits                                    $9,714            $16,959                  $24,454             $70,825
     NOW deposits                                         1,980              3,456                    4,984              14,293
     MMDA deposits                                        2,559              3,059                    1,491              13,883
     Certificates of deposit                               ---                 ---                     ---               62,645
     Borrowings                                            ---                 ---                     ---                9,000
                                                   ------------        -----------            -------------         -----------

Total interest-bearing liabilities                      $14,253            $23,474                  $30,929            $170,646
                                                   ============        ===========            =============         ===========


Interest sensitivity gap                                $10,538            ($8,115)                 $61,439             $36,863

Cumulative interest sensitivity gap                    ($16,461)          ($24,576)                 $36,863

Cumulative interest sensitivity gap as a
     percentage of total assets                           (7.48%)           (11.16%)                  16.74%

Cumulative interest sensitivity gap as a
    Percentage of interest-earning assets                 (7.93%)           (11.84%)                  17.76

Cumulative interest-earning assets as a
    Percentage of cumulative interest-bearing
    Liabilities                                           85.84%             82.41%                  121.60%




<FN>
1  Interest-earning  assets are included in the period in which the balances are
expected to be  redeployed or repriced as a result of  anticipated  prepayments,
scheduled rate adjustments and contractual maturities.
</FN>

</TABLE>

<PAGE>



The following  table  presents the Bank's net  portfolio  value  ("NPV").  These
calculations  were based upon assumptions  believed to be  fundamentally  sound,
although   they  may  vary  from   assumptions   utilized  by  other   financial
institutions. The information set forth below is based on data that included all
financial instruments as of June 30, 2002. Assumptions made by the Bank relating
to interest rates, loan prepayment rates, core deposit duration,  and the market
values of certain assets under the various  interest rate scenarios are believed
to be fundamentally  sound. Actual maturity dates were used for fixed rate loans
and  certificate  accounts.  Investment  securities  were  scheduled  at  either
maturity  date or next  scheduled  call date based upon  judgment of whether the
particular  security  would be  called  based  upon the  current  interest  rate
environment,  as it existed on June 30, 2002. Variable rate loans were scheduled
as of their next scheduled interest rate repricing date. Additional  assumptions
made in the preparation of the NPV table include  prepayment  rates on loans and
mortgage-backed  securities,  core deposits  without stated  maturity dates were
scheduled  with an assumed term of 48 months,  and money market and  noninterest
bearing  accounts were scheduled  with an assumed term of 24 months.  The NPV at
"PAR" represents the difference between the Bank's estimated value of assets and
estimated  value of  liabilities  assuming  no change  in  interest  rates.  The
following sets forth the Bank's NPV as of June 30, 2002.


<TABLE>
<caption>

       Changes in
  Market interest rates                         $Change       %Change       NPV as a     % of assets
     (Basis Points)              Company NPV    From Par      From Par     NPV Ratio(1)    Change(2)
<S>                               <C>           <C>           <C>            <C>         <C>
 (Dollars in thousands)
         +300 bp                    $26,459      $(8,126)      (23.50)%        13.28%    (245) bps.
         +200 bp                     29,556       (5,030)      (14.54)%        14.30%    (143) bps.
         +100 bp                     32,243       (2,343)       (6.78)%        15.10%     (63) bps.
           PAR                       34,586             0         0.00%        15.73%        0 bps.
         -100 bp                     36,616         2,030         5.87%        16.21%       49 bps.
         -200 bp                     38,298         3,712        10.73%        16.56%       83 bps.
         -300 bp                    $39,784        $5,198        15.03%        16.83%      110 bps.


<FN>
(1) Calculated as the estimated NPV divided by the present value of total assets
(2) Calculated as the excess (deficiency) of the NPV ratio assuming the indicated
change in interest rates over the estimated NPV ratio assuming no change in
interest rates.


</fn>
</table>

As  indicated  with the gap table,  certain  shortcomings  are  inherent  in the
methodology used in the above interest rate risk measurements.  Modeling changes
in NPV require the making of certain assumptions that may or may not reflect the
manner in which actual  yields and costs  respond to changes in market  interest
rates.



<PAGE>


Analysis of Net Interest Income

Net interest income represents the difference between income on interest-earning
assets and expense on  interest-bearing  liabilities.  Net interest  income also
depends on the relative amounts of interest-earning  assets and interest-bearing
liabilities and the interest rate earned or paid on them, respectively.

Average Balance Sheet

The following table sets forth certain  information  relating to the Company for
the years ended June 30, 2002 and 2001.  For the  periods  indicated,  the total
dollar amount of interest  income from average  interest-earning  assets and the
resultant  yields,  as well as the interest expense on average  interest-bearing
liabilities,  are  expressed  both  in  dollars  and  rates.  No tax  equivalent
adjustments  were made.  All  average  balances  are average  monthly  balances.
Interest and balances of nonaccrual loans and certain deferred  origination fees
have been  excluded  from the average loan  balances and yield  calculations  in
these tables.


<TABLE>
<caption>

                                                 2002             2001           2002        2001         2002          2001
                                               Average          Average        Interest    Interest      Average       Average
                                             Outstanding      Outstanding       Earned/     Earned/      Yield/        Yield/
                                               Balance          Balance          Paid        Paid         Rate          Rate
<S>                                          <C>             <C>             <C>          <C>           <C>          <C>
(Dollars in thousands)
Interest-earning assets:
   Loans receivable, net1                      $121,087        $102,230       $9,081       $7,884         7.50%        7.71%
   Investment securities2                        55,089          49,270        3,105        3,054         5.64         6.20
   Federal funds                                 12,670           8,252          301          472         2.38         5.72
   Interest-bearing bank balances                   742             551           19           37         2.56         6.72
   FHLB stock                                     1,000             909           44           65         4.40         7.15

                                           --------------   ------------    -----------  ---------      -------     ----------
       Total interest-earning assets           $190,588        $161,212      $12,550      $11,512         6.59         7.14
                                           ==============   ============    ===========  =========     ========     ==========


Interest-bearing liabilities:
   Savings deposits                            $73,785         $61,026       $1,727       $1,876         2.34         3.07
   Demand and NOW deposits                      32,419          24,373          163          173         0.50         0.71
   Certificates of deposit                      62,445          53,298        2,663        2,807         4.26         5.27
   Borrowings                                    7,000           8,750          381          592         5.44         6.77

                                           ------------   -------------   -----------   ---------   ----------    ----------
      Total interest-bearing                  $175,649        $147,447       $4,934       $5,448         2.81         3.69
liabilities
                                           ============   =============   ===========  ==========   ==========   ===========


Net interest income                                                          $7,616     $6,064

Net interest rate spread                                                                                3.78%      3.45%

Net interest margin                                                                                     4.00%      3.76%

Average interest-earning assets to
     average interest-bearing                                                                         108.51%    109.34%
liabilities



<FN>

1  Calculated net of deferred loan fees, loan discounts, loans in process and
loan loss reserves.
2  Includes tax-free securities, mortgage-backed securities and asset-backed
securities.
</FN>

</table>


<PAGE>


Rate / Volume Analysis

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  have affected the Company's  interest  income and interest  expense
during the periods  indicated.  Information  is provided in each  category  with
respect to:

(i) Change  attributable to changes in volume  (changes in volume  multiplied by
prior  rate);  (ii)  Change  attributable  to changes in rate  (changes  in rate
multiplied by prior volume); and (iii) The net change.

The changes  attributable  to the  combined  impact of volume and rate have been
allocated  proportionately  to the  changes due to volume and the changes due to
rate.



<TABLE>
<caption>
                                           2002 versus 2001                       2001 versus 2000

                                         Increase/(Decrease)        Total     Increase/(Decrease)    Total
                                               Due to            Increase/        Due to           Increase/
                                         Volume       Rate       (Decrease)    Volume    Rate     (Decrease)
<S>                                      <C>         <C>         <C>            <C>       <C>      <C>
Interest-earning assets:
   Loans receivable, net(1)               $1,407       $(210)       $1,197        $503     $112        $615
   Investment securities(2)                  220        (169)           51         115      123         238
   Federal funds                           1,858      (2,029)         (171)        146      (28)        118
   Interest-bearing bank balances             23         (41)          (18)        (16)      11          (5)
   FHLB stock                                  7         (28)          (21)        (66)      65          (1)

                                         -------     -------     ---------    --------    -----    --------
Total interest-earning assets              3,515      (2,477)        1,038         682      283         965
                                         -------     -------     ---------    --------    -----    --------


Interest-bearing liabilities:
   Savings deposits                        1,055      (1,204)         (149)         67      (21)         46
   Demand and NOW deposits                   (86)         76           (10)         35      (16)         19
   Certificates of deposit                 1,325      (1,469)         (144)         84      197         281
   Borrowings                               (279)         68          (211)         89       29         118

                                         -------     -------     ---------    --------    -----    --------
Total interest-bearing liabilities         2,015      (2,529)         (514)        275      189         464
                                         -------     -------     ---------    --------    -----    --------


Net interest income                       $1,500         $52        $1,552        $407      $94        $501
                                         =======     =======     =========    ========    =====    ========


<fn>
(1) Calculated net of deferred loan fees, loan discounts, loans in process and
loan loss reserves.
(2) Includes tax-free securities, mortgage-backed securities
and asset-backed securities.


</fn>
</TABLE>


As the above table  demonstrates,  net interest income for the fiscal year ended
June 30, 2002 has been impacted  significantly  by the change in volume and to a
lesser extent by the change in rates. It has been a year of tremendous growth in
the  loan and  investment  portfolios,  which  have  been  primarily  funded  by
outstanding deposit growth. The growth in the volume of the loan and investments
portfolios  has been  offset  by  corresponding  decreases  in the yield on such
assets.  The various  types of deposit  products have grown  significantly  with
corresponding  decreases in rate on these products. As a result of these changes
in volume and changes in yield or rate the  Company's  net  interest  margin and
spread have expanded.  The net interest margin improved 24 basis points to 4.00%
for the fiscal  year ended June 30,  2002,  as  compared to 3.76% for the fiscal
year ended June 30,  2001.  The spread  increased  to 3.78% for the fiscal  year
ended June 30, 2002, an improvement of 33 basis points, as compared to 3.45% for
the fiscal year ended June 30, 2001.


<PAGE>


COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2002 AND JUNE 30, 2001.


Total assets  increased  $35.1 million,  or 19.0%, to $220.2 million at June 30,
2002 as compared  to $185.1  million at June 30,  2001.  Asset  growth  occurred
primarily in the  investment and loan  portfolios.  The asset growth was largely
funded  through  increases  in  deposit  accounts  and to a lesser  extent  with
borrowings  from the Federal Home Loan Bank ("FHLB").  The Company  attributes a
portion of the growth to our locally  provided  customer  service offered in our
branches and by our knowledgeable and service-oriented staff. The uncertainty in
the stock  market has also  brought  individuals  back to the more  conservative
banking products.

Cash and federal funds sold

Cash and due from banks  increased  to $7.4  million at June 30,  2002 from $5.3
million at June 30,  2001,  an increase of $2.1  million or 39.6% as a result of
daily  fluctuations due to normal deposit account clearing  activities and vault
cash needs, based on customer cash needs.  Federal funds sold decreased to $10.4
million at June 30, 2002 from $13.5 million at June 30, 2001, a decrease of $3.1
million  or 23.0%.  The level of federal  funds  sold is also a function  of the
daily  account   clearing  needs  and  deposit   levels,   which  can  fluctuate
significantly  on a daily basis.  Management has attempted to minimize the level
of cash and federal  funds sold during  fiscal year 2002 due to the low interest
rate  environment,  while  maintaining  sufficient  liquidity  to fund  loan and
customer demand.

Investments

Investments  increased to $66.1  million at June 30, 2002 from $48.9  million at
June 30,  2001,  an  increase  of $17.2  million  or 35.2%.  As the table  below
demonstrates,  the  portfolio  composition  has shifted  toward U.S.  agency and
mortgage-backed  securities  and away from  corporate  securities,  asset-backed
securities  and tax-free  state and  political  subdivision  securities.  During
fiscal  year  2002,   management  believed  U.S.  agencies  and  mortgage-backed
securities  were  offering  the  highest  yield  relative  to the level of risk.
Management  also attempted to address  interest rate risk by purchasing a number
of adjustable rate securities.  These adjustable rate securities are expected to
partially  offset the interest rate risk  associated  with long-term  fixed rate
loans.

During the fiscal year ended June 30, 2002,  principal  payments of $3.0 million
for  securities,  other than  mortgage-backed  securities,  and $5.5 million for
mortgage-backed  securities were received,  partially  offsetting purchases made
during the fiscal year.  Purchases  of  securities,  other than  mortgage-backed
securities,  amounted  to $15.8  million  during the fiscal  year ended June 30,
2002. Purchases of mortgage-backed  securities amounted to $16.2 million for the
fiscal  year  ended  June  30,  2002.  Further  offsetting  the  purchases  were
maturities and calls of securities amounting to $5.8 million during fiscal 2002.
Approximately  $1.0  million in  corporate  securities  were sold at a profit of
$19,000 during the fiscal year ended June 30, 2002.  Management  decided to sell
these  corporate  securities due to potential  credit risk. As part of its Asset
Liability  Management  practice,  management  continually reviews the securities
held for  potential  credit and adverse  interest rate risk  characteristics.  A
decision to sell may result from these reviews.

The Company  continues  to hold 13.3% of the  investment  portfolio  at June 30,
2002, in state and  political  subdivision  securities to take  advantage of tax
savings and to promote the Company's  participation  in the communities in which
it operates.  The Company  continues to operate a niche market of financing  for
fire trucks and firehouses through either bond purchases or loans.


