<PAGE>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934


                  For the fiscal year ended December 31, 1999

                                    0-28886
                            Commission File Number

                             ROSLYN BANCORP, INC.
           --------------------------------------------------------
             (Exact name of registrant as specified in its charter.)

                  Delaware                         11-3333218
             --------------------            ---------------------
              (State or Other                     (I.R.S. Employer
             Jurisdiction of                  Identification No.)
             Incorporation or
             Organization)


             1400 Old Northern Boulevard, Roslyn, New York  11576
           --------------------------------------------------------
            (Address of Principal Executive Offices)    (Zip Code)

                                (516) 621-6000
           --------------------------------------------------------
             (Registrant's telephone number, including area code)

                                     None
           --------------------------------------------------------
          Securities registered pursuant to Section 12(b) of the Act

                         Common Stock, $.01 par value
           --------------------------------------------------------
          Securities registered pursuant to Section 12(g) of the Act


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                           Yes [ X ]    No [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.

As of March 14, 2000 the aggregate market value of the voting stock held by non-
affiliates of the registrant was $1,069,159,437.  This figure is based on the
closing price on the NASDAQ National Market for a share of the registrant's
common stock on March 14, 2000 which was $15.5625 as reported in the Wall Street
Journal on March 15, 2000.

The Registrant had 68,701,008 shares of Common Stock outstanding as of March 14,
2000.
<PAGE>

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to Stockholders for the year ended December 31,
1999 are incorporated by reference into Part II of this Form 10-K.

Portions of the Proxy Statement for the 2000 Annual Meeting of Stockholders are
incorporated by reference into Part III of this Form 10-K.

                                       2
<PAGE>

                                     INDEX

                                                                           Page
                                                                            No.
                                                                          ------
PART I

  Item 1.   Business..................................................       4

  Item 2.   Properties................................................      49

  Item 3.   Legal Proceedings.........................................      54

  Item 4.   Submission of Matters to a Vote of Security Holders.......      54

PART II

  Item 5.   Market for the Company's Common Equity and Related
            Stockholder Matters.......................................      54

  Item 6.   Selected Financial Data...................................      54

  Item 7.   Management's Discussion and Analysis of Financial
            Condition and Results of Operations.......................      54

  Item 7A.  Quantitative and Qualitative Disclosures about Market Risk.     54

  Item 8.   Financial Statements and Supplementary Data...............      54

  Item 9.   Changes in and Disagreements with Accountants on
            Accounting and Financial Disclosure.......................      54


PART III

  Item 10.  Directors and Executive Officers of the Company...........      55

  Item 11.  Executive Compensation....................................      55

  Item 12.  Security Ownership of Certain Beneficial Owners
            and Management............................................      55

  Item 13.  Certain Relationships and Related Transactions............      55


PART IV

  Item 14.  Exhibits, Financial Statement Schedules, and
            Reports on Form 8-K.......................................      55

SIGNATURES............................................................      58

                                       3
<PAGE>

                                     PART I


Item 1. Business.
-----------------

     General

     Roslyn Bancorp, Inc. and subsidiaries (also referred to as the Company or
Registrant) was incorporated under Delaware law on July 26, 1996.  On January
10, 1997, the Registrant acquired The Roslyn Savings Bank and subsidiaries (the
Bank), Roslyn, New York, as part of the Bank's conversion from the mutual to
stock form of organization (the Conversion).  On January 10, 1997, Roslyn
Bancorp, Inc. issued an aggregate of 43,642,459 shares of its common stock, par
value $0.01 per share (Common Stock), of which 42,371,359 shares were issued in
a subscription offering and 1,271,100 shares were issued to The Roslyn Savings
Foundation (the Foundation), a charitable foundation established by the Bank.
Prior to such date, the Company had no assets, liabilities or operations.  In
connection with the Conversion, the Company raised $410.7 million of net
conversion proceeds, of which $205.3 million was utilized for the acquisition of
100% of the outstanding stock of the Bank.  The Company is a savings and loan
holding company and is subject to regulation by the Office of Thrift Supervision
(OTS) and the Securities and Exchange Commission (SEC). At December 31, 1999,
the Company had consolidated total assets of $7.73 billion, deposits of $4.05
billion and stockholders' equity of $637.7 million. Currently, the Company's
activities consist solely of managing the Bank and investing the portion of net
conversion proceeds retained by the Company.  The Bank is a community-oriented
stock savings bank which was originally chartered by the State of New York in
1875.  The following discussion addresses the operations of the Bank and its
subsidiaries.

