SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                    FORM 10-Q

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

                  For the quarterly period ended: JUNE 30, 2000

                                       OR

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

          For the transition period from _____________ to _____________

                        Commission file number: 000-25439

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

           Delaware                                              16-1559508
---------------------------------                            -------------------
 (State or other jurisdiction                                 (I.R.S. Employer
of incorporation or organization)                            Identification No.)

                     32 Second Street, Troy, New York 12180
             ------------------------------------------------------
               (Address of principal executive offices)(Zip Code)

                                 (518) 270-3313
             ------------------------------------------------------
              (Registrant's telephone number, including area code)

                                 not applicable
             ------------------------------------------------------
                 (Former name, former address and former fiscal
                       year, if changed since last report)

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

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common  stock,  as of the latest  practicable  date: AS OF AUGUST 10,
2000: 10,763,675 SHARES OF COMMON STOCK, PAR VALUE $.0001 PER SHARE.



<PAGE>


                                      INDEX


<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
                                                                                                                            PAGE
<S>                                                                                                                         <C>
Item 1:    Financial Statements

                  Consolidated Statements of Condition, June 30,
                     2000 (unaudited) and September 30, 1999 .............................................................    1

                  Consolidated Statements of Income, Three and Nine
                     Months Ended June 30, 2000 and 1999
                     (unaudited) .........................................................................................    2

                  Consolidated Statements of Cash Flows, Nine Months
                     Ended June 30, 2000 and 1999
                     (unaudited) .........................................................................................    3

                  Consolidated Statements of Changes in
                     Shareholders' Equity, Nine Months Ended
                     June 30, 2000 and 1999 (unaudited) ..................................................................    4

                  Notes to Unaudited Consolidated Interim
                     Financial Statements ................................................................................    5

Item 2:    Management's Discussion and Analysis of
               Financial Condition and Results of Operations .............................................................    8

Item 3:    Quantitative and Qualitative Disclosures About Market Risk ....................................................


PART II - OTHER INFORMATION


                  Items 1-6 .............................................................................................. II-1

                  Signature page ......................................................................................... II-2
</TABLE>

<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                           TROY FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CONDITION

<TABLE>
<CAPTION>
                                                                                             June 30, 2000    September 30, 1999
                                                                                             -------------    ------------------
                                    ASSETS                                                    (in thousands, except share data)
                                    ------
                                                                                             ( Unaudited )
<S>                                                                                            <C>                <C>
Cash & due from banks                                                                          $  19,037          $  35,885
Federal funds sold                                                                                 4,600                 50
                                                                                               ---------          ---------
          Total cash and cash equivalents                                                         23,637             35,935
Loans held for sale                                                                                1,724              4,064
Securities available for sale, at fair value                                                     243,642            280,871
Investment securities held to maturity ( fair value of $2,329 and $2,582
       at June 30, 2000 and September 30, 1999, respectively)                                      2,348              2,534
Net loans receivable                                                                             591,199            556,142
Accrued interest receivable                                                                        5,246              5,270
Other real estate owned                                                                            1,225              1,845
Premises & equipment, net                                                                         15,282             15,049
Other assets                                                                                      18,541             13,386
                                                                                               ---------          ---------
        Total assets                                                                           $ 902,844          $ 915,096
                                                                                               =========          =========



                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------

Liabilities:
   Deposits:
       Savings accounts                                                                          181,804            191,968
       Money market accounts                                                                      25,039             20,348
       N.O.W. and demand accounts                                                                137,425            123,345
       Time accounts                                                                             216,460            227,712
                                                                                               ---------          ---------
       Total deposits                                                                            560,728            563,373
   Mortgagors' escrow accounts                                                                     4,568              1,596
   Securities sold under agreements to repurchase                                                 81,006              3,736
   Short-term borrowings                                                                          20,000            100,700
   Long-term debt                                                                                 53,147             44,497
   Accrued interest payable                                                                          730                487
   Official bank checks                                                                            3,621              9,651
   Contributions payable                                                                           2,828              2,664
   Other liabilities and accrued expenses                                                          9,848              7,953
                                                                                               ---------          ---------
       Total liabilities                                                                         736,476            734,657
                                                                                               ---------          ---------



Shareholders' Equity:
   Preferred Stock, $.0001 par value; 15,000,000 shares authorized,
       none issued                                                                                    --                 --
   Common Stock, $.0001 par value; 60,000,000 shares authorized,
         12,139,021 issued at June 30, 2000 and September 30, 1999                                     1                  1
   Additional paid-in capital                                                                    117,804            117,759
   Unallocated common stock held by ESOP                                                          (9,027)            (9,620)
   Unvested restricted stock awards                                                               (4,101)                --
   Treasury stock, at cost                                                                       (14,306)                --
   Retained earnings, substantially restricted                                                    76,949             72,699
   Accumulated other comprehensive loss                                                             (952)              (400)
                                                                                               ---------          ---------
       Total shareholders' equity                                                                166,368            180,439
                                                                                               ---------          ---------
           Total liabilities and shareholders' equity                                          $ 902,844          $ 915,096
                                                                                               =========          =========
</TABLE>


 See accompanying notes to unaudited consolidated interim financial statements.



                                       1
<PAGE>


                           TROY FINANCIAL CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME

                                  ( Unaudited )

<TABLE>
<CAPTION>
                                                                                       For the                    For the
                                                                                  three months ended         nine months ended
                                                                                       June 30,                   June 30,
                                                                                      ---------                   --------
                                                                                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                                                  2000          1999          2000          1999
                                                                                --------       -------      --------       --------
<S>                                                                             <C>            <C>          <C>            <C>
Interest and dividend income:
     Interest and fees on loans                                                 $ 11,683       $10,063      $ 34,312       $ 29,225
     Securities available for sale:
       Taxable                                                                     1,704         1,343         5,556          4,811
       Tax exempt                                                                    767           609         2,216          1,653
                                                                                --------       -------      --------       --------
                                                                                   2,471         1,952         7,772          6,464
                                                                                --------       -------      --------       --------
     Investment securities held to maturity                                           48            54           147            172
     Federal funds sold                                                              178         1,277           533          1,947
                                                                                --------       -------      --------       --------
       Total interest and dividend income                                         14,380        13,346        42,764         37,808
                                                                                --------       -------      --------       --------


Interest expense:
     Deposits and escrow accounts                                                  4,694         4,837        13,909         15,654
     Short-term borrowings                                                           471            94         2,086            290
     Long-term debt                                                                  800           649         2,135          1,944
                                                                                --------       -------      --------       --------
        Total interest expense                                                     5,965         5,580        18,130         17,888
                                                                                --------       -------      --------       --------
        Net interest income                                                        8,415         7,766        24,634         19,920
     Provision for loan losses                                                       469           812         1,807          2,437
                                                                                --------       -------      --------       --------
           Net interest income after provision for loan losses                     7,946         6,954        22,827         17,483
                                                                                --------       -------      --------       --------


Non-interest income:
     Service charges on deposits                                                     281           224           792            666
     Loan servicing fees                                                             127           166           383            398
     Trust service fees                                                              191           176           530            481
     Net (losses) gains from securities transactions                                (120)            5          (115)            14
     Net gains (losses) from mortgage loan sales                                      19            48           (54)           232
     Other income                                                                    296           161         1,084            458
                                                                                --------       -------      --------       --------
           Total non-interest income                                                 794           780         2,620          2,249
                                                                                --------       -------      --------       --------


Non-interest expense:
     Compensation and employee benefits                                            3,238         2,740         9,404          8,008
     Occupancy                                                                       509           521         1,506          1,548
     Furniture, fixtures and equipment                                               207           174           618            552
     Computer charges                                                                410           352         1,227          1,093
     Professional, legal and other fees                                              335           316         1,047            972
     Printing, postage and telephone                                                 272           171           720            491
     Other real estate owned                                                        (272)           63          (109)           682
     Contributions                                                                    57            20           145          4,389
     Other                                                                           680           543         2,165          2,424
                                                                                --------       -------      --------       --------
         Total non-interest expense                                                5,436         4,900        16,723         20,159
                                                                                --------       -------      --------       --------
Income (loss) before income tax expense (benefit)                                  3,304         2,834         8,724           (427)
Income tax expense (benefit)                                                       1,005           874         2,476           (741)
                                                                                --------       -------      --------       --------
Net income                                                                      $  2,299       $ 1,960      $  6,248       $    314
                                                                                ========       =======      ========       ========

     Earnings per share:
         Basic                                                                  $   0.23       $  0.16      $   0.61       $   0.16
         Diluted                                                                $   0.23       $  0.16      $   0.61       $   0.16

    Earnings per share for the nine months ended June 30, 1999
        only includes net income subsequent to the initial
        public offering on March 31, 1999

</TABLE>

                                       2
<PAGE>


                           TROY FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  ( UNAUDITED )

<TABLE>
<CAPTION>
                                                                                            FOR THE NINE MONTHS ENDED
                                                                                       JUNE 30, 2000         JUNE 30, 1999
                                                                                                 (in thousands)
<S>                                                                                       <C>                  <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS:
CASH FLOWS FROM OPERATING ACTIVITIES:

   Net income                                                                            $   6,248                  314
   Adjustments to reconcile net income to net cash provided by
     operating activities:
       Depreciation and amortization                                                           931                  985
       Provision for loan losses                                                             1,807                2,437
       Non-cash contribution expense                                                            --                4,084
       Amortization of restricted stock awards                                                 723                   --
       ESOP shares released for allocation                                                     638                   --
       Net accretion of discount on securities                                              (1,024)              (2,366)
       Net losses (gains) from securities transactions                                         115                  (14)
       Net losses (gains) from mortgage loan sales                                              54                 (232)
       Net loss on sale of other real estate owned                                               4                   39
       Write down of other real estate owned                                                   379                  221
       Proceeds from sales of loans held for sale                                           10,703               50,963
       Net loans made to customers and held for sale                                        (8,417)             (45,721)
       Decrease (increase) in accrued interest receivable                                       24                  (31)
       Increase in other assets                                                             (4,787)              (2,951)
       Increase in accrued interest payable                                                    243                  144
       Decrease  in official bank checks, contributions payable, and
          other liabilities and accrued expenses                                            (3,971)                 142
                                                                                         ---------             --------

                  Net cash provided by operating activities                                  3,670                8,014
                                                                                         ---------             --------

CASH FLOWS FROM INVESTING ACTIVITIES:

       Proceeds from sales of securities available for sale                                 34,405                8,611
       Proceeds from maturities and redemptions of securities available for sale           351,087              464,222
       Purchases of securities available for sale                                         (348,274)            (536,032)
       Proceeds from maturities and redemptions of investment securities
          held to maturity                                                                     186                  869
       Proceeds from sales of other real estate owned                                        4,061                  607
       Net loans made to customers                                                         (40,688)             (62,642)
       Purchases of premises and equipment                                                  (1,164)              (2,108)
                                                                                         ---------             --------
                  Net cash  used in investing activities                                      (387)            (126,473)
                                                                                         ---------             --------

CASH FLOWS FROM FINANCING ACTIVITIES:

       Net decrease in deposits                                                             (2,645)              (8,439)
       Net increase in mortgagors' escrow accounts                                           2,972                2,700
       Net increase (decrease)  in securities sold under agreements to repurchase           77,270                 (157)
       Net decrease in short-term borrowings                                               (80,700)                  --
       Proceeds from issuance of long-term debt                                              9,000               30,700
       Payments on long-term debt                                                             (350)                (330)
       Dividends paid                                                                       (1,863)                  --
       Purchase of treasury stock                                                          (19,265)                  --
       Net proceeds from stock offering                                                         --              113,676
                                                                                         ---------             --------
       Acquisition of common stock by ESOP                                                      --               (9,620)
                                                                                         ---------             --------
                  Net cash (used in) provided by financing activities                      (15,581)             128,530
                                                                                         ---------             --------

Net (decrease) increase in cash and cash equivalents                                       (12,298)              10,071

Cash and cash equivalents at beginning of period                                            35,935               17,915
                                                                                         ---------             --------
Cash and cash equivalents at end of period                                               $  23,637               27,986
                                                                                         =========             ========

SUPPLEMENTAL INFORMATION                                                                         0
  CASH PAID FOR:
     Interest on deposits and borrowings                                                 $  17,887               17,744
     Income taxes                                                                            2,345                  699

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES:
     Net reduction in loans resulting from the transfer  to other real estate owned          3,824                  369
     Adjustment of securities available for sale to fair  value, net of tax                   (552)                (516)
     Grant of restricted stock awards                                                        4,824                   --
</TABLE>


See accompanying notes to unaudited consolidated interim financial statements.


                                       3
<PAGE>

                           TROY FINANCIAL CORPORATION
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   For the nine months ended
                                                                           June 30,                           June 30,
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)                              2000                               1999
====================================================================================================================================
<S>                                                            <C>              <C>               <C>              <C>
    COMMON STOCK
       Balance at beginning of period                          $       1                          $      --
       Issuance of 11,730,575 shares of $0.0001
         public offering                                              --                                  1
       Issuance of 408,446 shares of $0.0001 par
         value common stock to The Troy Savings Bank
         Community Foundation                                         --                                 --
------------------------------------------------------------------------------------------------------------------------------------

       Balance at end of period                                $       1                          $       1
------------------------------------------------------------------------------------------------------------------------------------

    ADDITIONAL PAID-IN CAPITAL

       Balance at beginning of period                          $ 117,759                          $      --
       Issuance of 11,730,575 shares of common
         net of offering costs of $3,630                              --                            113,675

       Issuance of 408,446 shares of common
         stock to The Troy Savings Bank
         Charitable Foundation                                        --                              4,084

       Adjustment for ESOP shares released for
         allocation                                                   45                                 --
------------------------------------------------------------------------------------------------------------------------------------

       Balance at end of period                                $ 117,804                          $ 117,759
------------------------------------------------------------------------------------------------------------------------------------

    UNALLOCATED COMMON STOCK HELD BY ESOP

       Balance at beginning of period                          $  (9,620)                         $      --

       Aquisition of 971,121 shares of common
         stock by ESOP                                                --                             (9,620)

       ESOP shares released for allocation                           593
------------------------------------------------------------------------------------------------------------------------------------

       Balance at end of period                                $  (9,027)                         $  (9,620)
------------------------------------------------------------------------------------------------------------------------------------

    UNVESTED RESTRICTED STOCK AWARDS
       Balance at beginning of period                          $      --                          $      --

       Grant of restricted stock awards (446,165
         shares)                                                  (4,824)                                --

       Amortization of restricted stock awards                       723                                 --
------------------------------------------------------------------------------------------------------------------------------------

       Balance at end of period                                $  (4,101)                         $      --
------------------------------------------------------------------------------------------------------------------------------------

    TREASURY STOCK
       Balance at beginning of period                          $      --                          $      --

       Purchase of treasury stock (1,815,411
         shares)                                                 (19,265)                                --

       Grant of restricted stock awards (446,165
         shares)                                                   4,959                                 --
------------------------------------------------------------------------------------------------------------------------------------

       Balance at end of period                                $ (14,306)                         $      --
------------------------------------------------------------------------------------------------------------------------------------

    RETAINED EARNINGS
       Balance at beginning of period                          $  72,699                          $  70,622

       Net income                                                  6,248        $   6,248               314        $     314

       Cash dividends ($0.16 per share)                           (1,863)                                --

       Adjustment for grant of restricted stock
         awards                                                     (135)                                --
------------------------------------------------------------------------------------------------------------------------------------

       Balance at end of period                                $  76,949                          $  70,936
------------------------------------------------------------------------------------------------------------------------------------

    ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
       Balance at beginning of period                          $    (400)                         $     407

       Unrealized net holding losses on
         securities available for sale arising
         during the period (pre-tax ($1,035) and ($847))                             (621)                              (508)

       Reclassification adjustment for net losses (gains)
         on securities available for sale realized in net
         income (pre-tax $115 and ($14)                                                69                                 (8)
------------------------------------------------------------------------------------------------------------------------------------

       Other comprehensive loss                                $    (552)            (552)        $    (516)            (516)
------------------------------------------------------------------------------------------------------------------------------------

         Comprehensive income (loss)                                            $   5,696                          $    (202)
--------------------------------------------------------------------------------=========--------------------------=========--------

       Balance at end of period                                $    (952)                         $    (109)
------------------------------------------------------------------------------------------------------------------------------------

       Total shareholders' equity at June 30                   $ 166,368                          $ 178,967
====================================================================================================================================
       SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS.


</TABLE>

                                       4
<PAGE>


                         Notes to Unaudited Consolidated
                          Interim Financial Statements

Note 1. Basis of Presentation

The unaudited  consolidated interim financial statements include the accounts of
Troy Financial Corporation (the "Company") and its wholly owned subsidiary,  The
Troy Savings Bank (the "Bank"), and the Bank's subsidiaries.  The Company became
the bank  holding  company  of the  Bank on March  31,  1999.  Accordingly,  all
financial  data as of and for  periods  prior to such date are the  consolidated
data of the  Bank and its  subsidiaries.  The  September  30,  1999  data in the
Consolidated  Statements  of  Condition is derived  from the  Company's  audited
consolidated  financial  statements.  All intercompany accounts and transactions
have been eliminated in consolidation.

The unaudited  consolidated interim financial statements reflect all adjustments
of a normal recurring nature which are necessary for a fair  presentation of the
results for the interim periods presented and should be read in conjunction with
the  consolidated  financial  statements  and  related  notes  included  in  the
Company's  annual report on Form 10-K as of and for the year ended September 30,
1999.  The results of  operations  for the interim  periods are not  necessarily
indicative  of the results of operations to be expected for the full fiscal year
ending  September 30, 2000.  Reclassifications  are made  whenever  necessary to
conform to the current year presentation.

Note 2. Earnings Per Share

Basic   earnings  per  share  is  calculated  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
calculated  in a manner  similar to basic  earnings  per share  except  that the
weighted-average number of common shares outstanding is increased to include the
number of  additional  common  shares  that would have been  outstanding  if all
potentially  dilutive  common  shares  ( such  as  stock  options  and  unvested
restricted stock ) were issued during the reporting 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.  During the three and nine months ended June 30, 2000,  options to
purchase  1,015,617  shares  of common  stock at an  average  exercise  price of
$10.813 were  outstanding,  but were not included in the  computation of diluted
earnings per share, as the effect was antidilutive. The options, which expire on
October 1, 2009, were still outstanding at June 30, 2000.