<PAGE>


<TABLE>
<caption>


                                      Market value at    Percentage     Market value at      Percentage
                                       June 30, 2002    of portfolio     June 30, 2001      of portfolio
<S>                                        <C>              <C>            <C>               <C>
(Dollars in thousands)
U.S. Treasuries                               $---            ---%             $1,005            2.1%
U.S. government agencies                    14,862           22.5%              1,794            3.7%
State and political subdivisions             8,811           13.3%              9,420           19.3%
Mortgage-backed securities                  19,564           29.6%              8,783           18.0%
Asset-backed securities                        818            1.3%              3,300            6.7%
Corporate debt securities                   20,760           31.4%             23,432           47.9%

                                           -------          ------         ----------        --------
Total debt securities                       64,815           98.1%             47,734           97.7%

Equity securities and other                  1,274            1.9%              1,141            2.3%

                                           -------          ------         ----------        --------

Total available-for-sale securities        $66,089          100.0%            $48,875          100.0%
                                         ==========        =========      ============       =========

</table>


Federal Home Loan Bank Stock

Federal  Home Loan Bank Stock  amounted  to $1.1  million at June 30,  2002,  an
increase  of  $182,000.  This  increase  was a result of minimum  capital  stock
requirements of all members of the Federal Home Loan Bank of New York.

Loans

Total loans  increased to $129.7 million at June 30, 2002 from $110.9 million at
June 30, 2001,  an increase of $18.8 million or 17.0%.  Residential  real estate
loans increased $14.0 million,  or 15.6%,  between fiscal year end June 30, 2002
and 2001. The most significant  increases  within  residential real estate loans
occurred in  conventional  fixed rate mortgages of $13.7  million,  or 18.6% and
construction  loans of $1.0 million,  or 50.0%;  however,  adjustable  rate real
estate mortgages indexed to treasury rates decreased by $1.3 million,  or 15.9%.
The remaining  changes were within the various other types of  residential  real
estate loans. Commercial real estate mortgages increased $3.6 million, or 69.2%,
to $8.8  million at June 30, 2002 from $5.2 at June 30, 2001.  Commercial  loans
increased $1.1 million,  or 33.3%,  to $4.4 million at June 30, 2002 as compared
to $3.3  million at June 30,  2001.  Marketing  efforts  to  attract  commercial
customers have been  successful in both  gathering  deposits and making loans. A
marketing  campaign  begun in the quarter ended June 30, 2002, to advertise home
equity  products has begun to succeed.  Home equity loans increased $0.9 million
or 14.8%,  to $7.0  million at June 30, 2002 as compared to $6.1 million at June
30, 2001.  Management  believes that the decreases in  installment  and passbook
loans were a result of some of this  lending  being  picked up in  mortgages  or
refinancing.  Zero percent auto  financing  offered by  automakers  has led to a
decrease in auto loans,  which are  classified  as  installment.  As a result of
these changes, the loan portfolio composition has slightly shifted to commercial
real estate  mortgages from  residential  real estate  mortgages and installment
loans.


<TABLE>
<caption>


                                    At           Percentage           At            Percentage
                              June 30, 2002     of portfolio    June 30, 2001      of portfolio
<S>                              <C>               <C>            <C>                <C>
(Dollars in  thousands)
Real estate mortgages
   Residential                    $103,494           79.8%           $89,528           80.7%
   Commercial                        8,764            6.8%             5,239            4.7%
Home equity loans                    6,957            5.4%             6,138            5.6%
Commercial loans                     4,356            3.3%             3,291            3.0%
Installment loans                    5,611            4.3%             6,128            5.5%
Passbook loans                         545            0.4%               596            0.5%
                                  --------         --------         ---------       --------

Total loans                       $129,727          100.0%          $110,920          100.0%
                                  ========        =========        ==========       ==========


</TABLE>

<PAGE>


Allowance for loan losses

The allowance for loan losses is established through a provision for loan losses
based on management's evaluation of the risk inherent in the loan portfolio, the
composition of the loan portfolio,  specific impaired loans and current economic
conditions. Such evaluation,  which includes a review of all loans on which full
collectibility may not be reasonably assured, considers among other matters, the
estimated net realizable  value or the fair value of the underlying  collateral,
economic  conditions,  historical  loan loss  experience  and other factors that
warrant  recognition  in providing  for an allowance for loan loss. In addition,
various regulatory  agencies,  as an integral part of their examination process,
periodically  review the Bank's allowance for loan losses and valuation of OREO.
Such agencies may require the Bank to recognize additions to the allowance based
on  their  judgment  about  information  available  to them at the time of their
examination.  The allowance for loan losses is increased by a provision for loan
losses (which results in a charge to expense) and is reduced by net charge-offs.
During the fiscal year ended June 30, 2002,  the level of provision was affected
by the growth of the loan portfolio and composition of the portfolio shifting to
more commercial loans. These types of loans generally possess a higher degree of
credit risk than  traditional  one-to-four  family  residential  mortgage loans.
Management  also  implemented  improved  procedures for pursuing  delinquent and
previously  charged-off  accounts during fiscal year 2002, which appears to have
helped reduce the effect of credit quality deterioration due to current economic
weakness in the overall  economy.  Any increase in the allowance for loan losses
or loan  charge-offs  could have a  material  adverse  effect on our  results of
operations and financial condition.



<TABLE>
<caption>

Analysis of the Allowance for Loan Losses
                                                           June 30, 2002        June 30, 2001
<S>                                                        <C>                  <C>
Balance at the beginning of the period                          $886,081             $866,443
Charge-offs:
     Commercial real estate mortgage loans                          ---                26,432
     Home equity                                                   2,380                  ---
     Installment loans to individuals                             49,877               50,483
                                                           -------------        --------------

Total loans charged off                                           52,257               76,915
Recoveries:
     Installment loans to individuals                             16,010               36,553
                                                           -------------        --------------

Total recoveries                                                  16,010               36,553

                                                           -------------        -------------

Net charge-offs                                                   36,247               40,362

Provisions charged to operations                                 218,900               60,000
                                                           -------------        -------------

Balance at the end of the period                              $1,068,734             $886,081
                                                           =============        =============


Ratio of net charge-offs to average loans outstanding              0.03%                0.04%
Ratio of net charge-offs to nonperforming assets                   9.98%                5.22%
Allowance for loan loss to nonperforming loans                   321.07%              119.18%
Allowance for loan loss to net loans                               0.83%                0.81%

</TABLE>

Nonaccrual loans and Nonperforming assets Loans are reviewed on a regular basis.
Management  determines  that a loan  is  impaired  or  nonperforming  when it is
probable at least a portion of the loan will not be collected in accordance with
its  contractual  terms due to an  irreversible  deterioration  in the financial
condition of the borrower or the value of the underlying collateral. When a loan
is  determined  to be  impaired,  the  measurement  of the  loan is based on the
present   value   of   estimated   future   cash   flows,    except   that   all
collateral-dependent  loans are measured for impairment  based on the fair value
of the collateral.  Management  places loans on nonaccrual status once the loans
have become over 90 days  delinquent.  Nonaccrual  is defined as a loan in which
collectibility is questionable and therefore interest on the loan will no longer
be recognized on an accrual basis. A loan does not have to be 90 days delinquent
in  order  to be  classified  as  nonperforming.  Other  real  estate  owned  is
considered nonperforming. The Bank had no accruing loans delinquent more than 90
days at June 30, 2002 or 2001.


<PAGE>



























<TABLE>
<caption>


The following table sets forth information regarding nonaccrual loans and other
nonperforming assets.

                                                           June 30, 2002        June 30, 2001
<S>                                                         <C>                 <C>
Nonaccruing loans:
     Real estate mortgage loans
           Residential mortgage loans (One-to-four family)      $313,981           $660,607
           Commercial mortgage loans                               ---               71,711
     Home equity                                                   ---                2,380
     Installment loans to individuals                             18,886              8,770
                                                           -------------        -----------

Total nonaccruing loans                                          332,867            743,468

Other real estate owned
     Real estate mortgage loans
           Commercial mortgage loans                              30,229             30,229
                                                           -------------        -----------
Total other real estate owned                                     30,229             30,229


                                                           -------------        -----------
Total nonperforming assets                                      $363,096           $773,697
                                                           =============        ===========


Total nonperforming assets as a percentage of total assets         0.16%              0.42%
Total nonperforming loans to total loans                           0.26%              0.67%



</table>



Gross  interest  income of $9,700  and  $31,000  would  have  been  recorded  on
nonaccrual  loans  under  their  original  terms if the loans  had been  current
through the fiscal years ended June 30, 2002 and 2001, respectively. No interest
income was recorded on nonaccrual loans more than 90 days delinquent  during the
fiscal years ended June 30, 2002 or 2001.

Other real estate owned

Real  estate  acquired  as a  result  of  foreclosure  or by  deed  in  lieu  of
foreclosure is classified as other real estate owned ("OREO") until such time as
it is sold. When real estate is acquired through  foreclosure or by deed in lieu
of  foreclosure,  it is  recorded  at its fair value,  less  estimated  costs of
disposal.  If the value of the property is less than the loan,  less any related
specific loan loss  provisions,  the difference is charged against the allowance
for loan losses. Any subsequent  write-down of OREO is charged against earnings.
At June 30, 2002 and 2001,  other real estate owned amounted to $30,000.  During
the fiscal year ended June 30, 2002, one other property was transferred to other
real estate owned through  foreclosure  proceedings of approximately  $87,000. A
net gain of approximately  $22,000 was recognized in connection with the sale of
this property.

Premises and equipment

Premises and equipment  amounted to $5.0 million at June 30, 2002 as compared to
$5.1  million at June 30,  2001.  The decline of $100,000  was the net result of
purchases of approximately  $375,000 and  depreciation  expense of approximately
$476,000.

Accrued interest receivable

At June 30, 2002, accrued interest receivable on loans and investments  amounted
to $1.5  million as compared to $1.4  million at June 30,  2001,  an increase of
$0.1 million or 7.1%.  The increase was due to growth in the loan and investment
portfolios. Timing of interest payments can affect the level of accrued interest
receivable.

Prepaid expenses and other assets

Prepaid  expense  and other  assets  amounted  to  $297,000  at June 30, 2002 as
compared  to  $289,000 at June 30,  2001,  an  increase of $8,000.  Fees such as
insurance,  real estate taxes, software licensing and advertising that have been
paid in advance of the service are the majority of the assets in this  category.
The expense related with these fees is amortized over the service period.

Deposits

It has been an  unprecedented  year in  attracting  new  customers  and  serving
existing  customers.  The number of deposit accounts grew by approximately 2,200
accounts,  or 9.2% over the prior year. The uncertainty of the stock market also
helped to turn consumers to the more  conservative  deposit  products offered by
banking  institutions.  Noninterest  bearing deposits increased $3.6 million, or
19.8%. Certificates of deposit increased $4.5 million, or 7.8%. Savings deposits
increased $13.8 million, or 24.2%. Money market deposits increased $4.7 million,
or 51.0%. NOW deposits increased $2.8 million, or 24.9%. The overall increase in
deposit accounts  amounted to $29.5 million,  or 19.1%.  There has been a slight
shift in the  composition  of the deposit  portfolio to savings and money market
deposits,  which  represent  38.5% and 7.6% of the portfolio at June 30, 2002 as
compared to 37.0% and 6.0%,  respectively,  at June 30,  2001.  Certificates  of
deposit represented 34.1% of the portfolio at June 30, 2002 as compared to 37.7%
of the portfolio at June 30, 2001. The maturity of  certificates of deposits has
shifted  to  shorter  terms.  Approximately  $34.1  million,  or  54.4%,  of the
certificates  of deposit at June 30, 2002, were scheduled to mature in less than
seven months as compared to $28.9  million,  or 49.7%,  of the  certificates  of
deposit  at  June  30,  2001.  Approximately  $15.1  million,  or  24.0%  of the
certificates  of deposit will mature  between seven and twelve months as of June
30, 2002, as compared to $16.7 million, or 28.8%, at June 30, 2001.

<TABLE>
<caption>

                                          At          Percentage         At              Percentage
                                       June 30, 2002     of portfolio   June 30, 2001       of portfolio

<S>                                  <C>                <C>               <C>                <C>
(Dollars in  thousands)
Noninterest bearing deposits            $22,067             12.0%             $18,418             11.9%
Certificates of deposit                  62,645             34.1%              58,113             37.7%
Savings deposits                         70,825             38.5%              57,021             37.0%
Money market deposits                    13,883              7.6%               9,194              6.0%
NOW deposits                             14,294              7.8%              11,446              7.4%
                                      --------------   --------------   -------------       -----------

Total deposits                         $183,714            100.0%            $154,192            100.0%
                                     ===============   ==============   =============       ===========


</TABLE>

Borrowings from FHLB

Borrowings  from FHLB  amounted to $9.0  million at June 30, 2002 as compared to
$5.0 million at June 30, 2001, an increase of $4.0 million or 80.0%.  Due to the
low interest rate environment, management was able to borrow funds from the FHLB
and invest such funds in higher yielding investment securities.

Accrued expenses and other liabilities

Accrued expense and other liabilities  increased $289,000, or 46.4%, to $912,000
at June 30, 2002 as compared to $623,000 at June 30, 2001. The most  significant
factor  contributing  to the  increase  was an  increase  in  the  deferred  tax
liabilities  associated  with the  unrealized  gains  on the  available-for-sale
investment portfolio.

Accrued income taxes

Accrued  income  taxes  amounted  to  $131,000  at June 30,  2002 as compared to
$196,000 at June 30, 2001, a decrease of  approximately  $65,000,  or 33.1%. The
level of accrued  income tax is related to and will  fluctuate  as the result of
changes in the estimated effective tax rate and provision for income taxes.



<PAGE>


Shareholders' equity

Retained earnings  increased to $17.2 million at June 30, 2002 compared to $16.0
million  at June 30,  2001 as a result of net income of $1.7  million  partially
offset  by  dividend  payments  amounting  to  $481,000.   Unearned  stock-based
compensation  was affected by  stock-based  compensation  earned.  Unearned ESOP
shares  changed due to earned and allocated  shares during the fiscal year.  The
change in other accumulated  comprehensive  income was a result of the change in
the  equity  portion of  marking  to market  the  available-for-sale  investment
portfolio.  The change in treasury stock balances are a result of the repurchase
of 37,500  shares of common stock at an average cost of $14.16 per share,  at an
aggregate cost of $531,000.  These  purchases  were  partially  offset by 12,580
options  that were  exercised  during the fiscal year ended June 30,  2002.  The
issuance  of 9,400  shares of stock  due to  normal  vesting  and  vesting  upon
retirement associated with the Management Recognition and Retention Plan of 2000
contributed the remaining offset to the treasury stock account.