     After the close of business on February 16, 1999, T R Financial Corp., a
Delaware company, merged with and into the Company and T R Financial Corp.'s
subsidiary, Roosevelt Savings Bank, a New York State chartered stock savings
bank, merged with and into the Bank (the Merger).  All subsidiaries of Roosevelt
Savings Bank became subsidiaries of the Bank.  The acquisition was accounted for
as a pooling-of-interests, and accordingly, all historical financial information
for the Company has been restated to include T R Financial Corp.'s historical
information for the earliest period presented.  Previously reported balances of
T R Financial Corp. have been reclassified to conform to the Company's
presentation and restated to give effect to the Merger.  When necessary, certain
reclassifications have been made to prior period amounts to conform to the
current period presentation.

     Pursuant to the merger agreement, each share of T R Financial Corp. common
stock was converted into the Company's common stock at a fixed exchange ratio of
2.05. As a result, 17,347,768 shares of T R Financial Corp. common stock were
exchanged for 35,528,785 shares of Roslyn common stock and a total of 1,746,880
T R Financial Stock Options were converted into options to purchase a maximum of
3,581,103 shares of the Company's common stock at an exercise price ranging from
$2.20 to $17.32 depending on the exercise price of the underlying T R Financial
stock option. Additionally under the agreement, five former officers and
directors of T R Financial Corp. have joined the Boards of Directors of the
Company and the Bank.

                                       4
<PAGE>

     In connection with the aforementioned acquisition of T R Financial Corp.,
the Company incurred $89.2 million of merger related costs. The nature of the
merger-related charges for the year ended December 31, 1999 is detailed below
(in thousands).


               Merger-related charges:
               Transactions costs                        $  16,917
               Severance and other compensation costs       39,927
               T R Financial Corp. ESOP termination         24,626
               Other costs to combine operations             7,777
                                                         ---------
                                                         $  89,247
                                                         =========


     At December 31, 1999, $16.0 million of such costs, primarily relating to
the T R Financial Corp. ESOP, remains outstanding.

     In August 1995, the Bank completed its acquisition of certain assets and
liabilities of Residential Mortgage Banking, Inc. (RMBI), including its loan
servicing portfolio, through its wholly owned mortgage banking subsidiary,
Roslyn National Mortgage Corp. (RNMC)(formerly Residential First, Inc. (RFI)).

     The Bank's principal business consists of accepting retail deposits from
the general public in the areas surrounding its branch offices and investing
those deposits, together with funds generated from operations and borrowings,
primarily in one- to four-family residential mortgage loans, commercial real
estate loans, mortgage-backed and mortgage related securities, and various debt
and equity securities.  The Bank also invests in multi-family, construction and
development, home equity, second mortgage, consumer and student loans.  It is
the Bank's strategy to generally sell, on a servicing retained basis, a portion
of longer-term fixed-rate and adjustable-rate one- to four-family loans as a
method of managing its interest rate risk and increasing its loan servicing fee
income.  However, the Bank currently retains for its portfolio investment
certain adjustable-rate one- to four-family loans and fixed-rate one- to four-
family mortgage loans with terms up to 15 years plus loans originated by RNMC
which have interest rates of 8% or more.  The Bank's revenues are derived
principally from the interest income generated by its investment securities,
mortgage, consumer and commercial loans and from gains on loan sales and loan
servicing fees.  The Bank's primary sources of funds are deposits, borrowings,
principal and interest payments on loans and securities, and proceeds from the
sale of loans and securities.

     The Bank's mortgage banking subsidiary, RNMC, conducts mortgage banking
activities consisting of the origination, sale and servicing of one- to four-
family loans secured by properties in the Bank's primary lending area, as well
as through RNMC's mortgage origination offices located in New York, New Jersey,
Alabama, Tennessee, Delaware, Pennsylvania, Virginia and Maryland.  In addition,
RNMC has established wholesale relationships with mortgage brokers along the
eastern United States.  Also, RNMC maintains correspondent relationships with
other lenders from whom RNMC will purchase loans. Currently, all of the Bank's
origination of one- to four-family loans is conducted through RNMC, which
originates loans on behalf of the Bank as well as for various other investors
and financial institutions.