                                       5
<PAGE>

The following table sets forth certain information  regarding the calculation of
basic and diluted  earnings per share for the three month and nine month periods
ended June 30, 1999 and 2000:


<TABLE>
<CAPTION>
                                                                                  For the Three Months Ended June 30,
                                                                                       2000                     1999
                                                                                       ----                     ----
                                                                             (in thousands, except share and per share data)
                                                                             -----------------------------------------------
<S>                                                                                <C>                       <C>
Net income                                                                         $     2,299               $     1,960
                                                                                   ===========               ===========

Weighted average shares outstanding                                                  9,964,137                11,888,314

Dilutive effect of potential common shares
  related to stock compensation plans                                                   37,358                        --
                                                                                   -----------               -----------

Weighted average shares outstanding including
  potential dilution                                                                10,001,495                11,888,314
                                                                                   ===========               ===========

Basic earnings per share                                                           $      0.23               $      0.16
Diluted earnings per share                                                         $      0.23               $      0.16
</TABLE>


<TABLE>
<CAPTION>
                                                                                   For the Nine Months Ended June 30,
                                                                                      2000                      1999
                                                                                      ----                      ----
                                                                             (in thousands, except share and per share data)
                                                                             -----------------------------------------------
<S>                                                                                <C>                       <C>
Net income                                                                         $     6,248               $     1,960
                                                                                   ===========               ===========

Weighted average shares outstanding                                                 10,253,065                11,888,314

Dilutive effect of potential common shares
  related to stock compensation plans                                                   17,930                        --
                                                                                   -----------               -----------

Weighted average shares outstanding including
  potential dilution                                                                10,270,995                11,888,314
                                                                                   ===========               ===========

Basic earnings per share                                                           $      0.61               $      0.16
Diluted earnings per share                                                         $      0.61               $      0.16
</TABLE>


Earnings  per share for the nine months  ended June 30, 1999 only  includes  net
income subsequent to the initial public offering on March 31, 1999.


                                       6
<PAGE>

Note 3. Comprehensive Income

Comprehensive  income  includes the reported net income of the Company  adjusted
for items that are currently  accounted for as direct entries to equity, such as
the mark to market adjustment on securities available for sale, foreign currency
items and minimum pension liability adjustments.  At the Company,  comprehensive
income  represents  net income plus other  comprehensive  income or loss,  which
consists of the net change in unrealized gains or losses on securities available
for sale for the period, net of tax.  Accumulated other comprehensive  income or
loss represents the net unrealized  gains or losses on securities  available for
sale, net of tax, as of the balance sheet dates.

Note 4.  Pending Acquisition of Catskill Financial Corporation

On June 8, 2000, the Company  announced it had signed a definitive  agreement by
which the  Company  will  acquire  all of the  outstanding  shares  of  Catskill
Financial  Corporation  ("Catskill") in a cash transaction for $23.00 per share,
for a total  transaction value of approximately  $90.0 million.  Catskill is the
holding company of Catskill  Savings Bank, a $346.1 million asset,  seven office
savings  bank  headquartered  in Catskill,  New York.  In the  acquisition,  the
Company  will  merge  Catskill  Savings  Bank into The Troy  Savings  Bank.  The
transaction is subject to Catskill  shareholder and regulatory  approvals and is
expected to close by the end of 2000.  The  transaction  will be  accounted  for
under the purchase method of accounting.

Note 5. Impact of New Accounting Standards

In June  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities," which establishes  accounting and reporting
standards for derivative  instruments,  including certain derivative instruments
embedded in other  contracts,  and for  hedging  activities.  In May 1999,  this
statement was delayed by the FASB; consequently it will now be effective for all
fiscal  quarters of fiscal years  beginning  after June 15, 2000.  Management is
currently evaluating the impact of this Statement on the Company's  consolidated
financial statements.


                                       7
<PAGE>

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

GENERAL

         Troy Financial Corporation (the "Company" ) was formed in December 1998
to acquire all of the capital  stock of The Troy  Savings Bank (the "Bank") upon
the Bank's  conversion  from a New  York-chartered  mutual savings bank to a New
York-chartered stock savings bank. Upon the Bank's conversion on March 31, 1999,
the Company completed its initial public offering of stock,  issuing  12,139,021
shares of common stock, par value $.0001 per share ("Common  Stock"),  including
408,446 shares  contributed to The Troy Savings Bank Community  Foundation ( the
"Foundation").  The Company sold 11,730,575 shares of Common Stock at a price of
$10 per share through a subscription offering to certain depositors of the Bank.
Net  proceeds  to the  Company  from the  offering  were  $113.7  million  after
conversion  costs and offering costs.  The Company  invested  approximately  $57
million of the net  proceeds  to acquire  the Bank,  and the  Company  used $9.6
million of the net  proceeds  from the  conversion  to fund a loan to the Bank's
employee  stock  ownership plan (the "ESOP" ) which allowed the ESOP to purchase
971,122 shares of Common Stock in the open market. The Company's Common Stock is
traded on the NASDAQ Stock Market National Market Tier under the symbol "TRYF."

         The  consolidated  financial  condition  and  operating  results of the
Company are primarily dependent upon its wholly owned subsidiary,  the Bank, and
the Bank's  subsidiaries,  and all  references to the Company prior to March 31,
1999, except where otherwise indicated, are to the Bank.

         The Bank is a  community  based,  full  service  financial  institution
offering a wide variety of business and retail  banking  products.  The Bank and
its  subsidiaries  also offer a full range of trust,  insurance,  and investment
services. The Bank's primary sources of funds are deposits and borrowings, which
it uses to originate real estate  mortgages,  both  residential  and commercial,
commercial business loans, and consumer loans throughout its primary market area
which   consists   of  the  six  New  York   counties   of   Albany,   Saratoga,
Schenectady, Warren, Washington, and Rensselaer (Troy).

         The Company's profitability,  like many that of financial institutions,
is  dependent  to a large  extent  upon its net  interest  income,  which is the
difference between the interest it receives on interest earning assets,  such as
loans and securities,  and the interest it pays on interest bearing liabilities,
principally deposits and borrowings.

         Results of  operations  are also  affected by the Bank's  provision for
loan losses,  non-interest  expenses  such as salaries  and  employee  benefits,
occupancy  and other  operating  expenses and to a lesser  extent,  non-interest
income such as trust service fees,  loan servicing  fees and service  charges on
deposit accounts.  Financial institutions in general, including the Company, are
significantly affected by economic conditions,  competition and the monetary and
fiscal policies of the federal government.  Lending activities are influenced by
the demand for and supply of housing,  competition among lenders,  interest rate
conditions  and  funds  availability.  Deposit  balances  and cost of funds  are
influenced  by  prevailing  market  rates  on  competing  investments,  customer
preferences  and levels of  personal  income and  savings in the Bank's  primary
market area.

                                       8
<PAGE>

NEW COMMERCIAL BANK

Subsequent  to  quarter-end,  in  August  2000  the  Company  established  a new
commercial bank  subsidiary,  The Troy Commercial  Bank, and provided capital of
$10.0 million.

MERGER AND ACQUISITION ACTIVITY

On June 8, 2000, the Company  announced it had signed a definitive  agreement by
which the  Company  will  acquire  all of the  outstanding  shares  of  Catskill
Financial  Corporation  ("Catskill") in a cash transaction for $23.00 per share,
for a total  transaction value of approximately  $90.0 million.  Catskill is the
holding company of Catskill  Savings Bank, a $346.1 million asset,  seven office
savings  bank  headquartered  in Catskill,  New York.  In the  acquisition,  the
Company will merge Catskill Savings Bank into The Troy Savings Bank,  creating a
regional bank with pro forma total assets in excess of $1.2 billion, deposits of
$782.3 million and 21  full-service  offices  located in eight New York counties
throughout New York State's Capital and Catskill regions.

The transaction is subject to Catskill  shareholder and regulatory approvals and
is expected to close by the end of 2000. The  transaction  will be accounted for
under  the  purchase  method  of  accounting.   The  Company  expects  that  the
transaction to be accretive to its earnings by the end of the first full year of
the combined operations.

FINANCIAL CONDITION

The Company's  total assets were $902.8  million at June 30, 2000, a decrease of
$12.3 million,  or 1.3% from the $915.1 million at September 30, 1999.  Cash and
cash  equivalents  were $23.6  million  at June 30,  2000,  a decrease  of $12.3
million  from the  $35.9  million  at  September  30,  1999.  The  decrease  was
principally  due to a $16.8  million  reduction in excess cash  reserves held in
anticipation  of an increased  demand for cash by depositors in  anticipation of
Year 2000 liquidity  needs,  offset by a $4.6 million  increase in federal funds
sold.