<PAGE>


                         COMPARISON OF OPERATING RESULTS
               FOR THE YEARS ENDED JUNE 30, 2002 AND JUNE 30, 2001


The earnings of the Company,  as well as other  financial  institutions,  depend
primarily on its level of net interest income,  which is the difference  between
interest earned on the Company's  interest-earning assets,  consisting primarily
of residential and commercial  real estate loans,  consumer loans and securities
available  for sale,  and the  interest  paid on  interest-bearing  liabilities,
consisting of deposits and borrowings.  Net interest income is a function of the
Company's  interest  rate spread,  which is the  difference  between the average
yield  earned  on   interest-earning   assets  and  the  average  rate  paid  on
interest-bearing  liabilities,  as well as a function of the average  balance of
interest-earning  assets as  compared  with  interest-bearing  liabilities.  The
Company's  earnings also are affected by its fees and service  charges and gains
on sale of loans and  securities,  as well as its level of  operating  and other
expenses,  including  salaries and employee  benefits,  occupancy  and equipment
costs,  data processing  expense,  marketing and advertising  costs, and federal
deposit insurance premiums.

Net interest income

Net interest income is a function of interest income and interest  expense.  Net
interest income for the fiscal year ended June 30, 2002 amounted to $7.6 million
as compared to $6.1 million for the fiscal year ended June 30, 2001, an increase
of $1.5 million,  or 24.6%.  As  illustrated  rate / volume and average  balance
sheet tables, the increased volume in most categories of interest-earning assets
and interest-bearing  liabilities  significantly contributed to the improved net
interest income.  These increases in volume were offset by decreases in yield on
interest-earning  assets  which  experienced  decreases in all  categories  with
shorter term assets experiencing the greatest decrease in yield. As a result the
overall yield on interest-earning  assets decreased 55 basis points to 6.59% for
the fiscal  year ended June 30,  2002 as  compared  to 7.14% for the fiscal year
ended June 30, 2002. However,  the rate charged on interest-bearing  liabilities
also decreased even more significantly,  88 basis points to 2.81% for the fiscal
year ended June 30, 2002 as compared to 3.69% for the same period ended June 30,
2001.  As a result of changes in  interest-earning  assets and  interest-bearing
liabilities,  net  interest  spread  increased  33 basis points to 3.78% for the
period  ended June 30, 2002 as  compared to 3.45% for the period  ended June 30,
2001. Net interest margin increased 24 basis points to 4.00% for the fiscal year
ended June 30,  2002 as  compared  to 3.76% for the  fiscal  year ended June 30,
2001. These  fluctuations  were primarily the result of the Federal Reserve rate
cuts completed during the fiscal year ended June 30, 2002. The rates were cut in
response to weakness demonstrated in the United States economy and the terrorist
attacks of September 11, 2001.

INTEREST INCOME


Interest  income for the  fiscal  year ended  June 30,  2002  amounted  to $12.5
million as compared to $11.5 million for the fiscal year ended June 30, 2001, an
increase  of $1.0  million,  or 8.7%.  Interest  income is derived  from  loans,
investments  and  other   interest-bearing   assets.   The  average  balance  of
interest-earning  assets  increased to $190.6  million for the fiscal year ended
June 30, 2002 as  compared to $161.2  million for the fiscal year ended June 30,
2001, an increase of $29.4 million,  or 18.2%.  The decrease in average yield on
such investments partially offset the increase in average balance.

Interest  income on loans  increased  to $9.1  million for the fiscal year ended
June 30,  2002 as  compared  to $7.9  million for the fiscal year ended June 30,
2001, an increase of $1.8 million,  or 22.8%. The level of interest on loans was
affected  by the  average  balance  and  yield  on  such  loans  as  well as the
composition of the portfolio.  The average  balance of loans increased to $121.1
million for the fiscal  year ended June 30,  2002 as compared to $102.2  million
for the same period of the prior year, an increase of $18.9  million,  or 18.5%.
The increase in average balance was offset by a decrease in the average yield on
such loans,  which was 7.50% for the fiscal year ended June 30, 2002 as compared
to 7.71% for the same period the prior year, a decrease of 21 basis points.  The
shift in the loan  portfolio  composition  to more  commercial  type  loans from
standard  residential  loans  partially  offset a potentially  more  significant
decreases  in yield on the loan  portfolio.  Commercial  real  estate  mortgages
represented $8.8 million, or 6.8%, of the portfolio at June 30, 2002 as compared
to $5.2 million,  or 4.7%, of the  portfolio at June 30, 2001.  Commercial  real
estate  mortgages  tend to have a  higher  interest  rate  than  other  types of
mortgages and long-term loans.  These loans experienced the greatest  percentage
fluctuation  between  June 30, 2002 and 2001,  growing $3.5  million,  or 67.3%.
Residential real estate mortgages  continue to represent the greatest  component
of the loan  portfolio,  and  represented  the largest dollar  increase of $14.0
million, or 15.6%, between June 30, 2002 and 2001.

Interest  income on investments was also affected by the average  balance,  rate
and  composition of the  portfolio.  Interest  income on  investments  increased
$30,000 to $3.1 million when  comparing  fiscal year end June 30, 2002 and 2001.
The average  balance of the investment  portfolio  amounted to $55.1 million for
the fiscal year ended June 30, 2002 as compared to $49.3  million for the fiscal
year ended June 30, 2001, an increase of $5.8 million, or 11.8%. The increase in
average balance was partially offset by decreases in yield on such  investments.
The yield on  investments  was 5.64% for the fiscal  year ended June 30, 2002 as
compared to 6.20% for the same period of the prior year,  a decrease of 56 basis
points.  The shift in the portfolio  composition  also  contributed to the lower
yield. Corporate securities represented $20.8 million, or 31.4% of the portfolio
at June 30, 2002 as compared to $23.4 million, or 47.9% of the portfolio at June
30,  2001.  Corporate  securities  tend  to  carry a  higher  yield  than  other
investments such as U.S.  government  agencies and  mortgage-backed  securities.
U.S.  government agency investments  represented $14.9 million,  or 22.5% of the
portfolio at June 30, 2002 as compared to $1.8 million, or 3.7% of the portfolio
at June 30, 2001. Mortgage-backed securities represented $19.6 million, or 29.6%
of the portfolio at June 30, 2002 as compared to $8.8  million,  or 18.0% of the
portfolio at June 30, 2001.  As stated  above,  the change in overall  yield was
most  significantly  affected by the  general  change to a lower  interest  rate
environment  between June 30, 2002 and 2001.  Management has attempted to invest
in more adjustable rate  investments  when  appropriate  during fiscal year 2002
than in the past in order to partially  protect the net interest  position  when
interest rates begin to rise.

Interest income on federal funds sold was significantly impacted by the interest
rate  environment.  The rate on such  funds  decreased  334  basis  points  when
comparing the fiscal year ended June 30, 2002 and 2001. Due to the fact that the
Bank maintains a substantial balance in federal funds, a change in this interest
rate can considerably affect the level of interest income. The growth in deposit
balances contributed to the increase in average balance of federal funds.

INTEREST EXPENSE

Interest  expense  for the  fiscal  year ended June 30,  2002  amounted  to $4.9
million as compared to $5.4  million for the fiscal year ended June 30,  2001, a
decrease  of $0.5  million,  or 9.3%.  Interest  expense  includes  interest  on
deposits   as  well  as  interest  on   borrowings.   The  average   balance  of
interest-bearing  liabilities  increased  to $175.6  million for the fiscal year
ended June 30, 2002 as compared to $147.4 million for the fiscal year ended June
30,   2001,   an  increase  of  $28.2   million.   The  average   rate  on  such
interest-bearing  liabilities  decreased 88 basis points to 2.81% as compared to
3.69% between fiscal years ended June 30, 2002 and 2001, respectively.

The  average  balance of  savings  deposits,  which  includes  escrow  deposits,
Christmas club accounts and student savings  increased $12.8 million,  or 20.9%,
to $73.8  million  for the fiscal  year ended June 30, 2002 as compared to $61.0
million for the fiscal year ended June 30, 2001. The increase in average balance
of such  savings  accounts  was offset by a decrease in average rate of 73 basis
points to 2.34% for the  twelve-month  period ended June 30, 2002 as compared to
3.07% for the same period ended June 30, 2001. The average balance of demand and
NOW deposit accounts increased $8.0 million to $32.4 million for the fiscal year
ended June 30, 2002 as compared to $24.4  million for the fiscal year ended June
30, 2001.  The average rate on such deposits  decreased 21 basis points to 0.50%
for the fiscal year ended June 30, 2002 as compared to 0.71% for the same period
ended June 30, 2001. The average balance of certificates of deposit  amounted to
$62.4  million  for the fiscal  year ended June 30,  2002 as  compared  to $53.3
million for the fiscal year ended June 30, 2001,  an increase of $9.1 million or
17.1%.  The average rate on such  certificates  of deposit  decreased  101 basis
points to 4.26% for the fiscal year ended June 30, 2002 as compared to 5.27% for
the same  period of the prior  year.  As stated  above,  these rates are largely
affected by the interest rate environment in general and competitive  pressures,
which can be more  significant  in a rising  rate  environment  as compared to a
declining rate environment. Management recognizes that a rising rate environment
could have an inverse relationship to the net interest spread and margin causing
them to  decrease,  potentially  affecting  the overall net income  position and
profitability.

The decrease in average  balance of  borrowings  of $1.8 million and decrease in
rate on such  borrowings of 133 basis points  between fiscal year ended June 30,
2002 and 2001 also  contributed to the decreased  interest  expense and improved
net interest income.

NONINTEREST INCOME

Other income amounted to $1.8 million for the fiscal year ended June 30, 2002 as
compared to $1.1 million for the fiscal year ended June 30, 2001, an increase of
$0.7 million,  or 63.6%.  Service charges on deposit  accounts  amounted to $1.1
million for the fiscal year ended June 30, 2002 as compared to $0.5  million for
the same  period  of the prior  year,  an  increase  of $0.6  million.  The most
significant item affecting this revenue was the introduction of the new Carefree
Overdraft Privilege product.  The program,  which was initiated in October 2001,
allows  certain select  customers to overdraw their checking  accounts while the
Bank  continues  to honor their  checks up to certain  limits  based on checking
account type and customer history.  Other operating income increased to $713,000
for the fiscal year ended June 30,  2002 as compared to $554,000  for the fiscal
year  ended  June  30,  2001,  an  increase  of  $159,000,  or  28.7%.  The most
significant  contributors to the improvement in other operating  income included
merchant credit card processing  fees,  debit card fees and referral fees earned
on our  collaboration  with  Fenimore  Asset  Management.  Merchant  credit card
processing  fees were  generated  based on referrals to  Transfirst  credit card
processors.  Gains of approximately $22,300 and $17,000 associated with the sale
of a property  formerly  categorized in other real estate owned were  recognized
during fiscal 2002 and 2001,  respectively.  Gains of approximately $19,000 were
recognized on the sales of two corporate  securities  during fiscal 2002.  Other
fees included in other income are associated with late charges,  appraisal fees,
mortgage lock-in and origination fees.

NONINTEREST EXPENSE

Other expenses increased to $7.0 million for the fiscal year ended June 30, 2002
as compared to $6.0 million for the fiscal year ended June 30, 2001, an increase
of $1.0  million,  or 16.7%.  A portion of the  increase in other  expenses  was
directly  related  to the  overall  increase  in  volume of  customer  accounts.
Depreciation  expense increased  approximately  $48,000 between fiscal year 2002
and 2001.  This increase was the direct result of branch  openings and equipment
amortization associated with these new branches.  Professional fees were $54,000
higher the for fiscal year 2002 as compared to fiscal year 2001.  The Bank begun
using an  independent  loan review team to assist in evaluating  the  commercial
loan portfolios.  Another firm assisted the Bank in reviewing its operations and
lending  departments  in efforts to  improve  efficiency.  The Bank also used an
outside firm to help with the implementation of the Carefree Overdraft Privilege
program.  This firm was paid  approximately  $115,000  during  fiscal year 2002.
Increases  in salary  and other  employee  benefits  increased  $370,000,  which
related to annual  salary  increases,  higher  medical  and  retirement  benefit
expenses  such as ESOP  expense and  funding  requirements  associated  with the
Defined  Benefit  Plan.  The Company  also  invested in  educating  employees to
appropriately  use the  technology  that it has  invested in during the last few
years in order to make sure the  efficiencies  that should be achieved with this
technology are realized.  The relatively rural  environment in which the Company
operates increased some costs because of the inability to take full advantage of
some of the  technological  advances in telephone  and other data  communication
options available to other geographic areas.

PROVISION FOR INCOME TAXES

The provision  for income taxes  directly  reflects the expected tax  associated
with  the  revenue   generated  for  the  given  year  and  certain   regulatory
requirements. The increase in the provision was primarily due to the adjustments
needed to properly reflect the expected tax  requirements.  The most significant
items  affecting the effective  rate include  tax-exempt  income as a percent of
total income and tax benefits associated with stock compensation.

LIQUIDITY AND CAPITAL RESOURCES

The Company's  primary sources of funds are deposits and proceeds from principal
and interest payments on loans,  mortgage-backed securities and debt securities,
as well as lines of credit and term borrowing  facilities  available through the
Federal Home Loan Bank as needed. While maturities and scheduled amortization of
loans  and  securities  are  predictable  sources  of funds,  deposit  outflows,
mortgage prepayments,  and borrowings are greatly influenced by general interest
rates, economic conditions and competition.