     In addition to RNMC, the Bank maintains various subsidiaries, which were
incorporated in New York, to either (a) maintain ownership of specific real
estate properties the Bank has taken ownership over as a result of foreclosure
or in connection with its lending activities (b) operate as a real estate
investment trust (REIT); or (c) offer annuity, mutual fund and insurance
products.  The Bank previously

                                       5
<PAGE>

offered savings bank life insurance through its Savings Bank Life Insurance
(SBLI) department prior to its dissolution on December 31, 1999. The Company, in
addition to the Bank, maintains various subsidiaries incorporated in New York
and Vermont to either (a) operate as a joint venture partner in a mortgage-
banking company; or (b) offer mortgage-related insurance products.

Market Area and Competition

     The Bank is a community-oriented financial institution offering a variety
of financial services to meet the needs of the communities it serves.  As of
December 31, 1999, the Bank operated 25 full-service banking offices in Kings,
Queens, Nassau and Suffolk Counties in New York.  The Bank's primary deposit
gathering area is currently concentrated around the areas where its full service
banking offices are located in Kings, Queens, Nassau and Suffolk Counties, which
the Bank generally considers to be its primary market area.  The Bank's primary
lending area has also historically been concentrated in the New York City
metropolitan area.  However, with the establishment of RNMC in August 1995, the
Bank's primary lending area with regards to one- to four-family loans was
broadened to include the areas surrounding RNMC's mortgage origination offices.

     The New York City metropolitan area has historically benefited from having
a large number of corporate headquarters and a diversity of financial service
entities.  Additionally, the Counties of Queens, Nassau and Suffolk have
historically benefited from a large developed suburban market, well educated
employment base and a diversity of industrial, service and high technology
businesses.  During the late 1980's and early 1990's, however, due in part to
the effects of a prolonged period of weakness in the national economy, the
decline in the regional economy, layoffs in the financial services industry and
corporate relocations, the New York City metropolitan area experienced reduced
levels of employment. After a prolonged period of decline, which was marked by
layoffs in the financial services and defense industries and corporate
relocations and downsizings, the economy in the greater New York metropolitan
area has performed well during the last several years.  The residential real
estate market in the New York City metropolitan area has been favorably impacted
by the increased demand for housing, low unemployment levels and, for most of
1999, a relatively stable interest rate environment.

     The Bank faces significant competition in its primary market area both in
attracting deposits and in originating loans.  The New York City metropolitan
area is a highly competitive market.  The Bank faces direct competition from a
significant number of financial institutions operating in its market area, many
with a state-wide or regional presence, and, in some cases, a national presence.
This competition arises from commercial banks, savings banks, mortgage banking
companies, mortgage brokers, credit unions and other providers of financial
services, many of which are significantly larger than the Bank and, therefore,
have greater financial and marketing resources than those of the Bank.

Lending Activities

     Loan Portfolio Composition.  The types of loans that the Bank may originate
or purchase are subject to federal and state laws and regulations.  The interest
rates charged by the Bank on loans are affected principally by the demand for
such loans, the supply of money available for lending purposes and the rates
offered by its competitors.  These factors are, in turn, affected by general and
economic conditions, monetary policies of the federal government, including the
Federal Reserve Board, legislative tax policies and governmental budgetary
matters.

     The Bank's loan portfolio consists primarily of first mortgage loans
secured by one- to four-family residences and commercial real estate properties
located in its primary lending areaIncluded first mortgage loans secured by one-
to four-family residences is approximately $178.2 million of purchased loans.

                                       6
<PAGE>

     The following table sets forth the composition of the Bank's loan
portfolio, including loans held-for-sale, in dollar amounts and in percentages
of the respective gross loan portfolios at the dates indicated:

<TABLE>
<CAPTION>
                                                                        At December 31,
                                    ---------------------------------------------------------------------------------------
                                             1999                            1998                             1997
                                    ---------------------           ----------------------            ---------------------
                                                 Percent                           Percent                          Percent
                                                    of                               of                               of
                                     Amount       Total             Amount          Total              Amount        Total
                                    -------      -------            -------       --------             -------      -------
                                                                     (Dollars in thousands)
<S>                               <C>            <C>             <C>              <C>             <C>               <C>
Real estate loans:
 One- to four-family              $2,964,835       76.14 %       $  2,809,995        76.09 %      $   2,313,417       75.66 %
 Multi-family                         89,161        2.29               84,575         2.29               71,525        2.34
 Commercial real estate              489,504       12.57              484,260        13.11              462,087       15.11
 Construction and development        107,781        2.77              101,545         2.75               70,818        2.32
 Home equity and
  second mortgage                    139,191        3.57              114,915         3.11               59,274        1.94
Consumer (1)                          21,947        0.56               16,219         0.44               11,496        0.38
Student                                1,788        0.05                1,734         0.05                3,027        0.10
Automobile lease, net                 79,804        2.05               79,786         2.16               65,887        2.15
                                ------------      ------         -------------      ------         ------------      ------
 Gross loans                       3,894,011      100.00 %          3,693,029       100.00 %          3,057,531      100.00 %
                                                  ======                            ======                           ======