The Bank's  securities  available for sale  portfolio was $243.6 million at June
30, 2000, a decrease of $37.2  million,  or 13.3% from the $280.9  million as of
September 30, 1999. The decrease in securities was principally due to the use of
funds  from  repayments  and  maturities  for the  continued  growth in the loan
portfolio,  as well as the repurchase common stock . Total loans receivable were
$602.8  million as of June 30, 2000,  an increase of $35.9  million or 6.3% over
the $566.9 million as of September 30, 1999. The following  table shows the loan
portfolio composition as of the respective balance sheet dates:
<TABLE>
<CAPTION>
                                                                               June 30,                       September 30,
                                                                                 2000                              1999
                                                                      --------------------------        ---------------------------
                                                                                      % of loans                       % of loans
                                                                      -------------------------------------------------------------
                                                                                         (dollars in thousands)
<S>                                                                    <C>                <C>           <C>                <C>
Real estate loans:
     Residential mortgage                                              $ 227,351          37.7%         $221,721           39.1%
     Commercial                                                          229,055          38.0%          216,700           38.2%
     Construction                                                         15,246           2.5%           13,761            2.4%
                                                                       ---------         -----          --------          -----
       Total real estate loans                                           471,652          78.2%          452,182           79.7%
                                                                       ---------         -----          --------          -----
Commercial business loans                                                 86,041          14.3%           66,274           11.7%
                                                                       ---------         -----          --------          -----
Consumer loans:
     Home equity lines of credit                                           5,299           0.9%            6,776            1.2%
     Other consumer                                                       40,185           6.6%           42,081            7.4%
                                                                       ---------         -----          --------          -----
       Total consumer loans                                               45,484           7.5%           48,857            8.6%
                                                                       ---------         -----          --------          -----
Gross loans                                                              603,177         100.0%          567,313          100.0%
                                                                                         =====                            =====
Net deferred loan fees and costs and unearned discount                      (335)                           (407)
                                                                       ---------                        --------
       Total loans                                                     $ 602,842                        $566,906
                                                                       =========                        ========
</TABLE>

                                       9
<PAGE>

Commercial  real estate loans  increased $12.4 million to $229.1 million at June
30, 2000 or 38.0% of total loans,  from $216.7 million at September 30, 1999, or
38.2% of total loans. Commercial business loans increased $19.8 million to $86.0
million or 14.3% of total loans at June 30, 2000, up from $66.3 million or 11.7%
of total loans at September 30, 1999.  Construction loans increased $1.5 million
to $15.2  million or 2.5% of total loans at June 30, 2000, up from $13.8 million
or 2.4% of total loans at  September  30, 1999.  The increase in the  commercial
real estate and  construction  loans,  as well as commercial  business loans, is
consistent with the Company's strategy to increase these loan portfolios as part
of its emphasis on commercial banking activities.  Residential real estate loans
increased $5.6 million to $227.4  million,  or 37.7% of total loans, at June 30,
2000,  from $221.7  million at September 30, 1999, or 39.1% of total loans.  The
increase in residential loans is primarily in home equity loans.

Non-performing  assets were $7.4  million,  or .82% of total  assets at June 30,
2000.  The table below sets forth the amounts and  categories  of the  Company's
non-performing assets.

<TABLE>
<CAPTION>
                                                                            June 30,          September 30,
                                                                              2000                1999
                                                                         -------------------------------------
                                                                                (dollars in thousands)
<S>                                                                          <C>                 <C>
Non-accrual loans:
     Real estate loans:
         Residential mortgage                                                $ 2,441             $ 2,707
         Commercial mortgage                                                   3,353               4,210
         Construction                                                             --                  --
                                                                             -------             -------
             Total real estate loans                                           5,794               6,917
Commercial business loans                                                        100                  10
Home equity lines of credit                                                       92                  58
Other consumer loans                                                             165                 282
                                                                             -------             -------
             Total non-accrual loans                                           6,151               7,267
         Troubled debt restructurings                                             54                 616
                                                                             -------             -------
             Total non-performing loans                                      $ 6,205             $ 7,883
                                                                             =======             =======
     Other real estate owned :
         Residential real estate                                                 252                  76
         Commercial real estate                                                  973               1,769
                                                                             -------             -------
             Total other real estate owned                                   $ 1,225             $ 1,845
                                                                             =======             =======
             Total non-performing assets                                     $ 7,430             $ 9,728
                                                                             =======             =======
Allowance for loan losses                                                    $11,643             $10,764
                                                                             =======             =======
Allowance for loan losses as a percentage of
     non-performing loans                                                     187.64%             136.55%
Non-performing loans as  a percentage of
     total loans                                                                1.03%               1.39%
Non-performing assets as a percentage of
     total assets                                                               0.82%               1.06%
</TABLE>



                                       10
<PAGE>

The $1.7 million decrease in  non-performing  loans at June 30, 2000 as compared
to  September  30, 1999 was  attributable  primarily  to the  repayment of three
commercial  real estate loans and the  foreclosure  of another  commercial  real
estate loan which was transferred to other real estate owned and sold, partially
offset by the addition of four other  commercial  real estate loans.  Other real
estate owned decreased by $620,000, principally from a decrease of $796,000 from
the sale of a  commercial  real estate  property  in the quarter  ended June 30,
2000, partially offset by an increase of $176,000 in foreclosed residential real
estate.  The following table  summarizes the activity in other real estate owned
for the periods presented:


<TABLE>
<CAPTION>
                                                                                     Nine months ended June 30,
                                                                                    2000                      1999
                                                                                 -----------               -----------
                                                                                            (In thousands)
<S>                                                                              <C>                       <C>
Balance at the beginning of the period                                           $     1,845               $     1,872
       Loans transferred to other real estate                                          3,824                       369
       Sale of other real estate                                                      (4,065)                     (646)
       Write down of other real estate                                                  (379)                     (221)
                                                                                 -----------               -----------
Balance at the end of the period                                                 $     1,225               $     1,374
                                                                                 ===========               ===========
























</TABLE>



                                       11
<PAGE>

The allowance for loan losses was $11.6 million, or 1.93% of period end loans at
June 30,  2000,  as compared to $10.8  million,  or 1.90% of period end loans at
September  30,  1999.   The  allowance  for  loan  losses  as  a  percentage  of
non-performing  loans was 187.64% at June 30, 2000, as compared to 136.55% as of
September 30, 1999.  There were no loans past due 90 days and still  accruing at
June 30, 2000 or September 30, 1999. The following table summarizes the activity
in the allowance for loan losses:

<TABLE>
<CAPTION>
                                                                                             Nine months ended June 30,
                                                                                             2000                 1999
                                                                                           --------             --------
                                                                                                   (in thousands)
<S>                                                                                        <C>                  <C>
Allowance at the beginning of the period                                                   $ 10,764             $  8,260
         Charge-offs                                                                         (1,392)                (651)
         Recoveries                                                                             464                  204
                                                                                           --------             --------

         Net charge-offs                                                                       (928)                (447)
Provision for loan losses                                                                     1,807                2,437
                                                                                           --------             --------

Allowance at  end of the period                                                            $ 11,643             $ 10,250
                                                                                           ========             ========
</TABLE>


Total deposits were $560.7 million at June 30, 2000, a decrease of $2.6 million,
or 0.5% from the $563.4 million at September 30, 1999. The following table shows
the deposit composition as of the respective balance sheet dates:

<TABLE>
<CAPTION>
                                                                 June 30, 2000                      September 30, 1999
                                                                 -------------                      ------------------
                                                        (In Thousands)     % of Deposits    (In Thousands)      % of Deposits
<S>                                                        <C>                 <C>             <C>                   <C>
Savings accounts                                           $181,804            32.4%           $191,968              34.1%
Time accounts                                               216,460            38.6%            227,712              40.4%
Money market accounts                                        25,039             4.5%             20,348               3.6%
NOW & Super NOW accounts                                     91,251            16.3%             86,305              15.3%
Demand accounts                                              46,174             8.2%             37,040               6.6%
                                                           --------           -----            --------             -----
                                                           $560,728           100.0%           $563,373             100.0%
                                                           ========           =====            ========             =====

</TABLE>




                                       12
<PAGE>

The $2.6  million  decrease in deposits  from  September  30, 1999 is  primarily
attributable  to an $11.3  million  decrease in time  deposits,  a $10.2 million
decrease in savings  deposits,  partially  offset by a $14.1 million increase in
demand  deposits  and a $4.7  million  increase in money  market  accounts.  The
decline in time deposit  accounts is attributable to the lower rates paid by the
Company in the quarters  ended  December 31, 1999 and March 31, 2000 as compared
to some other financial institutions.  However, the Company is currently pricing
its time deposits more  competitively in order to retain its core deposits.  The
Company  has  recently  received  approval  from  the  New  York  State  Banking
Department to operate its commercial bank  subsidiary  through which the Company
intends to generate  additional  funding  through the  acceptance  of  municipal
deposits.  It is  anticipated  that the  commercial  bank will  begin  accepting
deposits sometime in the fourth fiscal quarter ending September 30, 2000.

The Company increased its borrowings with the FHLB to $153.1 million at June 30,
2000, an increase of $7.9 million from the $145.2 million at September 30, 1999.
The Company used the  additional  borrowings to offset the decrease in deposits,
to fund the loan growth, and to repurchase shares of the Company's common stock.

Shareholders'  equity at June 30, 2000 was $166.4  million,  a decrease of $14.1
million or 7.8% from the $180.4  million at September 30, 1999. The decrease was
principally  attributable  to the  repurchase  of 1.8  million  shares of common
stock.  The  Company  utilized  445,561  of the shares  purchased  for awards of
restricted stock under the Long-Term  Equity  Compensation  Plan.  Shareholders'
equity was  increased by the  Company's  $6.2  million of net income,  partially
offset by the $1.9 million of cash  dividends paid in the nine months ended June
30, 2000 and the $552,000  increase in  accumulated  other  comprehensive  loss.
Shareholders'  equity  was  also  increased  by  $593,000  for the  ESOP  shares
allocated as of December 31, 1999.