The Company's  primary  investing  activities are the origination of residential
one- to  four-family  and  commercial  real estate  loans,  other  consumer  and
commercial  business loans, and the purchase of  mortgage-backed  securities and
debt  securities.  Purchases of  mortgage-backed  securities and debt securities
totaled  $32.0  million and $20.4  million for the years ended June 30, 2002 and
2001,  respectively.  These  activities  were funded  primarily  through deposit
growth,  and principal  payments on loans,  mortgage-backed  securities and debt
securities.  Loan sales did not provide an additional source of liquidity during
the years ended June 30,  2002 and 2001,  as the  Company  generally  originates
loans for retention in its portfolio.

The Company  experienced  a net increase in total  deposits of $29.5 million and
$20.7  million  for the years ended June 30,  2001 and 2000,  respectively.  The
level of  interest  rates and  products  offered by local  competitors  are some
factors affecting deposit flows.  During the fiscal year ended June 30, 2002, it
appeared  that the overall  reduction  of  investment  in the stock  market also
helped to contribute to the increase in deposit balances.

The Company monitors its liquidity position on a daily basis.  Excess short-term
liquidity is usually invested in overnight  federal funds sold. In the event the
Company   requires  funds  beyond  its  ability  to  generate  them  internally,
additional  sources  of funds  are  available  through  the use of FHLB  advance
programs made  available to the Company.  During fiscal year 2002, the Company's
maximum borrowing reached $9.0 million and minimum amounted to $5.0 million from
the FHLB. The $9.0 million  borrowing at June 30, 2002 was a combination of $2.5
million,  which matures in September 2004, $2.5 million which matures in October
2005 and $4.0 million scheduled to mature in January 2003.

Loan  commitments  totaled $4.0  million at June 30, 2002 and were  comprised of
$3.7 million in commitments to originate  residential  loans and $0.3 million in
commercial  loan  commitments.  Another  $3.4 million in unused lines of credit,
including $1.4 million in commercial lines of credit, $0.8 in overdraft lines of
credit and $1.2 million in home equity lines of credit were  outstanding at June
30, 2002. The Company  anticipates  that it will have sufficient funds available
to meet current loan  commitments.  Time  accounts or  certificate  of deposits,
which are  scheduled to mature in one year or less from June 30,  2001,  totaled
$49.1  million.  Based upon the  Company's  experience  and its current  pricing
strategy,  management  believes that a significant portion of such deposits will
remain with the Company.

At June 30, 2002 and 2001, the Bank and Company exceeded all of their regulatory
capital  requirements,  as illustrated in the regulatory capital footnote within
the financial statements. Shareholders' equity represented 12.0% of total assets
at June 30, 2002, as compared to 13.6% at June 30, 2001.

The Company's  most liquid  assets are cash and cash  equivalent  accounts.  The
levels of these assets are  dependent  on the  Company's  operating,  financing,
lending and investing activities during any given period. At June 30, 2002, cash
and cash equivalents totaled $17.8 million, or 8.1% of total assets.











<PAGE>




























<TABLE>
<caption>


A summary of selected financial data at and for the fiscal quarter ends for the
years ended June 30, 2002 and 2001 is as follows:




                                                      First             Second            Third          Fourth
                                                     Quarter           Quarter           Quarter        Quarter
<S>                                                  <C>              <C>               <C>             <C>
(Dollars in thousands, except per share data)
FISCAL 2002
Loans receivable, net                                $115,734          $120,336           $125,478       $128,373
Deposits                                              159,654           165,918            175,673        183,714

Interest income                                         3,109             3,083              3,131          3,227
Net interest income                                     1,767             1,845              1,943          2,061
Provisions of loan losses                                  30                69                 60             60
Income before provision for income taxes                  473               530                608            642
Net income                                                344               381                468            460
Earnings per common share - Basic                        0.17              0.20               0.24           0.23
Earnings per common share - Diluted                     $0.17             $0.19              $0.23          $0.23


FISCAL 2001
Loans receivable, net                                 $98,914          $101,654           $103,832       $109,757
Deposits                                              132,749           136,025            140,955        154,193

Interest income                                         2,798             2,851              2,908          2,955
Net interest income                                     1,428             1,472              1,536          1,627
Provisions of loan losses                                  15                15                 15             15
Income before provision for income taxes                  260               373                248            292
Net income                                                212               250                212            282
Earnings per common share - Basic                        0.11              0.13               0.11           0.14
Earnings per common share - Diluted                     $0.11             $0.13              $0.11          $0.14


</table>

COMMON STOCK AND RELATED MATTERS

The Company's  common stock is listed on the NASDAQ  Small-Cap  Market under the
symbol  "GCBC".  As of August  1, 2002 the  Company  had six  registered  market
makers,  613 stockholders of record (excluding the number of persons or entities
holding  stock in street name through  various  brokerage  firms) and  2,024,835
shares  outstanding.  As of such date,  Greene County Bancorp,  MHC (the "Mutual
Company"),  the Company's mutual holding company held 1,152,316 shares of common
stock or 56.9% of total shares  outstanding.  Consequently,  shareholders  other
than the Mutual Company held 872,519 shares.

The  following  table sets forth high,  low,  closing  market price and dividend
information  of Greene County  Bancorp,  Inc.  common stock during the quarterly
periods  indicated  for the years  ended June 30, 2002 and 2001.  Closing  price
information is stated at the quarter end dates indicated. During the fiscal year
ended June 30,  2002,  the Mutual  Holding  Company  waived its right to receive
dividends under the provisions of its' OTS charter.


<PAGE>


<TABLE>
<caption>

                                                                           Semi-Annual
                                                                          Cash Dividend
                                High           Low           Close          Declared

<S>                            <C>           <C>            <C>           <C>
June 30, 2002                  $18.46        $17.00         $18.22           None
March 31, 2002                  19.75         14.75          17.99        $0.28/share
December 31, 2001               15.75         13.46          15.05           None
September 30, 2001              15.75         10.40          13.96        $0.25/share

June 30, 2001                   14.00          9.15          10.90           None
March 31, 2001                  10.50          9.06           9.88        $0.12/share
December 31, 2000               10.50          8.00           9.25           None
September 30, 2000              $9.13         $7.75          $8.50        $0.12/share


</TABLE>

Payment of dividends on the Company's  common stock is subject to  determination
and  declaration by the Board of Directors and depends upon a number of factors,
including  capital  requirements,  regulatory  limitations  on  the  payment  of
dividends,  the  Company's  results  of  operations,  financial  condition,  tax
considerations and general economic  conditions.  No assurance can be given that
dividends  will be declared or, if declared,  what the amount of dividends  will
be, or whether such dividends, once declared, will continue.

IMPACT OF INFLATION AND CHANGING PRICES

The  consolidated  financial  statements  of  the  Company  and  notes  thereto,
presented elsewhere herein, have been prepared in accordance with U.S. generally
accepted  accounting  principles,  which  requires the  measurement of financial
position  and  operating   results  in  terms  of  historical   dollars  without
considering the change in the relative  purchasing  power of money over time and
due to inflation.  The impact of inflation is reflected in the increased cost of
the  Company's  operations.  Unlike most  industrial  companies,  nearly all the
assets and liabilities of the Company are monetary. As a result,  interest rates
have a greater  impact  on the  Company's  performance  than do the  effects  of
general levels of inflation.  Interest rates do not necessarily move in the same
direction or to the same extent as the price of goods and services.

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS
In July 2001, the Financial Accounting Standards Board issued Statement No. 141,
"Business  Combinations",   which  requires  all  business  combinations  to  be
accounted for under the purchase  method of  accounting,  thus  eliminating  the
pooling of interest  method of  accounting.  The  adoption of this  statement in
fiscal 2002 had no impact on the Company's consolidated financial statements.

In July 2001, the Financial Accounting Standards Board issued Statement No. 142,
"Goodwill and Other  Intangible  Assets",  which  requires  acquired  intangible
assets (other than goodwill) to be amortized over their useful  economic  lives,
while  goodwill and any acquired  intangible  assets with an  indefinite  useful
economic life would not be amortized, but would be reviewed for impairment on an
annual basis based upon guidelines  specified by the statement.  The adoption of
this  statement  in fiscal 2003 is  expected to have no impact on the  Company's
consolidated financial statements.

In August 2001, the Financial  Accounting  Standards Board issued  Statement No.
143,  "Accounting  for Asset  Retirement  Obligations",  which requires the fair
value of a liability for an asset retirement  obligation to be recognized in the
period in which it is  incurred  if a  reasonable  estimate of fair value can be
made.  The  associated  asset  retirement  costs are  capitalized as part of the
carrying amount of long-lived assets. SFAS No. 143 is effective for fiscal years
beginning after June 15, 2002. The Company is currently reviewing this statement
to determine its effect on the Company's financial statements.

In August 2001, the Financial  Accounting  Standards Board issued  Statement No.
144,  "Accounting  for the Impairment or Disposal of Long-Lived  Assets",  which
supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for  Long-Lived  Assets to be Disposed  of", and the  accounting  and  reporting
provisions  of APB No.  30.  SFAS No. 144  addresses  financial  accounting  and
reporting for the  impairment or disposal of long-lived  assets and is effective
for fiscal years  beginning  after December 15, 2001, and interim periods within
those fiscal years.  The adoption of this statement in fiscal 2002 had no impact
on the Company's consolidated financial statements.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities,"  which replaces  Emerging  Issues Task Force
("EITF") Issue No. 94-3, "Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity  (including  Certain Costs Incurred
in a Restructuring)."  Under SFAS No. 146, liabilities for costs associated with
an  exit or  disposal  activity  are to be  recognized  when  the  liability  is
incurred.  Under EITF Issue No.  94-3,  liabilities  related to exit or disposal
activities  were  recognized  when  an  entity  committed  to an exit  plan.  In
addition,  Statement  No. 146  establishes  that the  objective  for the initial
measurement  of the liability is fair value.  Statement No. 146 is effective for
exit and disposal  activities  initiated after December 31, 2002. The Company is
currently  evaluating the impact the adoption of this statement will have on its
financial statements but does not believe it will be material.

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This annual report contains forward-looking  statements.  The Company desires to
take  advantage  of the  "safe  harbor"  provisions  of the  Private  Securities
Litigation  Reform Act of 1995 and is including  this  statement for the express
purpose of availing itself of the protections of the safe harbor with respect to
all such forward-looking statements. These forward-looking statements, which are
included in this  Management's  Discussion  and Analysis  and  elsewhere in this
annual  report,  describe  future plans or strategies  and include the Company's
expectations  of  future  financial  results.  The  words  "believe,"  "expect,"
"anticipate,"   "project,"  and  similar  expressions  identify  forward-looking
statements.  The  Company's  ability to predict  results or the effect of future
plans or strategies or qualitative or quantitative  changes based on market risk
exposure is  inherently  uncertain.  Factors  that could affect  actual  results
include but are not limited to:


<table>

<S>   <C>
(a)   changes in general market interest rates,
(b)   general economic conditions,
(c)   legislative and regulatory changes,
(d)   monetary and fiscal policies of the U.S. Treasury and the Federal Reserve,
(e)   changes in the quality or composition of the Company's loan and investment
      portfolios,
(f)   deposit flows,
(g)   competition, and
(h)   demand for financial services in the Company's market area.


</TABLE>

These factors should be considered in evaluating the forward-looking statements,
and undue  reliance  should not be placed on such  statements,  since results in
future periods may differ  materially from those currently  expected  because of
various risks and uncertainties.


<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS


PricewaterhouseCoopers LLP
State Street Centre
at 80 State Street
Albany NY 12207-2591
Telephone (518) 462 2030
Facsimile (518) 427 4499


To the Board of Directors and Shareholders
Greene County Bancorp, Inc.

In our opinion, the accompanying  consolidated statements of financial condition
and the related consolidated statements of income, comprehensive income, changes
in  shareholders'  equity  and of cash flows  present  fairly,  in all  material
respects,  the  financial  position  of  Greene  County  Bancorp,  Inc.  and its
subsidiary at June 30, 2002 and 2001,  and the results of their  operations  and
their  cash  flows  for the  years  then  ended in  conformity  with  accounting
principles  generally accepted in the United States of America.  These financial
statements   are  the   responsibility   of  the   Company's   management;   our
responsibility  is to express an opinion on these financial  statements based on
our audits.  We conducted  our audits of these  statements  in  accordance  with
auditing  standards  generally  accepted in the United States of America,  which
require that we plan and perform the audit to obtain reasonable  assurance about
whether the financial  statements  are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.