Less:
 Unamortized discounts,
  deferred loan (costs)/
  fees and deferred
  mortgage interest, net             (17,303)                         (12,645)                            1,032
 Allowance for loan losses            40,155                           40,207                            38,946
                                 ------------                      -----------                       -----------
  Total loans, net                 3,871,159                        3,665,467                         3,017,553

Less:
 Loans held-for-sale, net:            61,064                           79,991                            13,987
 One- to four-family                   1,788                            1,734                             3,027
 Student                        ------------                      -----------                       -----------
 Loan receivable held for       $  3,808,307                      $ 3,583,742                       $ 3,000,539
  investment, net               ============                      ===========                       ===========


<CAPTION>

                                                                           At December 31,
                                                      ---------------------------------------------------------
                                                                1996                             1995
                                                      -----------------------          ------------------------
                                                                      Percent                           Percent
                                                                        of                                of
                                                        Amount         Total            Amount           Total
                                                        ------        -------          --------        --------
                                                                         (Dollars in thousands)
<S>                                                     <C>          <C>                 <C>            <C>
Real estate loans:
 One-to four-family                                 $  1,615,377       71.83 %       $  1,303,831        71.09 %
 Multi-family                                             70,900        3.15               60,098         3.28
 Commercial real estate                                  378,978       16.85              340,924        18.59
 Construction and development                             49,805        2.22               46,808         2.55
 Home equity and
  second mortgage                                         33,992        1.51               20,924         1.14
Consumer (1)                                               8,953        0.40               10,162         0.56
Student                                                    4,225        0.19                4,988         0.27
Automobile lease, net                                     86,527        3.85               46,285         2.52
                                                    ------------      ------          -----------       ======
  Gross loans                                          2,248,757      100.00 %          1,834,020       100.00 %
                                                                      ======                            ======
Less:
 Unamortized discounts,
  deferred loan (costs)/
  fees and deferred
  mortgage interest, net                                   6,231                            4,679
 Allowance for loan losses                                37,690                           36,617
                                                     -----------                      -----------
  Total loans, net                                     2,204,836                        1,792,724

Less:
 Loans held-for-sale, net:
 One- to four-family                                      12,558                           15,278
 Student                                                   4,225                            4,902
 Loan receivable held for                           ------------                      -----------
  investment, net                                   $  2,188,053                      $ 1,772,544
                                                    ============                      ============

</TABLE>
---------------------
(1)  Consumer loans originated consist of private banking, personal secured,
personal unsecured, modernization, business, automobile and passbook loans.
Private banking was originated beginning during the year ended December 31,
1997.  The amounts shown prior to December 31, 1997 do not include the
aforementioned loan product.


                                       7
<PAGE>

     Loan Originations.  The Bank's mortgage banking subsidiary, RNMC,
originates loans through its loan personnel at its branch offices and through
referrals from local real estate agents, attorneys and builders.  While the Bank
continues to directly originate all commercial real estate, multi-family,
construction and development, home equity, second mortgage, consumer and student
loans, since early 1999, all one- to four-family loan origination activity has
been conducted through RNMC.  RNMC's commissioned loan officers operate in the
Bank's full-service banking offices as well as through RNMC's mortgage
origination offices.

     All loans originated by the Bank, or by RNMC on behalf of the Bank, are
underwritten pursuant to the Bank's loan underwriting policies and procedures.
The Bank originates both adjustable-rate and fixed-rate one- to four-family
loans, multi-family loans, commercial real estate loans, home equity and second
mortgage loans, construction and development loans, consumer loans and student
loans.  The Bank places emphasis on the origination and retention of one- to
four-family loans and commercial real estate loans to selected real estate
developers operating within the Bank's primary market area.  During 1998 and
1999, the Bank emphasized the sale of one- to four-family loans to the secondary
market.  The Bank's and RNMC's ability to originate loans is dependent upon the
relative customer demand for the type of loan and demand for fixed-rate or
adjustable-rate loans, which is affected by the current and expected future
levels of interest rates.