Shareholders' equity as a percentage of total assets was 18.43% at June 30, 2000
compared to 19.72% at September 30, 1999.



                                       13
<PAGE>

TABLE #1 AVERAGE BALANCE, INTEREST, YIELD AND RATE

The following table presents, 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,
expressed  both in  dollars  and rates.  Tax  equivalent  adjustments  reflected
principally  on municipal  securities  and  commercial  business  loans  totaled
$423,000 in the three month  period  ended June 30,  2000,  and $329,000 for the
comparable  three month period in 1999.  All average  balances are daily average
balances. Non-accruing loans have been included in the table as loans receivable
with interest earned recognized on a cash basis only.  Securities  available for
sale are shown at amortized cost
<TABLE>
<CAPTION>
                                                                                   For the three months ended June 30,
                                                                      --------------------------------------------------------------
                                                                                  2000                               1999
                                                                      -----------------------------      ---------------------------
                                                                      Average                Yield/      Average              Yield/
                                                                      Balance    Interest     Rate       Balance   Interest    Rate
                                                                      -----------------------------      ---------------------------
                                                                                          (Dollars in Thousands)
<S>                                                                   <C>        <C>         <C>        <C>         <C>        <C>
INTEREST-EARNING ASSETS:

         Total loans                                                  $601,206   $11,700     7.78%      $510,722    $10,031    7.86%
         Loans held for sale                                             1,438        32     8.90%         4,212         71    6.74%
         Investment securities held to maturity                          2,406        48     7.98%         2,675         54    8.07%
         Securities available for sale:
            Taxable                                                     96,239     1,704     7.08%       100,389      1,343    5.35%
            Tax-exempt                                                  71,528     1,141     6.38%        62,306        899    5.77%
                                                                      --------   -------                --------    -------

                        Total securities available for sale            167,767     2,845     6.78%       162,695      2,242    5.51%
         Federal funds sold and other short-term investments            12,265       178     5.81%       106,718      1,277    4.79%
                                                                      --------   -------                --------    -------

                        Total interest-earning assets                  785,082    14,803     7.54%       787,022     13,675    6.95%

INTEREST-BEARING LIABILITIES:
     Deposits:
         NOW and Super NOW accounts                                     88,197       483     2.19%        80,748        438    2.17%
         Money market accounts                                          21,819       174     3.19%        18,571        136    2.93%
         Savings accounts                                              183,205     1,296     2.83%       192,109      1,309    2.73%
         Time deposit accounts                                         215,903     2,722     5.04%       239,353      2,893    4.83%
         Conversion funds in escrow                                         --        --       --          6,130         43    2.81%
         Escrow accounts                                                 3,789        19     2.01%         3,693         18    1.95%
                                                                      --------   -------                --------    -------
                        Total interest-bearing deposits                512,913     4,694     3.66%       540,604      4,837    3.58%
     Borrowings:

         Securities sold under agreements to repurchase                  9,511       130     5.47%         2,780         22    3.17%
         Short-term borrowings                                          20,417       341     6.68%         5,785         72    4.98%
         Long-term debt                                                 54,077       800     5.92%        44,863        649    5.79%
                                                                      --------   -------                --------    -------
                        Total borrowings                                84,005     1,271     6.05%        53,428        743    5.56%
                                                                      --------   -------                --------    -------

                        Total interest-bearing liabilities             596,918     5,965     4.00%       594,032      5,580    3.76%

     Net interest spread                                                                     3.54%                             3.19%


     Net interest income / net interest margin                                     8,838     4.50%                    8,095    4.11%

     Ratio of interest-earning assets to
     interest-bearing liabilities                                                          131.52%                           132.49%

     Tax equivalent adjustment                                                       423                                329
                                                                                 -------                            -------


     Net interest income as per consolidated financial statements                 $8,415                             $7,766
                                                                                 =======                            =======


</TABLE>



                                       14
<PAGE>

COMPARISON  OF  OPERATING  RESULTS FOR THE THREE  MONTHS ENDED JUNE 30, 2000 AND
1999

GENERAL

For the three  months ended June 30,  2000,  the Company  recorded net income of
$2.3  million,  an  increase  of  $339,000  as  compared to a net income of $2.0
million  for the three  month  period  ended June 30,  1999.  The  increase  was
principally  the  result of higher  net  interest  income,  a  reduction  in the
provision for loan losses, and slightly higher  non-interest  income,  which was
partially offset by higher non-interest  expenses and higher income tax expense.
The Company's  diluted  earnings per share were $0.23 for the three months ended
June 30, 2000, as compared to $0.16 for the three months ended June 30, 1999.

Annualized return on average assets for the three months ended June 30, 2000 and
1999, was 1.11% and .95%,  respectively,  and the Company's annualized return on
average equity was 5.44% and 4.33%, respectively.

NET INTEREST INCOME

Net interest  income on a tax  equivalent  basis for the three months ended June
30, 2000, was $8.8 million,  an increase of $743,000,  or 9.2%, when compared to
the three months ended June 30, 1999. The increase was primarily attributable to
a 59 basis point  increase  in the yield on average  earning  assets,  which was
partially  offset by the 24 basis point  increase in the average  cost of funds.
Net interest  income was  negatively  impacted by the $1.9  million  decrease in
average earning assets and the $2.9 million increase in average interest bearing
liabilities.  The decrease in average  earning  assets was the result of a $94.5
million  decrease in average  federal funds sold and a $2.8 million  decrease in
average loans held for sale,  partially  offset by a $90.5  million  increase in
average loans.  The increase in average  interest  bearing  liabilities  was the
result of an increase in average  borrowings of $30.6 million,  partially offset
by a decrease in average  deposits


                                       15
<PAGE>


of $27.7  million,  primarily  the result of a $23.5  million  decrease  in time
deposit  accounts,  an $8.9  million  decrease in savings  accounts,  and a $6.1
million decrease in conversion funds held in escrow,  partially offset by a $7.4
million  increase in  interest-bearing  checking and a $3.2 million  increase in
money market accounts.

Interest and dividend  income for the three months ended June 30, 2000 was $14.8
million on a tax equivalent  basis,  an increase of $1.1 million,  or 8.2%, over
the prior year. The increase was  principally due to the 59 basis point increase
in the yield on average  earning  assets,  partially  offset by the  decrease in
volume of average earning assets.

The average  yield on taxable  available  for sale  securities  increased by 173
basis  points for the three  months  ended June 30,  2000,  compared to the same
period in 1999,  which more than  offset the $4.2  million  decrease  in average
balance of taxable available for sale securities.  The Company has also invested
in tax-exempt  municipal  securities,  primarily  maturing  within one year. The
average tax equivalent yield on these securities for the three months ended June
30, 2000 was 6.38%, 61 basis points higher than the yield for the same period in
1999,  and 57 basis points  higher than the average  yield on federal funds sold
and other  short-term  investments for the three months ended June 30, 2000. The
average loan yield for the three  months  ended June 30, 2000 was 7.78%,  down 8
basis points from the same period in the previous year, but was 100 basis points
more than the 6.78% average yield on available for sale securities.

Interest expense for the three months ended June 30, 2000, was $6.0 million,  an
increase of  $385,000,  or 6.9% over the three month period ended June 30, 1999.
The change was primarily the result of a 24 basis point  increase in the average
cost  of  funds  and  the  increase  in  average  volume  of  interest   bearing
liabilities.  The average  balance of interest  bearing  liabilities  was $596.9
million for the three months ended June 30, 2000,  an increase of $2.9  million,
or .5%,  from the  prior  year's  comparable  period.  The  average  balance  of
borrowings  was $84.0  million  for the three  months  ended June 30,  2000,  as
compared to $53.4 million in the  comparable  three month period last year.  The
increase in short-term  borrowings partially offset the $30.6 million decline in
time deposit accounts, which the Company experienced as a result of time deposit
rates  offered  at  slightly  lower  rates  than  other  financial  institutions
operating  in the  Company's  primary  market  area.  However,  the  Company  is
currently  pricing its time deposits more  competitively  in order to retain its
core deposits.

The Company's net interest  margin was 4.50% for the three months ended June 30,
2000,  compared  to 4.11% for the  comparable  three month  period.  The primary
factor was the 59 basis point increase in the yield on average  earning  assets,
partially  offset by the 24 basis point  increase in the average  cost of funds.
The increase in cost of funds was  principally  caused by the increase in volume
of  average  borrowings  and  the  increase  in the  average  rates  paid on the
borrowings, as well as an increase on rates paid on average deposits,  partially
offset by the  decrease in the volume of average  deposits.  The increase in the
yield on interest earning assets was caused by the redeployment of a substantial
portion of the proceeds from the  Company's  initial  public  offering in loans,
primarily  commercial  real estate and commercial  business  loans,  with higher
yields than securities or federal funds and other short-term investments.

                                       16
<PAGE>

For more information on average  balances,  interest,  yields and rates,  please
refer to Table #1, included in this report.