/s/PricewaterhouseCoopers  LLP

July 26, 2002


<PAGE>








<TABLE>
<caption>
                           Greene County Bancorp, Inc.
                 Consolidated Statements of Financial Condition
                          As of June 30, 2002 and 2001

                                                                       June 30, 2002              June 30, 2001
                                                                       -------------              -------------
<S>                                                                    <C>                       <C>
ASSETS
Cash and due from banks                                                   $7,408,150                  $5,336,195
Federal funds sold                                                        10,423,871                  13,468,163
                                                                       -------------             ---------------

    Total cash and cash equivalents                                       17,832,021                  18,804,358

Investment securities, at fair value                                      66,088,530                  48,875,229
Federal Home Loan Bank stock, at cost                                      1,121,100                     939,600

Loans                                                                    129,727,150                 110,920,369
Less: Allowance for loan losses                                           (1,068,734)                   (886,081)
         Unearned origination fees and costs, net                           (285,132)                   (277,277)
                                                                       -------------             ---------------

    Net loans receivable                                                 128,373,284                 109,757,011

Premises and equipment                                                     4,963,621                   5,052,208
Accrued interest receivable                                                1,452,104                   1,357,239
Prepaid expenses and other assets                                            296,691                     288,914
Other real estate owned                                                       30,229                      30,229
                                                                       -------------             ---------------

               Total assets                                             $220,157,580                $185,104,788
                                                                       =============             ===============


LIABILITIES AND SHAREHOLDERS' EQUITY
Non-interest bearing deposits                                            $22,067,347                 $18,418,308
Interest bearing deposits                                                161,646,281                 135,774,206
                                                                       -------------             ---------------

    Total deposits                                                       183,713,628                 154,192,514

Borrowings from FHLB                                                       9,000,000                   5,000,000
Accrued expenses and other liabilities                                       911,959                     623,038
Accrued income taxes                                                         131,287                     195,646
                                                                       -------------             ---------------

                Total liabilities                                        193,756,874                 160,011,198

Shareholders' equity
Preferred stock,
  Authorized 1,000,000 at June 30, 2002 and 2001;                                ---                         ---
Common stock, par value $.10 per share;
   Authorized: 12,000,000 at June 30, 2002 and 2001;
   Issued: 2,152,835 at June 30, 2002 and 2001
   Outstanding: 2,024,835 at June 30, 2002;
                        2,040,355 at June 30, 2001                           215,284                     215,284
Additional paid-in capital                                                10,084,621                  10,188,573
Retained earnings                                                         17,164,403                  15,993,025
Accumulated other comprehensive income                                       880,401                     499,022
Less: Treasury stock, 128,000 at June 30, 2002;
                      112,480 at June 30, 2001,  shares at cost           (1,371,527)                 (1,075,923)

         Unearned stock-based compensation                                  (156,791)                   (229,753)
         Unearned ESOP shares 49,972  at June 30, 2002;
                58,516 at June 30, 2001, shares at cost                     (415,685)                   (496,638)

                                                                       -------------             ----------------
               Total shareholders' equity                                 26,400,706                  25,093,590

                                                                       -------------             ----------------
               Total liabilities and shareholders' equity               $220,157,580                $185,104,788
                                                                       =============             ================

See notes to consolidated financial statements.

</TABLE>


<PAGE>













<TABLE>
<caption>



                           Greene County Bancorp, Inc.
                        Consolidated Statements of Income
                   For the Years Ended June 30, 2002 and 2001

                                                                                2002                      2001
                                                                                ----                      ----
<S>                                                                      <C>                         <C>
Interest income:
    Loans                                                                    $9,080,523               $7,883,669
    Investment securities                                                     1,963,241                2,220,765
    Mortgage-backed securities                                                  758,010                  440,407
    Tax free securities                                                         427,803                  458,289
    Interest bearing deposits and federal funds sold                            320,32                   509,241
                                                                    -------------------        -----------------
Total interest income                                                        12,549,899               11,512,371

Interest expense:
    Interest on deposits                                                      4,553,485                4,855,977
    Interest on borrowings                                                      380,820                  592,516
                                                                    -------------------        -----------------
Total interest expense                                                        4,934,305                5,448,493

Net interest income                                                           7,615,594                6,063,878
Less: Provision for loan losses                                                 218,900                   60,000
                                                                    -------------------        -----------------


Net interest income after provision for loan losses                           7,396,694               6,003,878
                                                                    -------------------        -----------------


Noninterest income:
    Service charges on deposit accounts                                       1,127,031                  543,194
    Other operating income                                                      712,841                  553,593
                                                                    -------------------        -----------------
Total noninterest income                                                      1,839,872                1,096,787

Noninterest expense:
    Salaries and employee benefits                                            3,355,992                2,985,933
    Occupancy expense                                                           365,642                  344,781
    Equipment and furniture expense                                             465,744                  436,528
    Service and data processing fees                                            636,371                  552,640
    Office supplies                                                             156,933                  123,783
    Other                                                                     2,002,972                1,484,148
                                                                    -------------------        -----------------

Total noninterest expense                                                     6,983,654                5,927,813

Income before provision for income taxes                                      2,252,912                1,172,852

Provision for income taxes:
    Current                                                                     560,114                  283,879
    Deferred                                                                     40,086                  (67,380)
                                                                    -------------------        -----------------

Total provision for income taxes                                                600,200                  216,499
                                                                    -------------------        -----------------


Net income                                                                   $1,652,712                 $956,353
                                                                    ===================        =================


Basic EPS                                                                         $0.84                    $0.48
Basic average shares outstanding                                              1,962,228                1,978,165

Diluted EPS                                                                       $0.82                    $0.48
Diluted average shares outstanding                                            2,016,031                2,001,331
See notes to consolidated financial statements.


</table>

<PAGE>







<TABLE>
<caption>



                           Greene County Bancorp, Inc.
                 Consolidated Statements of Comprehensive Income
                   For the Years Ended June 30, 2002 and 2001


                                                                                         2002                  2001
                                                                                         ----                  ----
<S>                                                                                 <C>                   <C>
Net income                                                                             $1,652,712             $956,353

Other comprehensive income:

    Unrealized holding gain arising during the years ended June 30, 2002
      and 2001, net of tax expense
      of $261,853 and $720,594, respectively.                                             392,788            1,040,419

    Reclassification adjustment arising during the years
      ended June 30, 2002 and 2001, net of tax expense
      of  $7,606 and $12,712, respectively.                                               (11,409)             (16,851)
                                                                                    -------------         ------------



Total other comprehensive income                                                          381,379            1,023,568
                                                                                    -------------         ------------


Comprehensive income                                                                   $2,034,091           $1,979,921
                                                                                    =============         ============

</TABLE>

See notes to consolidated financial statements.


<PAGE>


















































<TABLE>
<caption>




                           Greene County Bancorp, Inc.
           Consolidated Statements of Changes in Shareholders' Equity
                   For the Years Ended June 30, 2002 and 2001

                                                                                    Accumulatd
                                                   Additional                          Other
                                     Capital       Paid - In         Retained      Comprehensive
                                      Stock         Capital          Earnings         Income
<S>                                <C>            <C>              <C>             <C>
Balance at
June 30, 2000                         $215,284     $10,319,859     $15,526,092        ($524,546)

ESOP shares earned                                       1,652

MRP shares issued                                     (115,928)

Stock-based
compensation
earned

Stock-based
compensation
forfeited                                              (17,010)

Common stock
repurchased

Dividends paid                                                        (489,420)

Net income                                                             956,353

Change in unrealized
gain, net                                                                             1,023,568


                                   -----------    ------------     -----------     ------------
Balance at
June 30, 2001                          215,284      10,188,573      15,993,025          499,022
                                   ===========    ============     ===========     ============




ESOP shares earned                                      32,501

MRP shares issued                                    (100,674)

Options exercised                                     (35,779)

Stock-based
compensation
earned

Common stock
repurchased

Dividends paid                                                        (481,334)

Net income                                                           1,652,712

Change in unrealized
gain, net                                                                               381,379

                                   -----------    ------------     -----------     ------------

Balance at
June 30, 2002                         $215,284     $10,084,621     $17,164,403         $880,401
                                   ===========    ============     ===========     ============

















                                                    Unearned        Unearned           Total
                                    Treasury       Stock-based        ESOP         Shareholders'
                                      Stock          Stock           Shares           Equity
Balance at
June 30, 2000                      ($1,019,976)      ($333,690)      ($589,074)     $23,593,949

ESOP shares earned                                                      92,436           94,088

MRP shares issued                      115,928                                              ---

Stock-based
compensation
earned                                                  86,927                           86,927

Stock-based
compensation
forfeited                                               17,010                              ---

Common stock
repurchased                           (171,875)                                        (171,875)

Dividends paid                                                                         (489,420)

Net income                                                                              956,353

Change in unrealized
gain, net                                                                             1,023,568
                                   -----------    ------------     -----------     ------------

Balance at
June 30, 2001                       (1,075,923)       (229,753)       (496,638)      25,093,590
                                   ===========    ============     ===========     ============




ESOP shares earned                                                      80,953          113,454

MRP shares issued                      100,674                                              ---

Options exercised                      134,847                                           99,068

Stock-based
compensation
earned                                                  72,962                           72,962

Common stock
repurchased                           (531,125)                                        (531,125)

Dividends paid                                                                         (481,334)

Net income                                                                            1,652,712

Change in unrealized
gain, net                                                                               381,379
                                   -----------    ------------     -----------     ------------

Balance at
June 30, 2002                      ($1,371,527)      ($156,791)      ($415,685)     $26,400,706
                                   ===========    ============     ===========     ============
</table>



See notes to consolidated financial statements.



<PAGE>


<table>
<caption>

                           Greene County Bancorp, Inc.
                      Consolidated Statements of Cash Flows
                   For the Years Ended June 30, 2002 and 2001
                                                                           2002                   2001
                                                                           ----                   ----
<S>                                                                   <C>                    <C>
Cash flows from operating activities:
Net Income                                                                $1,652,712            $956,353
Adjustments to reconcile net income to cash provided by
operating activities:
     Depreciation                                                            475,844             427,359
      Deferred income tax expense (benefit)                                   40,086             (67,380)
     Net amortization of premiums and discounts                              (38,303)             15,769
     Provision for loan losses                                               218,900              60,000
     ESOP and other stock-based compensation earned                          186,416             164,005
     Net (gain)loss on sale of investments                                   (19,015)              9,437
     Gain on sale of other real estate                                       (22,259)             (6,158)
     Net decrease in accrued income taxes                                    (64,359)            (28,921)
     Net increase in accrued interest receivable                             (94,865)           (192,504)
     Net increase in prepaid and other assets                                (47,862)             66,836
     Net increase in other liabilities                                        34,671               8,794
                                                                      --------------         -----------

          Net cash provided by operating activities                        2,321,966           1,413,590

Cash flows from investing activities:
     Proceeds from maturities of securities                                5,815,123          10,695,827
     Proceeds from sale of securities                                      1,010,105           2,966,765
     Purchases of securities and other investments                       (15,827,979)        (14,353,814)
     Purchases of mortgage-backed securities                             (16,186,410)         (5,998,960)
     Principal payments on securities                                      3,018,642           2,297,266
     Principal payments on mortgage-backed securities                      5,456,106           3,122,711
     Proceeds from sale of other real estate                                 109,458             335,291
     Net increase in loans receivable                                    (18,922,372)        (12,192,947)
     Purchases of premises and equipment                                    (374,699)           (365,947)
                                                                      --------------         -----------

          Net cash used by investing activities                          (35,902,026)        (13,493,808)

Cash flows from financing activities:
     Borrowings from (payments to) FHLB                                    4,000,000          (5,000,000)
     Purchases of treasury stock                                            (531,125)           (171,875)
     Payment of cash dividend                                               (481,334)           (489,420)
     Proceeds from issuance of stock options                                  99,068                 ---
     Net increase in deposits                                             29,521,114          20,732,266
                                                                      --------------         -----------

          Net cash provided by financing activities                       32,607,723          15,070,971

Net (decrease) increase cash and cash equivalents                           (972,337)          2,990,753

Cash and cash equivalents at beginning of period                          18,804,358          15,813,605
                                                                      --------------         -----------


Cash and cash equivalents at end of period                               $17,832,021         $18,804,358
                                                                      ==============         ===========

Cash paid during period for:
     Interest                                                             $4,922,558          $5,480,567
     Income taxes                                                           $664,559            $215,420

Non-cash investing activities:
  Foreclosed loans transferred to other real estate                          $87,199            $194,564
  Change in unrealized gain securities                                      $650,838          $1,756,874


</table>
See notes to consolidated financial statements


<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Summary of significant accounting policies

Basis of Presentation

The  consolidated  financial  statements  include the accounts of Greene  County
Bancorp, Inc. (the "Company") and its subsidiary, The Bank of Greene County (the
"Bank").  All  material   inter-company  accounts  and  transactions  have  been
eliminated.  Amounts in the prior year's consolidated  financial statements have
been  reclassified   whenever   necessary  to  conform  to  the  current  year's
presentation.  These  reclassifications  had no effect on net income or retained
earnings  as  previously  reported.  The  accompanying   consolidated  financial
statements have been prepared in conformity with generally  accepted  accounting
principles.

Nature of Operations

The Bank has six full service  offices and an operations  center  located in its
market area  consisting of Greene County and southern  Albany County,  New York.
The Bank is primarily  engaged in the business of  attracting  deposits from the
general public in the Bank's market area, and investing such deposits,  together
with other sources of funds, in loans and investment securities.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting  period.  Actual results could differ from those estimates.
Material  estimates that are particularly  susceptible to significant  change in
the near term relate to the  determination  of the allowance for loan losses and
valuation of other real estate owned ("OREO").

While  management  uses available  information to recognize  losses on loans and
OREO,  future additions to the allowance for loan losses (the  "Allowance"),  or
OREO  write-downs,  may be  necessary  based on changes in economic  conditions,
asset quality or other factors. In addition, various regulatory authorities,  as
an integral part of their examination process, periodically review the Company's
Allowance and the carrying value of OREO and other assets.  Such authorities may
require the Company to recognize  additions to the  Allowance  and/or write down
the  carrying  value  of OREO or  other  assets  based  on  their  judgments  of
information available to them at the time of their examination.

Charter Conversion

On August 15, 2000, the Board of Directors of the Company unanimously approved a
plan to convert the Company's charter from a Delaware  corporation  regulated by
the New York  Superintendent  of Banks and the Board of Governors of the Federal
Reserve  System  to a  Federal  corporation  regulated  by the  Office of Thrift
Supervision  (the  "OTS").  On April  2,  2001,  the OTS  approved  the  charter
conversion,  which was approved by the  stockholders  of the Company on November
27, 2000.  The mutual  holding  company (the "MHC") of the company also received
OTS approval of its conversion from a state to federal charter on that date.

Among other  things,  the  charter  conversions  permitted  the MHC to waive the
receipt  of  dividends  paid by the  Company  without  causing  dilution  to the
ownership  interest of the  Company's  minority  stockholders  in the event of a
conversion  of the MHC to stock form.  The waiving of  dividends  will  increase
Company  resources  available  for stock  repurchases,  payment of  dividends to
minority stockholders, and investments.