PROVISION FOR LOAN LOSSES

The Company  establishes  an allowance  for loan losses  through a provision for
loan losses charged to  operations.  The adequacy of the amount of the allowance
is determined by management's evaluation of various risk factors inherent in the
loan  portfolio.  This  analysis  takes into  consideration  such factors as the
historical  loan loss  experience,  changes in the nature and volume of the loan
portfolio,  overall  portfolio  quality,  review of specific  problem  loans and
current economic conditions that may affect borrowers' ability to pay.

The  provision  for loan losses was $469,000 for the three months ended June 30,
2000, a decrease of $343,000,  or 42.2%,  from the provision of $812,000 for the
comparable  period of the prior year.  The  allowance  for loan losses was $11.6
million,  or 1.93% of period end loans at June 30,  2000,  as  compared to $10.8
million,  or 1.90% of period end loans at September 30, 1999.  The allowance for
loan losses as a percentage of non-performing loans was 187.64% at June 30, 2000
as compared to 136.55% at  September  30, 1999.  Non-performing  loans were $6.2
million,  or 1.03% of total loans at June 30, 2000, compared to $7.9 million, or
1.39% of total loans at September  30, 1999.  The  provision for loan losses was
reduced in the quarter  ended June 30,  2000,  primarily as a result of the $2.2
million  decline in  non-performing  loans, or 26.6%, as compared to the quarter
ended June 30, 1999,  offset by continued loan growth in commercial  real estate
and commercial  business  loans.  Non-performing  loans represent 1.03% of total
loans as of June 30, 2000,  down from 1.39% at September 30, 1999,  and 1.60% at
June 30, 1999.

Commercial  real estate loans and commercial  business loans  represent 52.3% of
the total loan  portfolio at June 30, 2000  compared to 49.9% at  September  30,
1999.

NON-INTEREST INCOME

Non-interest  income was $794,000  for the three months ended June 30, 2000,  an
increase of $14,000,  or 1.8% from the three  months  ended June 30,  1999.  The
increase  was  principally  due to the $57,000  increase  in service  charges on
deposits,  primarily from an increase in fees related to checks  received during
the quarter ended June 30, 2000 with  insufficient  funds, a $15,000 increase in
trust  service  fees,  and a $135,000  increase  in other  non-interest  income,
principally from commissions on life insurance, as well as a gain on sale of the
Bank's  supermarket  branch (no deposits were sold).  The increase was partially
offset by a $39,000  decrease  in loan  servicing  fees,  as the volume of loans
originated  for sale has declined  significantly  in the quarter  ended June 30,
2000, as compared to the same period in 1999, as well as a $125,000  increase in
net losses from securities transactions,  a significant portion of which relates
to losses for certain lower  yielding  securities for which the Company made the
decision to sell in the quarter ended June 30, 2000.

NON-INTEREST EXPENSES

Non-interest  expenses  for the  three  months  ended  June 30,  2000  were $5.4
million,  an increase of $536,000,  or 10.9%,  from the same period in 1999. The
increase was principally due to a $498,000 increase in compensation and employee
benefits due primarily to the  additional  costs in the 2000 period for the ESOP
and the restricted stock awards. The increase was also attributable to a $58,000
increase in computer charges,  primarily due to increases in monthly  processing
charges and special  programming  costs  associated with the commercial bank and
the bank holding company,  a $101,000 increase in printing and postage expenses,
primarily  as a result  of the  costs  of a direct  mail  program  for  personal
unsecured  loans,  and a  $137,000  increase  in  other  non-interest  expenses,
primarily costs associated with establishing the commercial bank, an increase in
Delaware  franchise tax expense,  and costs related to the  implementation  of a
debit card,  partially offset by a $335,000  decrease in other real estate owned
expense.  The decrease in other real estate owned expense was principally due to
a $320,000 gain on sale of a foreclosed  commercial  real estate  property which
occurred in the quarter ended June 30, 2000.

                                       17
<PAGE>

INCOME TAX EXPENSE

Income tax expense for the three months ended June 30, 2000,  was $1.0  million,
as compared to $874,000  for the  comparable  period in 1999.  The  increase was
primarily  caused by the $470,000  increase in income before taxes for the three
months ended June 30, 2000, as compared to the same period in the prior year.

TABLE #2 AVERAGE BALANCE, INTEREST, YIELD AND RATE

The following table presents, 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,
expressed  both in  dollars  and rates.  Tax  equivalent  adjustments  reflected
principally on municipal  securities and commercial  business loans totaled $1.2
million in the nine month  period  ended June 30,  2000,  and  $868,000  for the
comparable nine month period.  All average balances are daily average  balances.
Non-accruing  loans have been  included  in the table as loans  receivable  with
interest earned recognized on a cash basis only.  Securities  available for sale
are shown at amortized cost

<TABLE>
<CAPTION>
                                                                               For the nine months ended June 30,
                                                                 ------------------------------------------------------------------
                                                                              2000                                 1999
                                                                 -------------------------------      -----------------------------
                                                                 Average                  Yield/      Average                Yield/
                                                                 Balance     Interest      Rate       Balance     Interest    Rate
                                                                 -------------------------------      -----------------------------
                                                                                        (Dollars in Thousands)
<S>                                                              <C>         <C>           <C>        <C>         <C>          <C>
INTEREST-EARNING ASSETS:
         Total loans                                             $591,322    $ 34,343      7.74%      $492,587    $ 28,963     7.84%
         Loans held for sale                                        2,162         130      8.02%         5,914         341     7.69%
         Investment securities held to maturity                     2,461         147      7.96%         2,909         172     7.88%
         Securities available for sale:
             Taxable                                              113,736       5,556      6.51%       121,543       4,811     5.28%
             Tax-exempt                                            71,240       3,289      6.16%        56,248       2,442     5.79%
                                                                 --------    --------                 --------    --------
                  Total securities available for sale             184,976       8,845      6.38%       177,791       7,253     5.44%
         Federal funds sold and other short-term investments       12,372         533      5.74%        53,315       1,947     4.87%
                                                                 --------    --------                 --------    --------

                  Total interest-earning assets                   793,293      43,998      7.39%       732,516      38,676     7.04%

INTEREST-BEARING LIABILITIES:

      Deposits:
         NOW and Super NOW accounts                                87,085       1,435      2.20%        79,684       1,308     2.19%
         Money market accounts                                     19,814         458      3.08%        18,141         407     2.99%
         Savings accounts                                         186,191       3,960      2.84%       196,847       4,215     2.85%
         Time deposit accounts                                    218,906       8,015      4.88%       248,010       9,433     5.07%
         Conversion funds in escrow                                    --          --        --         12,090         253     2.79%
         Escrow accounts                                            2,975          41      1.84%         2,883          38     1.76%
                                                                 --------    --------                 --------    --------
                  Total interest-bearing deposits                 514,971      13,909      3.60%       557,655      15,654     3.74%
      Borrowings:
         Securities sold under agreements to repurchase            20,107         854      5.66%         3,519          84     3.18%
         Short-term borrowings                                     27,611       1,232      5.95%         5,747         206     4.78%
         Long-term debt                                            48,505       2,135      5.87%        44,458       1,944     5.83%
                                                                 --------    --------                 --------    --------
                  Total borrowings                                 96,223       4,221      5.85%        53,724       2,234     5.54%
                                                                 --------    --------                 --------    --------

                  Total interest-bearing liabilities              611,194      18,130      3.96%       611,379      17,888     3.90%


      Net interest spread                                                                  3.43%                               3.14%

      Net interest income / net interest margin                                25,868      4.35%                    20,788     3.78%

      Ratio of interest-earning assets to
         interest-bearing liabilities                                                    129.79%                             119.81%

      Tax equivalent adjustment                                                 1,234                                  868
                                                                             --------                             --------


      Net interest income as per consolidated financial statements           $ 24,634                             $ 19,920
                                                                             ========                             ========

</TABLE>

                                       18
<PAGE>

COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED JUNE 30, 2000 AND 1999

GENERAL

For the nine months ended June 30, 2000, the Company recorded net income of $6.2
million,  an increase of $5.9  million,  as compared to a net income of $314,000
for the nine month period ended June 30, 1999. The increase was  principally the
result of higher net  interest  income,  a reduction in the  provision  for loan
losses,  lower  non-interest  expenses,  as a result of the $4.1  million  stock
contribution  to The Troy Savings Bank Community  Foundation made in the quarter
ended March 31, 1999, and higher non-interest income, partially offset by higher
income tax expense.  The Company's diluted earnings per share were $0.61 for the
nine months ended June 30, 2000.

The annualized  return on average assets for the nine months ended June 30, 2000
and 1999, was 0.99% and 0.05%, respectively, and the Company's annualized return
on average equity was 4.84% and 0.39%, respectively.

NET INTEREST INCOME

Net interest income on a tax equivalent basis for the nine months ended June 30,
2000, was $25.9 million, an increase of $5.1 million, or 24.4%, when compared to
the nine months ended June 30, 1999. The increase was primarily  attributable to
a $60.8 million  increase in average interest earning assets funded primarily by
the net proceeds from the Company's  initial  public  offering on March 31, 1999
and to a much lesser extent the $185,000  decrease in average  interest  bearing
liabilities.