As a  financial  institution  subsidiary  of the Company  following  the charter
conversion, the Bank must maintain at least 65% of its "portfolio assets" (total
assets minus goodwill and other intangible assets, office property and specified
liquid  investments  up to 20% of total  assets)  in certain  "qualified  thrift
investments"  (primarily  loans to purchase,  refinance,  construct,  improve or
repair domestic residential housing, home equity loans,  securities backed by or
representing  an interest in  mortgages  on domestic  residential  housing,  and
Federal Home Loan Bank stock) in at least 9 months out of every 12 month period.
A savings  institution that fails the qualified thrift lender test is subject to
certain operating restrictions and may be required to convert to a bank charter.
At June 30, 2002, the Bank maintained 71.7% of its portfolio assets in qualified
thrift investments.

Liquidation Account

The Bank established a liquidation account, as of December 31, 1998, as a result
of the  conversion to capital stock form of  organization  from a mutual savings
bank, in the amount of $15.7  million,  equal to its net worth as of the date of
the latest consolidated statements of financial condition appearing in the final
prospectus.  The  liquidation  account is maintained for the benefit of eligible
pre-conversion  account  holders who continue to maintain  their accounts at the
Bank  after the date of  conversion.  The  liquidation  account  will be reduced
annually  to the  extent  that  eligible  account  holders  have  reduced  their
qualifying deposits as of each anniversary date.  Subsequent  increases will not
restore an eligible account holder's interest in the liquidation account. In the
event of a complete liquidation,  each eligible account holder will be entitled,
under New York State Law, to receive a distribution from the liquidation account
in an amount  equal to their  current  adjusted  account  balances  for all such
depositors then holding qualifying deposits in the Bank.

Cash and Cash Equivalents

Cash  and  cash  equivalents  include  cash on hand,  amounts  due  from  banks,
interest-bearing  deposits at other financial  institutions,  investments  (with
original  maturity of three months or less),  and overnight  federal funds sold.
The carrying amounts reported in the balance sheet for cash and cash equivalents
approximate those assets' fair values.  The amounts of interest bearing deposits
included  as cash  equivalents  at June 30, 2002 and 2001 were  $10,573,000  and
$13,895,000, respectively.

Investment securities

The Company has  classified  its  investments  in debt and equity  securities as
available for sale.  Available for sale  securities  are reported at fair value,
with net  unrealized  gains and  losses  reflected  as a separate  component  of
shareholders' equity, net of applicable income taxes.

Realized gains or losses on investment  security  transactions  are based on the
specific  identification  method and are reported in earnings and computed using
the specific identification cost basis. Fair values of investment securities are
based on quoted market prices,  where  available.  Amortization of bond premiums
and  accretion of bond  discounts  are  amortized  over the expected life of the
investment.  Any  security  for  which  there has been an other  than  temporary
impairment  of value is written down to estimated  market value through a charge
to earnings.

Loans

Loans are  stated at unpaid  principal  balances,  less the  allowance  for loan
losses and net deferred loan  origination  fees and costs.  Interest on loans is
accrued and  credited to income  based upon the  principal  amount  outstanding.
Unearned  discount on installment loans is recognized as income over the term of
the loan,  principally  using a method that  approximates  the  effective  yield
method.  Nonrefundable  loan fees and  related  direct  costs are  deferred  and
amortized  over the life of the loan as an  adjustment  to loan yield  using the
effective interest method.

Allowance for loan losses

The  allowance  for loan losses is  maintained  by a provision  for loan losses,
charged to expense,  and reduced by net charge-offs.  The level of the allowance
is based on management's evaluation of the collectibility of the loan portfolio,
including  the  nature  of  the  portfolio,  credit  concentrations,  trends  in
historical loss experience,  specific  impaired loans, and economic  conditions.
The Bank  considers  residential  mortgages,  home equity loans and  installment
loans to  customers  as  small,  homogeneous  loans,  which  are  evaluated  for
impairment collectively based on historical loss experience. Commercial mortgage
and business  loans are viewed  individually  and  considered  impaired if it is
probable  that  the Bank  will  not be able to  collect  scheduled  payments  of
principal and interest when due,  according to the contractual terms of the loan
agreements.  The  measurement of impaired  loans is generally  based on the fair
value of the underlying collateral.

Income Recognition on Impaired and Nonaccrual loans

The Bank generally places a loan, including impaired loans, on nonaccrual status
when it is specifically determined to be impaired or when principal and interest
is delinquent for 90 days or more.  Any unpaid  interest  previously  accrued on
these loans is reversed from income.  When a loan is specifically  determined to
be impaired,  collection of interest and  principal  are generally  applied as a
reduction to principal  outstanding.  Interest income on all nonaccrual loans is
recognized on a cash basis.

Other Real Estate Owned (OREO)

OREO  consists  of  properties   acquired   through  mortgage  loan  foreclosure
proceedings  or in full or  partial  satisfaction  of loans.  OREO is  initially
recorded  at the lower of cost or fair value (less  estimated  costs to sell) at
the date the  collateral  is  acquired  and any  difference  is  charged  to the
Allowance for loan loss at this time. Subsequently, management reviews the value
of such collateral and write-downs, if any, are charged to expense. All expenses
and income  related to OREO are included in the net cost of operations  and real
estate owned in the Company's Consolidated Financial Statements.

Premises and Equipment

Premises  and  equipment  are  stated  at cost  less  accumulated  depreciation.
Depreciation  is computed using  principally the  straight-line  method over the
estimated  useful  lives of the  related  assets  (39  years  for  building  and
improvements,  3-8 years for furniture and  equipment).  Maintenance and repairs
are typically  charged to expense when incurred.  Gains and losses from sales or
other dispositions of depreciable property are included in current operations.

Treasury Stock

Common stock  repurchases  are recorded at cost and then held as treasury  stock
for  investment  or  subsequent  issuance.  From time to time,  the  Company may
repurchase  shares of  common  stock if, in its  judgment,  such  shares  are an
attractive investment, in view of the current price at which the common stock is
trading relative to the Company's  earnings per share,  book value per share and
general market and economic factors.  Common stock may also be acquired in order
to have shares  available  for issuance  under the  Management  Recognition  and
Retention  Plan or the Stock Option Plan.  During fiscal year 2002,  the Company
repurchased  37,500 shares of common stock at an average cost of $14.16.  During
fiscal year 2001, the Company  repurchased  17,000 shares of stock at an average
cost of $10.11.  During  fiscal year 2002,  the Company  issued 21,980 shares of
stock from  treasury  shares,  12,580 due to options being  exercised  under the
Stock Option Plan and 9,400 due to vesting under the Management  Recognition and
Retention Plan. Consequently,  the number of treasury shares held by the Company
at June 30, 2002 was 128,000.




Income Taxes

Provisions for income taxes are based on taxes  currently  payable or refundable
and  deferred  income taxes on  temporary  differences  between the tax basis of
assets and liabilities and their reported  amounts in the financial  statements.
Deferred tax assets and liabilities are reported in the financial  statements at
currently  enacted  income  tax  rates  applicable  to the  period  in which the
deferred tax assets and  liabilities  are expected to be realized or settled.  A
valuation account was established during the fiscal year ended June 30, 2001, in
connection  with  potential  loss  of a  tax  benefit  associated  with  a  past
charitable  contribution for which certain limitations and time restrictions are
relevant.

Earnings Per Share

Basic EPS is computed by dividing net income by the weighted  average  number of
common shares outstanding during the period.  Shares of restricted stock are not
considered  outstanding  for the  calculation  of basic earnings per share until
they become  fully  vested.  Diluted  earnings per share is computed in a manner
similar to that of basic  earnings  per share  except that the  weighted-average
number of common  shares  outstanding  is  increased  to  include  the number of
incremental  common shares that would have been  outstanding  under the treasury
stock method if all  potentially  dilutive  common shares (such as stock options
and  unvested   restricted  stock)  issued  became  vested  during  the  period.
Unallocated   common   shares  held  by  the  ESOP  are  not   included  in  the
weighted-average  number of common  shares  outstanding  for either the basic or
diluted earnings per share calculations.

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board issued Statement No. 141,
"Business  Combinations",   which  requires  all  business  combinations  to  be
accounted for under the purchase  method of  accounting,  thus  eliminating  the
pooling of interest  method of  accounting.  The  adoption of this  statement in
fiscal 2002 had no impact on the Company's consolidated financial statements.

In July 2001, the Financial Accounting Standards Board issued Statement No. 142,
"Goodwill and Other  Intangible  Assets",  which  requires  acquired  intangible
assets (other than goodwill) to be amortized over their useful  economic  lives,
while  goodwill and any acquired  intangible  assets with an  indefinite  useful
economic life would not be amortized, but would be reviewed for impairment on an
annual basis based upon guidelines  specified by the statement.  The adoption of
this  statement  in fiscal 2003 is  expected to have no impact on the  Company's
consolidated financial statements.

In August 2001, the Financial  Accounting  Standards Board issued  Statement No.
143,  "Accounting  for Asset  Retirement  Obligations",  which requires the fair
value of a liability for an asset retirement  obligation to be recognized in the
period in which it is  incurred  if a  reasonable  estimate of fair value can be
made.  The  associated  asset  retirement  costs are  capitalized as part of the
carrying amount of long-lived assets. SFAS No. 143 is effective for fiscal years
beginning after June 15, 2002. The Company is currently reviewing this statement
to determine its effect on the Company's financial statements.

In August 2001, the Financial  Accounting  Standards Board issued  Statement No.
144,  "Accounting  for the Impairment or Disposal of Long-Lived  Assets",  which
supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for  Long-Lived  Assets to be Disposed of ", and the  accounting  and  reporting
provisions  of APB No.  30.  SFAS No. 144  addresses  financial  accounting  and
reporting for the  impairment or disposal of long-lived  assets and is effective
for fiscal years  beginning  after December 15, 2001, and interim periods within
those fiscal years.  The adoption of this statement in fiscal 2002 had no impact
on the Company's consolidated financial statements.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities,"  which replaces  Emerging  Issues Task Force
("EITF") Issue No. 94-3, "Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity  (including  Certain Costs Incurred
in a Restructuring)."  Under SFAS No. 146, liabilities for costs associated with
an  exit or  disposal  activity  are to be  recognized  when  the  liability  is
incurred.  Under EITF Issue No.  94-3,  liabilities  related to exit or disposal
activities  were  recognized  when  an  entity  committed  to an exit  plan.  In
addition,  Statement  No. 146  establishes  that the  objective  for the initial
measurement  of the liability is fair value.  Statement No. 146 is effective for
exit and disposal  activities  initiated after December 31, 2002. The Company is
currently  evaluating the impact the adoption of this statement will have on its
financial statements but does not believe it will be material.

Note 2.  Balance at other banks

The Bank is required to maintain  certain reserves of vault cash and/or deposits
with the  Federal  Reserve  Bank.  The  amount  of this  daily  average  reserve
requirement,  included in cash and due from banks,  was $828,000 and $590,000 at
June 30, 2002 and 2001, respectively.

Note 3.  Investment Securities

Securities available-for-sale at June 30, 2002, consisted of the following:

<table>
<caption>
                                                                  Gross              Gross         Estimated
                                             Amortized         Unrealized         Unrealized         Fair
                                               Cost              Gains              Losses           Value
<S>                                         <C>              <C>                 <C>              <C>
U.S. Treasury                                      $---              $---              $---              $---
U.S. Government agencies                     14,774,727            88,222             1,436        14,861,513
State and political subdivisions              8,501,654           308,846               ---         8,810,500
Mortgage-backed securities                   19,358,992           213,242             8,482        19,563,752
Asset-backed securities                         804,773            13,647               336           818,084
Corporate debt securities                    19,909,569           887,135            36,218        20,760,486
                                            -----------      -------------       ------------     ------------

Total debt securities                        63,349,715         1,511,092            46,472        64,814,335
Other securities                              1,273,895               300               ---         1,274,195
                                            -----------      -------------       ------------     ------------

Total securities available-for-sale         $64,623,610        $1,511,392           $46,472       $66,088,530
                                            ===========      =============       ============     ============
</TABLE>

Securities available-for-sale at June 30, 2001, consisted of the following:

<table>
<caption>
                                                                Gross                Gross          Estimated
                                              Amortized       Unrealized          Unrealized           Fair
                                                Cost            Gains                Losses            Value
                                            -----------      ------------        ------------     -----------
<S>                                          <C>             <C>                <C>                <C>
U.S. Treasury                                $1,000,073           $4,617             $---           $1,004,690
U.S. Government agencies                      1,751,099           43,326              ---            1,794,425
State and political subdivisions              9,247,047          172,651              ---            9,419,698
Mortgage-backed securities                    8,673,758          112,720             3,035           8,783,443
Asset-backed securities                       3,263,525           36,612                37           3,300,100
Corporate debt securities                    22,969,600          474,370            11,928          23,432,042
                                            -----------      ------------        ------------     ------------

Total debt securities                        46,905,102          844,296            15,000          47,734,398
Other securities                              1,140,831             ---               ---            1,140,831
                                            -----------      ------------        ------------     ------------
Total securities available-for-sale         $48,045,933         $844,296           $15,000         $48,875,229
                                            ===========      ============        ============     ============
</table>
























<PAGE>


The  estimated  fair value of debt  securities  at June 30, 2002 by  contractual
maturity  are shown  below.  Expected  maturities  may differ  from  contractual
maturities,  because  issuers  may have the right to call or prepay  obligations
with or without call or prepayment penalties.