The  decrease  in  average  interest  bearing  liabilities  was the  result of a
decrease in deposits of $42.7  million,  primarily the result of a $29.1 million
decrease in time deposit accounts,  a $10.7 million decrease in savings accounts
and a $12.1 million  decrease in  subscription  funds held in escrow,  partially
offset by a $7.4 million increase in interest-bearing  checking,  a $1.7 million
increase in money market  accounts,  and a $42.5 million increase in borrowings.
Net interest income was also positively  affected by the 35 basis point increase
in the yield on average  earning assets,  partially  offset by the 6 basis point
increase in the average cost of funds.

Interest and  dividend  income for the nine months ended June 30, 2000 was $44.0
million on a tax equivalent  basis, an increase of $5.3 million,  or 13.8%, over
the prior year's period. The increase was principally due to the increase in the
volume of earning  assets as well as the 35 basis point  increase in the average
yield on interest earning assets.

The average  yield on taxable  available  for sale  securities  increased by 123
basis  points for the nine  months  ended June 30,  2000,  compared  to the same
period in 1999,  which more than  offset the $7.8  million  decrease  in average
balance of taxable  available for sale  securities.  The Company has invested on
average for the nine months ended June 30, 2000,  approximately $37.8 million in
short-term  government  agency  discount  bonds to preserve  certain  thrift tax
advantages  while  providing  liquidity  comparable  to federal  funds and still
offering a yield slightly  higher than the 5.74% average yield for federal funds
sold.  The average loan yield for the nine months ended June 30, 2000 was 7.74%,
down 10 basis  points from the same  period in the  previous  year,  but was 136
basis points more than the 6.38% average yield on available for sale securities.
The Company has also  invested in  tax-exempt  municipal  securities,  primarily
maturing within one year. The average tax equivalent  yield on these  securities
for the nine months ended June 30,

                                       19
<PAGE>


2000 was 6.16%,  37 basis  points  higher  than the yield for the same period in
1999,  and 42 basis points  higher than the average  yield on federal funds sold
and other short-term investments for the nine months ended June 30, 2000.

Interest expense for the nine months ended June 30, 2000, was $18.1 million,  an
increase of  $242,000,  or 1.4% over the nine month  period ended June 30, 1999.
The increase was principally due to a 6 basis point increase in the average cost
of funds, partially offset by the decrease in average volume of interest bearing
liabilities.  The average  balance of interest  bearing  liabilities  was $611.2
million for the nine months  ended June 30,  2000,  a decrease of  $185,000,  or
0.03%.  The average  balance of borrowings was $96.2 million for the nine months
ended June 30, 2000, as compared to $53.7 million in the  comparable  nine month
period. The increase in borrowings more than offset the $29.1 million decline in
time deposit accounts, which the Company experienced as a result of time deposit
rates  offered  at  slightly  lower  rates  than  other  financial  institutions
operating in the Company's primary market area.

The Company's  net interest  margin was 4.35% for the nine months ended June 30,
2000, compared to 3.78% for the comparable nine month period. The primary factor
was a $60.8 million  increase in average  earning  assets,  due primarily to the
Company's  initial  public  offering on March 31, 1999,  as well as the 35 basis
point increase in the average yield on earning assets, partially offset by the 6
basis point  increase in average cost of funds.  The increase in average cost of
funds was principally caused by the increase in volume of average borrowings and
the increase in the average rates paid on the  borrowings,  partially  offset by
the decrease in the volume of average deposits and the decrease in rates paid on
time deposit accounts.  The increase in the yield on interest earning assets was
caused by the  investment of a substantial  portion of the offering  proceeds in
loans,  primarily  commercial real estate and commercial  business  loans,  with
higher yields than securities or federal funds and other short term investments.

For more information on average  balances,  interest,  yields and rates,  please
refer to Table #1, included in this report.

PROVISION FOR LOAN LOSSES

The  provision  for loan losses was $1.8  million for the nine months ended June
30,  2000, a decrease of $630,000,  or 25.9% from the  comparable  period of the
prior year. The allowance for loan losses was $11.6 million,  or 1.93% of period
end loans at June 30, 2000, as compared to $10.8 million, or 1.90% of period end
loans at September  30, 1999.  The  allowance for loan losses as a percentage of
non-performing  loans was  187.64% at June 30,  2000 as  compared  to 136.55% at
September 30, 1999.  Non-performing  loans were $6.2 million,  or 1.03% of total
loans at June 30,  2000,  compared to $7.9  million,  or 1.39% of total loans at
September 30, 1999. Net loan charge-offs  increased  $481,000 for the nine month
period  ended June 30, 2000 as compared  to same  period in 1999.  However,  the
provision  for loan losses was reduced in the nine months  ended June 30,  2000,
primarily as a result of the $1.7 million,  or 21.3%,  decline in non-performing
loans from September 30, 1999 to June 30, 2000.  Non-performing  loans represent
1.03% of total loans as of June 30, 2000, down from 1.39% at September 30, 1999.

                                       20
<PAGE>

NON-INTEREST INCOME

Non-interest income was $2.6 million for the nine months ended June 30, 2000, an
increase of $371,000,  or 16.5% from the nine months  ended June 30,  1999.  The
increase was  principally  due to the receipt of a $382,000  award from the U.S.
Government  as a result of  originating  commercial  real  estate  loans,  which
qualified under the U.S.  Treasury's Bank Enterprise Award program, as well as a
$49,000  increase in trust  service  fees,  or 10.2% from the same period of the
prior year, and a $126,000 increase in service charges on deposit  accounts,  or
18.9%, compared to the same period of the prior year. The increase was partially
offset by a $286,000  decrease in net gains from  mortgage loan sales due to the
substantially  lower  volume  in the  2000  period,  as well as an  increase  of
$129,000 in net losses on securities transactions.

NON-INTEREST EXPENSES

Non-interest  expenses  for the nine  months  ended  June 30,  2000  were  $16.7
million, a decrease of $3.4 million, or 17.0%, from the same period in 1999. The
decrease was principally due to the $4.1 million stock  contribution made in the
quarter ended March 31, 1999 to The Troy Savings Bank  Community  Foundation and
the decrease in other real estate owned expense,  partially  offset by increases
in  compensation  and employee  benefits,  furniture,  fixtures  and  equipment,
computer  charges,  and professional  fees.  Compensation and employee  benefits
increased  by $1.4  million  during  the nine  months  ended June 30,  2000,  as
compared to the prior year,  due primarily to the  additional  costs in the 2000
period for the ESOP and the  restricted  stock awards.  Furniture,  fixtures and
equipment  increased  by $66,000,  or 12.0%,  compared to the same period of the
prior year,  primarily the result of the additional  operating  costs related to
the  opening  of the  Wynantskill  branch in  December  1999.  Computer  charges
increased by $134,000, primarily due to increased processing charges, as well as
special  programming  costs  associated  with the  commercial  bank and the bank
holding company.  Professional fees increased by $75,000,  or 7.7%, for the nine
months  ended  June 30,  2000,  over the  comparable  period of the prior  year,
primarily  due an  increase  in  costs  related  to  operating  as a stock  form
organization,  partially  offset by costs for consulting fees for establishing a
profitability  measurement  system, Y2K technology  evaluations,  administrative
costs for the ESOP and 401K plans,  and  administrative  costs to establish  the
Small  Business  Investment  Company  incurred in the nine months ended June 30,
1999. Other real estate owned expense  decreased  $791,000,  or 116.0%,  for the
nine months  ended June 30,  2000,  as compared to the same period in 1999.  The
decrease in expense was principally due to a write-down in value of a foreclosed
commercial  real estate  property and costs related to payment of taxes on other
real estate owned which occurred in the nine months ended June 30, 1999, as well
as a $320,000  gain on sale of a  foreclosed  commercial  real  estate  property
during the nine months ended June 30, 2000. Other expense decreased by $259,000,
or 10.7%,  for the nine  months  ended June 30,  2000,  as  compared to the nine
months  ended June 30,  1999.  This  decrease was  primarily  attributable  to a
$382,000 expense for Year 2000 remediation  efforts in the 1999 period,  as well
as the write-off of overdraft escrow accounts, in the nine months ended June 30,
1999,  partially  offset by increased  costs in the same period of 2000 for cash
reserves maintained for Year 2000 liquidity purposes,  advertising and marketing
costs

                                       21
<PAGE>


related to the opening of the Wynantskill  branch,  deferred  compensation costs
for  directors,   costs   associated  with  servicing   loans,   costs  for  the
establishment of the commercial bank, and costs related to the implementation of
a debit card.

INCOME TAX EXPENSE

Income tax expense for the nine months ended June 30, 2000,  was $2.5 million as
compared to an income tax benefit of $741,000 for the comparable period in 1999.
The increase was primarily  caused by the $9.2 million increase in income before
taxes for the nine months ended June 30, 2000, as compared to the same period in
the prior year.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity  is the  ability to  generate  cash flows to meet  present  and future
financial  obligations  and  commitments.   Management  monitors  its  liquidity
position on a daily basis to determine  that the Company has adequate  liquidity
to fund loan commitments,  meet daily withdrawal requirements of depositors, and
meet all other daily obligations of the Company.

The primary  sources of funds are deposits,  borrowings,  loan  repayments,  and
proceeds  from the  redemption  and  maturity  of  federal  funds sold and other
short-term  securities.  The  Company's  primary  cash  outflows  are  new  loan
originations,  purchases of securities,  deposit  withdrawals,  and common stock
repurchases.  The  Company  monitors  the cash  outflows  and inflows on a daily
basis. Although maturities and scheduled amortization of loans are a predictable
source of funds, deposit outflows,  mortgage prepayments and mortgage loan sales
are greatly influenced by changes in interest rates,  economic  conditions,  and
competitors.