<table>
<caption>
                                                            After                After
                                           In               One Year          Five Years
                                          One Year          Through             Through             After
                                         Or Less           Five Years          Ten Years          Ten Years           Total
                                       -------------     -------------      --------------     --------------     ------------

<S>                                    <C>               <C>                <C>                <C>                <C>
U.S. Treasury                                  $---               $---               $---               $---            $---
U.S. Government agencies                        ---         14,861,513                ---                ---        14,861,513
State and political subdivisions          1,073,583          5,860,047          1,876,870                ---         8,810,500
Mortgage-backed securities                   27,834          1,349,798          2,880,093         15,306,027        19,563,752
Asset-backed securities                      74,603                ---                ---            743,481           818,084
Corporate debt securities                 4,931,443         15,829,043                ---                ---        20,760,486
                                       ------------      -------------      --------------     --------------     ------------

Total debt securities                     6,107,463         37,900,401          4,756,963         16,049,508        64,814,335
Other securities                            215,909          1,058,286                ---                ---         1,274,195
                                      --------------     -------------      --------------     --------------     ------------

Totalsecuritiesavailable-for-sale        $6,323,372        $38,958,687         $4,756,963        $16,049,508       $66,088,530
                                      ==============     =============      ==============     ==============     ============
Weighted average yield                         5.82%              5.00%              5.16%              3.65%             4.76%

</table>
During  fiscal  year  2002,  the  proceeds  from  sales  of   available-for-sale
securities were $1,010,000.  The gross realized gain was $19,015.  During fiscal
year  2001,  the  proceeds  from  sales of  available-for-sale  securities  were
$1,917,765.  The gross  realized  loss was $14,709 and gross  realized  gain was
$44,272.  During fiscal year 2001,  purchased  mortgage  servicing  rights sales
amounted to $1,049,000 at a loss of $39,000.

As of June 30, 2002,  securities  worth  $200,000 were pledged as collateral for
deposits  in excess of $100,000 of a local  not-for-profit  organization.  There
were no pledged  securities at June 30, 2001. The Company did not participate in
any securities  lending  programs during the fiscal years ended June 30, 2002 or
2001.


Note 4.  Loans

Major classifications of loans at June 30, 2002 and 2001 are
summarized as follows:







<TABLE>


                                                2002                               2001

<S>                                        <C>                              <C>
Real estate mortgage loans:
    Residential                              $103,494,360                      $89,527,698
    Commercial                                  8,763,563                        5,239,299
Home equity loans                               6,957,116                        6,138,758
Commercial loans                                4,356,299                        3,290,951
Installment loans to individuals                5,611,090                        6,127,609
Passbook loans to individuals                     544,722                          596,054
                                           --------------                   --------------

Total loans                                  $129,727,150                     $110,920,369
                                           ==============                   ==============


</table>
At June 30, 2002 and 2001, loans to officers and directors were not significant.

Changes in the allowance for loan losses for the respective periods ended
June 30 were as follows:



<table>
                                                 2002                             2001
<S>                                         <C>                             <C>
Balance, beginning of year                       $886,081                         $866,443
Provision charged to expense                      218,900                           60,000
Loans charged off                                 (52,257)                         (76,915)
Recoveries                                         16,010                           36,553
                                           --------------                   ---------------

Balance, at end of year                        $1,068,734                         $886,081
                                           ==============                   ===============
</table>

During fiscal years 2002 and 2001, the Bank had no impaired  loans,  accordingly
no specific valuation for impaired loans was recorded. Nonaccrual loans amounted
to $363,000 at June 30, 2002 and $774,000 at June 30, 2001.

Note 5.  Premises and Equipment

A summary of premises and equipment at June 30, 2002 and 2001, is as follows:


<table>

                                                 2002                             2001
<S>                                         <C>                             <C>
Land                                             $655,735                         $608,738
Building and improvements                       4,043,799                        4,034,337
Furniture and equipment                         3,093,194                        3,127,983
                                           --------------                   ---------------

Less: accumulated depreciation                 (2,829,107)                      (2,718,850)
                                           --------------                   --------------

Total premises and equipment                   $4,963,621                       $5,052,208
                                           ==============                   ===============
</table>

During the fiscal year ended June 30, 2002, the Company  disposed of $366,000 of
fixed assets. There were no corresponding gains or losses on such disposals.

Note 6.  Deposits

Major classifications of deposits at June 30, 2002 and 2001 are summarized as
follows:

<table>
                                                  2002                            2001
<S>                                        <C>                              <C>
Noninterest bearing checking                  $22,067,347                      $18,418,308
                                           --------------                   --------------
Interest bearing deposits:
  Certificates of deposit                      62,644,550                       58,112,695
  Savings accounts                             70,824,754                       57,021,446
  Money market deposit accounts                13,883,447                        9,193,801
  NOW accounts                                 14,293,530                       11,446,264
                                           --------------                   --------------

Total interest bearing deposits               161,646,281                      135,774,206

Total deposits                               $183,713,628                     $154,192,514
                                           ==============                   ==============
</table>









The following indicates the amount of the Bank's certificates of deposit by time
remaining to maturity as of June 30, 2002 and June 30, 2001.
<table>
<caption>

                                               3months        3 to 6        7 to 12       Over 12
                                               Or less        Months         Months        Months         Total
<S>                                          <C>             <C>           <C>            <C>            <C>
(Dollars in thousands)
As of June 30, 2002
Certificates of deposit less than $100,000      $14,084       $14,804        $14,133       $12,044         $55,065
Certificates of deposit $100,000 or more          2,971         2,210            923         1,476          7,580
                                             ----------      --------      ---------      --------       ---------

Total certificates of deposit                   $17,055       $17,014        $15,056       $13,520         $62,645
                                             ==========      ========      =========      ========       ==========

As of June 30, 2001
Certificates of deposit less than $100,000      $11,870       $14,449        $15,533       $10,463        $52,315
Certificates of deposit $100,000 or more          1,551         1,004          1,193         2,050          5,798
                                             ----------      --------      ---------      --------       ---------

Total certificates of deposit                   $13,421       $15,453        $16,726       $12,513         $58,113
                                             ==========      ========      =========      ========       =========
</table>

Note 7.  Borrowings

At June 30,  2002,  the Bank had  available  an  Overnight  Line of Credit and a
One-Month  Overnight  Repricing Line of Credit, each in the amount of $8,512,800
with the Federal Home Loan Bank. No amounts were  outstanding  on these lines at
June 30, 2002.  Interest on these lines is  determined at the time of borrowing.
In addition to the overnight line of credit program, the Bank also has access to
the FHLB's Term Advance  Program  under which it can borrow at various terms and
interest rates. The Bank pledges  residential  mortgages as collateral for these
lines of credit and term borrowings.
<table>
<caption>
At June 30, 2002, the Bank had the following borrowings:

           Amount              Rate              Maturity Date
<S>                       <C>                     <C>
       $4,000,000           2.19% -Fixed              1/14/2003
        2,500,000           6.82% -Fixed             09/02/2004
        2,500,000           6.80% -Fixed             10/04/2005
------------------
       $9,000,000
==================


</table>


<table>

At June 30, 2001, the Bank had the following borrowings:
           Amount               Rate             Maturity Date
<S>                        <C>                    <C>
       $2,500,000           6.82% -Fixed             09/02/2004
        2,500,000           6.80% -Fixed             10/04/2005
------------------
       $5,000,000
==================


</table>




Note 8.  Employee Benefits Plans

Defined Benefit Pension Plan
Substantially  all Bank  employees  who have  completed  one year of service and
attained the age of 21 are covered by a noncontributory, multi-employer, defined
benefit  pension  plan.  Under the plan,  retirement  benefits  are  primarily a
function of both years of service and level of compensation. The Bank recognized
pension  expense in the amount of $157,100 and $115,300  during fiscal year 2002
and 2001, respectively.

Defined Contribution Plan
The Bank  also  participates  in a  multi-employer,  defined  contribution  plan
covering substantially all employees who have completed three months of service.
The plan  includes  Section  401(k) and thrift  provisions  as defined under the
Internal  Revenue Code. The provisions  permit employees to contribute up to 15%
of their total  compensation  on a pre-tax  basis.  The Bank  matches 50% of the
first six percent of employee contributions for employees who have completed one
year of service.  Company  contributions  associated  with the plan  amounted to
$50,400 and $43,400 in fiscal 2002 and 2001, respectively.

ESOP
All Bank  employees  meeting the age and service  requirements  are  eligible to
participate in the ESOP.  Acquisitions  of unearned ESOP shares by the Bank were
funded  internally  through a borrowing  from the  Company,  which is  repayable
annually  with  interest at the prime rate over ten years.  Shares are committed
for release upon  repayment of the borrowing  and are allocated to  participants
based on  compensation.  Participant's  benefits  become fully vested after five
years of service. ESOP expense was $113,500 and $94,100 for the years ended June
30, 2002 and 2001,  respectively.  At June 30, 2002 and 2001,  there were 49,972
and 58,516 shares unearned,  respectively. At December 31, 2001 and December 31,
2000,  the ESOP  plan  year-end,  8,544  and  9,992  shares  were  released  for
allocation, respectively.

Note 9. Stock-based Compensation Plans

Recognition and Retention Plan
On March 28,  2000,  shareholders  approved  the  Greene  County  Bancorp,  Inc.
Recognition and Retention Plan ("Recognition  Plan"), which authorized the Board
Directors to award up to 45,474 shares of Common Stock.  On March 28, 2000,  the
Board of Directors  granted 45,400 shares under the Recognition  Plan to members
of management and  nonemployee  directors.  The market value of the shares award
amounted to $357,525 and has been  recognized in the  accompanying  statement of
condition as unearned stock-based  compensation.  The market value of the shares
awarded  will be  recognized  as  compensation  expense  ratably over the 5-year
vesting  period.  One fifth of each grant  vests at the end of the year for five
years. The first awards vested on March 28, 2001. During fiscal year 2001, 2,160
shares  were  forfeited  and no  shares  were  forfeited  in fiscal  year  2002.
Compensation  expense in  association  with the  Recognition  Plan  amounted  to
$73,000  and $87,000 for fiscal  years 2002 and 2001.  During  fiscal year ended
June 30, 2002, an officer of the Company retired and two members of the Board of
Directors  and  one  eligible   employee   retired   during  fiscal  year  2001;
consequently,  vesting in all their  eligible  shares and  compensation  expense
associated with such vesting was recognized during the fiscal year.


Stock Option Plan
On March 28, 2000,  shareholders  approved the Greene County Bancorp,  Inc. 2000
Stock Option Plan ("Option  Plan"),  which  authorized the Board of Directors to
grant up to 90,949  shares  of Common  Stock.  On March 28,  2000,  the Board of
Directors  granted  90,940  options  to buy stock  under the  Option  Plan at an
exercise  price of  $7.875,  the fair  value of the  stock on that  date.  These
options have a 10-year term and vest ratably over the 5-year vesting period.  On
March  19,  2002,  the  Board of  Directors  granted  6,000  options  that  were
previously forfeited by a former employee.  These options have an exercise price
of  $18.40,  the fair value of the stock on March 19,  2002 and have  cumulative
vesting  periods of four years,  20% immediately and 20% per year thereafter and
term of 10 years. During fiscal year 2002, 12,580 options were exercised,  6,000
of which were exercised by a former Company officer upon normal  retirement.  No
options were forfeited  during fiscal 2002.  During fiscal year 2001, no options
were exercised and 6,000 were forfeited.

The following table summarizes stock option activity.

<table>
<caption>
                                                   2002                                  2001
                                        --------------------------------       --------------------
                                                        Weighted average                    Weighted average
                                                             Exercise                           Exercise
                                                              Price                              Price
                                          Shares            Per Share           Shares         Per Share
                                        ----------         ------------       ----------   ---------------
<S>                                     <C>             <C>                   <C>            <C>
Outstanding at beginning of year           84,400           $7.875             90,400           $7.875
Shares granted                              6,000           $18.40                ---              ---
Exercised                                 (12,580)          $7.875                ---              ---
Forfeited                                    ---               ---             (6,000)          $7.875
                                         ----------                           ----------

Outstanding at year end                    77,820            $8.69             84,400           $7.875
Exercisable at year end                    20,330            $8.50             22,820           $7.875


</table>
The following table represents stock options out standing and
exercisable at June 30, 2002:
<TABLE>
<caption>
                           Options Outstanding                                          Options Exercisable
---------------------------------------------------------------------------------    --------------------------
<S>                     <C>               <C>                    <C>                     <C>         <C>
                           Weighted
                           Average            Weighted               Weighted
Range of Exercise           Number           Remaining                Average            Number         Average
       Prices             Outstanding     Contractual Life        Exercise Price      Outstanding   Exercise Price

       $7.875                71,820            7.75 years              $7.875             19,130        $7.875
       $18.40                 6,000            9.75 years                                  1,200        $18.40
                         ------------                                                  ----------

   $7.875-$18.40             77,820             7.9 years               $8.69             20,330         $8.50

</table>
The Company applies  provisions of Accounting  Principles  Board Opinion No. 25,
"Accounting  for Stock Issued to Employees"  ("APB 25") and financial  statement
disclosure  of  Statement  of Financial  Accounting  Standards  ("SFAS") No. 123
"Accounting for Stock-Based Compensation".  Since the exercise price is equal to
the fair market value on the day of grant no  compensation  expense  needs to be
recognized  for the Option Plan on the day of grant per the  guidance of APB 25.
SFAS  No.  123  requires  companies  not  using a fair  value  based  method  of
accounting for stock options or similar plans,  to provide pro forma  disclosure
of net income and  earnings per share as if that method of  accounting  had been
applied.










<table>
<caption>
                                 2002                                     2001
                   ----------------------------------      ------------------------------------

                                Basic       Diluted                     Basic        Diluted
                                Earnings    Earnings                    Earnings     Earnings
                   Net Income   Per Share   Per Share      Net Income   Per Share    Per Share
<S>                <C>          <C>         <C>            <C>          <C>          <C>
As reported        $1,652,712    $0.84       $0.82         $956,353       $0.48       $0.48
Pro Forma          $1,589,911    $0.81       $0.79         $885,339       $0.45       $0.44

</table>

The fair value of each option grant is estimated on the dates of grant using the
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions used for grants made March 28, 2000 as follows for fiscal year ended
June 30, 2002. No options were granted during fiscal 2001.

<table>
<caption>
                                              2002
<S>                                         <C>


Weighted average risk-free interest rate     4.78%


Weighted average expected term                 5


Weighted average expected volatility         29.54%


</table>


For purposes of pro forma  disclosures,  the estimated fair value of the options
is  amortized  to expense  over the  options'  vesting  period.  Therefore,  the
forgoing pro forma results are not likely to be representative of the effects of
reported  net  income of future  periods  due to  additional  years of  vesting.
Consequently, the weighted average fair market value was $4.62 for options whose
stock price on the date of grant, March 19, 2002.

Pro forma disclosures for the Company for the years ended June 30, 2002 and 2001
utilized the  estimated  fair value of the options  granted and were adjusted to
reflect actual  forfeitures  and  accelerated  vesting for employees who retired
during the 2002 or 2001 fiscal year.

Note 10. Earnings Per Share

The reconciliation of earnings per share is as follows:
<table>
<caption>


                                           Weighted Average Number
                       Net Income           Of Shares Outstanding           Earnings per share
<S>                    <C>               <C>                               <C>
Fiscal year ended
June 30, 2002
                        $1,652,712
   Basic EPS                                   1,962,228                         $0.84
   Diluted EPS                                 2,016,031                         $0.82

Fiscal year ended
June 30, 2001
                          $956,353
  Basic EPS                                    1,978,165                         $0.48
  Diluted EPS                                 2,001,331                         $0.48

</table>
<PAGE>

Note 11.  Income Taxes

The provision for income taxes consists of the following:

<table>
<caption>
                                          2002                2001
<S>                                    <C>                  <C>
Current:
    Federal                             $472,076            $248,095
    State                                 88,038              35,784
                                      -----------          -------------

Total current                            560,114              283,879

Deferred                                  40,086              (67,380)
                                      -----------          -------------

Total income tax expense                $600,200             $216,499
                                      ===========          =============
</table>

The Bank's effective tax rate differs from the federal statutory rate for fiscal
years ended June 30:

<table>
<caption>
                                                     2002               2001
<S>                                              <C>                 <C>
Tax based on federal statutory rate                  34.00%               34.00%
Sate income taxes, net of federal benefit             2.84                 1.76
Tax-exempt income                                    (6.91)              (12.36)
Stock Compensation                                   (2.13)               (2.84)
Change in valuation allowance                          ---                 2.56
Other, net                                           (1.16)               (4.66)
                                                 ----------          -----------
Total income tax expense                              6.64%               18.46%
                                                 ==========          ===========


</table>

The components of the deferred tax assets and liabilities at June 30 were as
follows:

<table>
<caption>


                                                    2002                2001
<S>                                              <C>                 <C>
Deferred tax assets:
  Allowance for loan loss                          $406,963             $346,634
  Charitable contribution carryover                  64,205              113,267
  Capital loss carryover                             19,087               19,108
  Non-accruing interest                               3,761               12,186
                                                 ----------          -----------

Total deferred tax assets                           494,016              491,195

Deferred tax liabilities:
  Depreciation                                      240,155              198,065
  Investments                                       625,234              365,481
  ESOP contribution                                  24,887               27,160
  Other                                                 853                3,267
                                                 ----------          -----------

Total deferred tax liabilities                      891,129              593,973
                                                 ----------          -----------


Net deferred tax liability                         (397,113)            (102,778)
Valuation allowance                                 (30,000)             (30,000)
                                                 ----------          -----------

Net deferred tax liability                        ($427,113)           ($132,778)
                                                 ==========          ===========


</table>

A portion of the change in the net deferred  tax  liability at June 30, 2002 and
2001 and net deferred tax asset at June 30, 2000 related to the unrealized gains
and losses on securities available-for-sale. The related deferred tax expense of
$261,853 and $720,594 was recorded directly to shareholders'  equity in 2002 and
2001, respectively.

The Company has determined that it is more likely than not that a portion of the
deferred  tax  asset  for the  charitable  contribution  carryover  will  not be
realized. As such, a $30,000 valuation allowance was deemed necessary for fiscal
years ended June 30, 2002 and 2001.

Note 12.  Commitments and Contingent Liabilities

In the normal course of business  there are various  commitments  and contingent
liabilities  outstanding  pertaining  to the  granting of loans and the lines of
credit, which are not reflected in the accompanying  financial  statements.  The
Bank's loan commitments are as follows at June 30, 2002:


<table>

<S>                                                   <C>
Commercial loan commitments                              $340,000
Mortgage loan commitments                               3,681,000
Unused portion of overdraft lines of credit               774,000
Unused portion of home equity lines of credit           1,191,000
Unused portion of commercial lines of credit            1,368,000
                                                      -----------


Total commitments                                      $7,354,000
                                                      ===========

</table>

Commitments to extend credit in the form of loan commitments and lines of credit
are  agreements  to lend to a customer as long as there is no  violation  of any
condition  established  in  the  contract.   Commitments  generally  have  fixed
expiration dates or other termination  clauses and may require payment of a fee.
Since many of the  commitments  are expected to expire without being fully drawn
upon, the total  commitment  amounts do not  necessarily  represent  future cash
requirements.  The  Bank  evaluates  each  customer's  credit  worthiness  on  a
case-by-case basis.

The amount of  collateral,  if any,  required by the Bank upon the  extension of
credit is based on management's  credit evaluation of the customer.  Commitments
to extend  mortgage credit are primarily  collateralized  by first liens on real
estate.  Collateral on  extensions  of  commercial  lines of credit vary but may
include  accounts  receivable,  inventory,  property,  plant and equipment,  and
income producing commercial property.

Note 13. Operating Leases

The Bank entered into an operating  lease in connection  with the opening of the
Westerlo  branch.  The term of the lease  began  December 1, 2000 and expires on
November 30, 2005.  Under the current terms of the lease the Bank is required to
pay $800 per month.  Consequently,  the operating  lease expense for fiscal year
2002 amounted to $9,600. There is an option to extend the term of the lease from
December 1, 2005 to November 30, 2010.  The intent to exercise  this option must
be made by the Bank in writing at least six months  prior to the  expiration  of
the initial term.  The renewal terms shall be the same except the monthly rental
shall increase to $900 per month or $10,800 per annum.



<TABLE>

<S>                    <C>
   Fiscal year end        Annual Lease Payments
              2003                       $9,600
              2004                        9,600
              2005                        4,000
                       -------------------------
Total payments                          $23,200
                       =========================


</table>

Note 14.  Concentrations of Credit Risk

The  Bank  grants  residential,  consumer  and  commercial  loans  to  customers
primarily  located  in Greene  County,  New York and to a limited  extent in the
contiguous  counties.  Although the Bank has a  diversified  loan  portfolio,  a
substantial  portion  of its  debtors'  ability  to  honor  their  contracts  is
dependent upon employment and other economic factors throughout Greene County.


Note 15.  Fair Value of Financial Instruments

The  Company  determines  fair  values  based on  quoted  market  values,  where
available,  or on estimates using present value or other  valuation  techniques.
Those techniques are significantly  affected by the assumptions used,  including
the discount rate and estimate of future cash flows. In that regard, the derived
fair value  estimates  cannot be  substantiated  by  comparison  to  independent
markets and, in many cases, could not be realized in immediate settlement of the
instrument.  Statement of Financial  Accounting  Standards  No. 107  "Disclosure
About  Fair  Value  of  Financial   Instruments,"   excludes  certain  financial
instruments and all non-financial  instruments from its disclosure requirements.
Accordingly,  the aggregate  fair value  amounts  presented do not represent the
underlying value of the Company.

Cash and  cash  equivalents  carrying  amounts  reported  in the  balance  sheet
approximate those assets' fair value.  Fair values of investment  securities are
based on quoted market prices,  where  available.  Fair values for variable rate
loans that reprice  frequently,  with no  significant  credit risk, are based on
carrying value.  Fair value for fixed rate loans are estimated using  discounted
cash flows and interest  rates  currently  being  offered for loans with similar
terms to borrowers of similar credit quality.  Fair values  disclosed for demand
and savings  deposits are equal to carrying  amounts at the reporting  date. The
carrying  amounts for  variable  rate money market and  certificates  of deposit
approximate  fair  values at the  reporting  date.  Fair  values  for fixed rate
certificates of deposit are estimated  using  discounted cash flows and interest
rates  currently being offered on similar  certificates.  The carrying amount of
Federal Home Loan Bank stock and borrowings approximately fair value.

The carrying amounts and estimated fair value of financial instruments as of
June 30, 2002 and 2001 are as follows:


<table>
<caption>

                                                  June 30, 2002                 June 30, 2001


                                             Carrying          Fair        Carrying        Fair
                                              Amount          Value         Amount        Value
<S>                                         <C>              <C>           <c>           <C>
(Dollars in thousands)
Cash and cash equivalents                     $17,832         $17,832       $18,804      $18,804
Investment securities                          66,089          66,089        48,875       48,875
Federal Home Loan Bank stock                    1,121           1,121           940          940
Net loans                                     128,373         126,875       109,757      108,406
Deposits                                      183,714         184,031       154,193      152,449
Federal Home Loan Bank borrowings               9,000           9,000         5,000        5,000



</table>

Note 16.  Regulatory Matters

The Bank is subject to various regulatory capital  requirements  administered by
federal  banking  agencies.  Failure to meet minimum  capital  requirements  can
initiate  certain  mandatory and possibly  additional  discretionary  actions by
regulators  that,  if  undertaken,  could have a direct  material  impact on the
Bank's  financial   statements.   Under  capital  adequacy  guidelines  and  the
regulatory  framework for prompt corrective  action, the Bank must meet specific
guidelines that involve quantitative measures of the Bank's assets, liabilities,
and certain  off-balance-sheet  items as calculated under regulatory  accounting
practices.  The Bank's capital amounts and  classifications  are also subject to
qualitative judgments by the regulators about components,  risk weightings,  and
other factors.

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require the Bank to maintain  minimum amounts and ratios (set forth in the table
below)  of  Total  and  Tier  I  capital  (as  defined  in the  regulations)  to
risk-weighted assets (as defined), and of Tier 1 Capital (as defined) to average
assets (as defined).  Management  believes,  as of June 30, 2002,  that the Bank
meets all capital adequacy requirements to which it is subject.

<table>
<caption>
                                                                                        To Be Well
                                                                                     Capitalized Under
                                                                                     Prompt Corrective
                                                                                     Action Provisions

                                                                  For Capital
                                                                Adequacy Purposes
                                                Actual
                                            Amount     Ratio       Amount    Ratio    Amount      Ratio
<S>                                        <C>         <C>         <C>       <C>      <C>         <C>
As of June 30, 2002

Total risk-based capital ratio              $22,145    19.1%       $9,252     8.0%    $11,565     10.0%
Tier 1 capital (to risk weighted assets)    $21,076    18.2%       $4,626     4.0%     $6,939      6.0%
Tier 1 capital (to average assets)          $21,076    10.1%       $8,349     4.0%    $10,437      5.0%






As of June 30, 2001

Total capital (to risk weighted assets)     $20,417    18.8%       $8,709     8.0%    $10,887     10.0%
Tier 1 capital (to risk weighted assets)    $19,531    17.9%       $4,355     4.0%     $6,532      6.0%
Tier 1 capital (to average assets)          $19,531    11.4%       $6,869     4.0%     $8,586      5.0%




</table>




Note 17.  Subsequent events

The Board of Directors declared a semi-annual dividend of $0.32 per share of the
Company's  common stock.  The dividend  reflects an annual cash dividend rate of
$0.64 per share,  which  represents  an increase  from the  current  annual cash
dividend rate of $0.56 per share.  The dividend will be payable to  stockholders
of record as of August 15,  2002,  and will be paid on  September  1,  2002.  It
should be noted that the Company's  mutual  holding  company  continued to waive
receipt of dividends for the current period.


<PAGE>


SHAREHOLDER INFORMATION

Annual Meeting
The Annual  Meeting of  Shareholders  will be held at 5:30 p.m.  on October  23,
2002,  at the Bank's main branch  located at 425 Main  Street in  Catskill,  New
York.

Stock Listing
The NASDAQ Small-Cap Market under the symbol GCBC.

Special Counsel
---------------
Luse Gorman Pomerenk & Schick, P.C.
5335 Wisconsin Avenue, N.W., Suite 400
Washington, D.C. 20015

Independent Accountants
PricewaterhouseCoopers LLP
State Street Centre
80 State Street
Albany, New York 12207

Transfer Agent and Registrar
ComputerShare Investor Services
Golden, Colorado
303-262-0600

Annual Report on Form 10-KSB
A copy of the Company's Form 10-KSB for the fiscal year ended June 30, 2002,
will be furnished without charge to shareholders upon written request to the

Secretary
Greene County Bancorp, Inc.
302 Main Street
Catskill, New York 12414

Branch locations
Catskill
Main & Church Streets
Catskill, NY 12414
Telephone: 518-943-3700
Fax: 518-943-3756

Cairo
Main Street
Cairo, NY 12413
Telephone: 518-622-2662
Fax: 518-622-2663

Coxsackie
Route 385
Coxsackie, NY 12051
Telephone: 518-731-2731
Fax: 518-731-2733




Greenville
Route 32
Greenville, NY 12083 Telephone: 518-966-5200

Tannersville
6226 Main Street
Tannersville, NY 12485
Telephone: 518-589-0800
Fax: 518-589-5649

Westerlo
Routes 141 & 143
Westerlo, NY 12193
Telephone: 518-797-3934
Fax: 518-797-3871


Operations Center
302 Main Street
Catskill, NY 12414
Telephone: 518-943-2600
Fax: 518-943-4431


Board of Directors

Walter Ingalls
Chairman of the Board
Retired, former President of GNH Lumber Co.

J. Bruce Whittaker,
President and CEO

David Jenkins, DVM
Owner of Catskill Animal Hospital

Raphael Klein
Retired, former Co-owner of Klein Theaters

Dennis O'Grady
Pharmacist, former owner of Mikhitarian Pharmacy

Paul Slutzky
General Manager of I.&O.A. Slutzky Construction Company

Martin Smith
Consultant to Main Bros. Oil Co., Inc.



</TEXT>
</DOCUMENT>