The Company  attempts to provide stable and flexible  sources of funding through
the  management of its  liabilities,  including  core deposit  products  offered
through its branch network,  as well as FHLB advances.  Management believes that
the level of the Company's  liquid assets combined with daily monitoring of cash
inflows  and  outflows  provide  adequate  liquidity  to fund  outstanding  loan
commitments, meet daily withdrawal requirements of the Company's depositors, and
meet all other daily obligations of the Company.

Consistent  with  its  goals  to  operate  a  sound  and  profitable   financial
organization,  the  Company  actively  seeks to  maintain  a "well  capitalized"
institution in accordance  with  regulatory  standards.  As of June 30, 2000 and
September  30,  1999,  total  equity was  $166.4  million  and  $180.4  million,
respectively,  or 18.4% and 19.7% of total assets at those respective dates. The
reduction  in the  equity  to  assets  ratio is  consistent  with the  Company's
strategy to manage its capital  through  asset  growth,  dividend  payments,  as
reflected by the $.05 per share cash  dividend  paid during each of the quarters
ended December 31, 1999 and March 31, 2000, and the $.06 per share cash dividend
paid  during the  quarter  ended June 30,  2000,  as well as a share  repurchase
program.  The Company has repurchased  1,092,511  shares of common stock, or all
9.0% of the first approved stock  repurchase  program,  and 635,000 shares under
its second approved stock repurchase program in the nine month period ended June
30, 2000. The Company  utilized 446,165 of these shares for awards of restricted
stock under the  Company's  Long-Term  Equity  Compensation  Plan.  In addition,
87,900 shares were purchased by the Company through a deferred compensation plan
maintained for directors. The cost basis of these shares is included in treasury
stock.


                                       22

<PAGE>

The  following  is a summary  of the  Company's  and the Bank's  actual  capital
amounts  and  ratios at June 30,  2000,  compared  to the FDIC  minimum  capital
requirements:

<TABLE>
<CAPTION>
                                                                     Actual                          Ratio requirements
                                                                    --------                       ----------------------
                                                                                                 Minimum      Classification
                                                                                                 Capital         as Well
                                                           Amount                 %              Adaquecy      Capitalized
                                                          --------              ------           --------      -----------
                                                              (dollars in thousands)
<S>                                                       <C>                   <C>                <C>             <C>
Leverage (Tier I) Capital:
    Bank                                                  $128,584              15.30%             4.00%           5.00%
    Consolidated                                          $166,707              20.19%             4.00%           5.00%

Tier 1 Risk-based capital:
    Bank                                                  $128,584              18.67%             4.00%           6.00%
    Consolidated                                          $166,707              24.90%             4.00%           6.00%

Total Risk-Based Capital:
    Bank                                                  $137,194              19.92%             8.00%          10.00%
    Consolidated                                          $175,076              26.15%             8.00%          10.00%
</TABLE>

FORWARD-LOOKING STATEMENTS

When used in this Form 10-Q or other filings by the Company with the  Securities
and Exchange  Commission,  in the  Company's  press  releases or other public or
shareholder  communications,  or in oral statements made with the approval of an
authorized  executive officer,  the words or phrases "will likely result",  "are
expected    to",    "will    continue",     "is    anticipated",     "estimate",
"project","believe",   or  similar   expressions   are   intended   to  identify
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation Reform Act of 1995. In addition,  certain disclosures and information
customarily provided by financial institutions, such as analysis of the adequacy
of the allowance for loan losses or an analysis of the interest rate sensitivity
of the Company's assets and  liabilities,  are inherently based upon predictions
of future events and circumstances.  Furthermore, from time to time, the Company
may  publish  other  forward-looking  statements  relating  to such  matters  as
anticipated financial performance, business prospects, and similar matters.

The Private Securities  Litigation Reform Act of 1995 provides a safe harbor for
forward-looking  statements.  In order  to  comply  with  the  terms of the safe
harbor,  the Company  notes that a variety of factors  could cause the Company's
actual results and experience to differ materially from the anticipated  results
or other  expectations  expressed in the Company's  forward-looking  statements.
Some of the risks and uncertainties that may affect the operations, performance,
development and results of the Company's business, the interest rate sensitivity
of its  assets and  liabilities,  and the  adequacy  of its  allowance  for loan
losses, include but are not limited to the following:

o        Deterioration   in  local,   regional,   national  or  global  economic
         conditions  which could result,  among other things,  in an increase in
         loan  delinquencies,  a decrease in property values, or a change in the
         housing turnover rate;

o        changes  in  market  interest  rates or  changes  in the speed at which
         market interest rates change;

o        changes  in  laws  and  regulations  affecting  the  financial  service
         industry;


                                       23

<PAGE>


o        changes in competition; and

o        changes in consumer preferences.

The  Company  wishes to  caution  readers  not to place  undue  reliance  on any
forward-looking statements,  which speak only as of the date made, and to advise
readers that various factors,  including those described above, could affect the
Company's financial  performance and could cause the Company's actual results or
circumstances  for future periods to differ materially from those anticipated or
projected.

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

ITEM 3:  Quantitative and Qualitative Disclosures About Market Risk

Interest rate risk is the most  significant  market risk  affecting the Company.
Other types of market risk,  such as foreign  exchange  rate risk and  commodity
price  risk,  do not  arise  in the  normal  course  of the  Company's  business
activities.

Interest rate risk can be defined as an exposure to a movement in interest rates
that could have an adverse effect on the Company's net interest income. Interest
rate risk arises naturally from the imbalance in repricing, maturity and/or cash
flow   characteristics   of  assets  and  liabilities.   When  interest  bearing
liabilities  mature or reprice on a different basis than interest earning assets
in a given  period,  a  significant  increase in market rates of interest  could
adversely  effect net interest income.  Similarly,  when interest earning assets
mature or reprice more quickly than interest bearing liabilities,  a significant
decline in market rates of interest could decrease net interest income.

In an attempt to manage its  exposure to changes in interest  rates,  management
monitors  the  Company's  interest  rate  risk.   Management's  asset  liability
management  committee  ("ALCO")  meets at least  monthly to review  consolidated
balance  sheet  structure,  formulate  strategy  in light of  expected  economic
conditions  and review  performance  against  guidelines  established to control
exposure to the various  types of inherent  risk,  and reports the interest rate
risk  position  to the  Board of  Directors  on a  quarterly  basis.  ALCO  also
evaluates  the overall  risk  profile  and  determines  actions to maintain  and
achieve a posture consistent with policy guidelines.  The Company cannot predict
the future movement of interest  rates,  and such movement could have an adverse
impact  on  the  Company's  consolidated  financial  condition  and  results  of
operations.

The  Company,  in order to manage  its  exposure  to  interest  rate  risk,  has
emphasized the origination of adjustable rate residential  mortgage,  commercial
real estate,  commercial business and consumer loans; sells substantially all of
its fixed rate  residential  mortgage  loans in the secondary  market,  although
recently  the  Company is holding its 15-year  fixed rate  residential  mortgage
loans in portfolio; utilizes FHLB advances to better structure the maturities of
its

                                       24
<PAGE>


interest rate sensitive liabilities;  and invests in short-term securities which
generally  bear lower yields,  compared to  longer-term  investments,  but which
better position the Company for increases in interest rates.

In order to reduce the  interest  rate risk  associated  with the  portfolio  of
conventional  mortgage  loans  held  for  sale,  as  well  as  outstanding  loan
commitments and uncommitted  loan  applications  with rate lock agreements which
are intended to be held for sale,  the Company  enters into  agreements  to sell
loans in the secondary  market to unrelated  investors on a loan-by-loan  basis,
and may also enter into option agreements.

There  have  been  no  significant   changes  in  the  Company's  interest  rate
sensitivity since September 30, 1999.

PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

         None

ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS

         None

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

         None

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None

ITEM 5 - OTHER INFORMATION

         None

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits.

                  10.      Agreement  and Plan of  Merger  dated   as of June 7,
                           2000 by and among Troy Financial Corporation, Charlie
                           Acquisition   Corporation,   and  Catskill  Financial
                           Corporation.

                  27.      Financial Data Schedule

         (b)      Reports on 8-K.

                  None


                                      II-1
<PAGE>

                                   SIGNATURES

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

                                      TROY FINANCIAL CORPORATION
                                      (Registrant)

Date:    August 11, 2000              /s/ Daniel J. Hogarty, Jr.
                                      --------------------------
                                      Daniel J. Hogarty, Jr.
                                      Chairman of the Board, President and
                                        Chief Executive Officer



                                      /s/ Edward M. Maziejka, Jr.
                                      ---------------------------
                                      Edward M. Maziejka, Jr.
                                      Vice President and Chief Financial Officer


                                      II-2



                                       20
<PAGE>

                                 EXHIBIT INDEX
                                 -------------



10.      Agreement  and Plan of  Merger  dated   as of June 7,
         2000 by and among Troy Financial Corporation, Charlie
         Acquisition   Corporation,   and  Catskill  Financial
         Corporation.

27.      Financial Data Schedule