     During 1999, the Bank did not purchase any residential whole loans from
unaffiliated originators. The Bank discontinued its loan purchase program during
early 1998 since the Bank's mortgage company's loan production reached an
appropriate level to meet the Bank's portfolio needs.  It is not anticipated
that the Company will resume this program in the near future.

     Loan Sales, Servicing and Mortgage Banking Activities.  Prior to the
establishment of RNMC, the Bank's loan sale, purchase and servicing activities
were primarily conducted directly by the Bank. During 1999, all of the Bank's
mortgage banking operations were conducted through RNMC with the exception of
the servicing of one- to four-family loans originated by the Bank prior to the
establishment of RNMC, which are being serviced directly by a third party
provider (Cenlar) on behalf of the Bank.  RNMC was formed in conjunction with
the Bank's August 1995 acquisition of certain assets and liabilities, including
the loan servicing portfolio, of Residential Mortgage Banking, Inc. (RMBI), a
mortgage banking firm then operating in the New York Counties of Nassau,
Suffolk, Queens and Albany and the New Jersey Counties of Morris and Monmouth.
RNMC's activities are directed by its executive officers and overseen by the
Bank.

     RNMC originates one- to four-family loans through commissioned loan
personnel and through referrals from real estate brokers, builders, developers
and other sources.  RNMC also utilizes a network of approved mortgage brokers
and loan correspondents to originate mortgage loans.  As a mortgage banking
company, RNMC originates one- to four-family loans for sale to the Bank, as well
as a variety of other investors, including financial institutions and securities
brokerage firms.  RNMC also originates loans for sale directly to the Federal
National Mortgage Association (FNMA) and the Federal Home Loan Mortgage
Corporation (FHLMC) based upon loan terms and underwriting criteria provided to
RNMC by such agencies.  RNMC delivers loan products to investors in the form of
whole loans and in the form of mortgage-backed securities issued by FNMA and
FHLMC, which it receives in exchange for the sale of whole loans to such
agencies.  RNMC's one- to four-family loan production is not dedicated to the
Bank as RNMC offers a variety of competing loan products to customers pursuant
to loan programs that are pre-approved by other potential loan investors.
Accordingly, the Bank competes with RNMC's other investors for the purchase of
one- to four-family loans and mortgage-backed securities on the basis of rates
and terms.  Based upon an ongoing best execution analysis, RNMC sells loans on a
servicing retained or a servicing released basis. The Bank may revise its policy
as to the types of loans it will originate for investment through RNMC based
upon an analysis of the current and anticipated

                                       8
<PAGE>

market interest rates and other market conditions. It is currently the strategy
of the Bank to retain for its portfolio investment certain adjustable-rate one-
to four-family loans and fixed-rate one- to four-family mortgage loans with
terms of up to 15 years plus loans originated by RNMC which have interest rates
of 8% or more. For the year ended December 31, 1999, RNMC originated $1.39
billion of loans and mortgage-backed securities of which $841.9 million were
purchased by the Bank for its loan and mortgage-backed securities portfolio.
RNMC currently does not offer commercial real estate, multi-family, construction
and development, home equity, second mortgage or consumer loans.

     The primary funding source for the loans originated by RNMC is provided by
the Bank through a $190.0 million revolving line of credit. The borrowings on
the line of credit are immediately paid down by RNMC upon the sale of loans. At
December 31, 1999, $147.1 million of this revolving line of credit was
outstanding. From time to time, RNMC will pledge mortgage loans to secure notes
payable to FNMA under a warehouse line of credit known as the FNMA "As Soon As
Pooled Plus Program." The notes are repaid as the related mortgage loans are
sold or collected. At December 31, 1999 there were no outstanding borrowings
under this line of credit.

     RNMC's mortgage banking revenues generally consist of loan origination
fees, interest income earned on mortgages during the period they are held-for-
sale, less the interest expense incurred to finance the mortgages, gains (or
losses) from the sale of mortgage loans, loan servicing fees and gains (or
losses) from the sale of any loan servicing.

     Between the time RNMC issues loan commitments and the time such loans, or
the securities into which the loans are converted, are sold, RNMC is exposed to
movements in the market price due to changes in market interest rates.  RNMC
attempts to manage this risk by utilizing forward cash sales to FNMA, FHLMC and
other approved investors or agencies and forward sales of mortgage-backed
securities to securities brokers and dealers, other financial institutions and
private investors (such forward sales of loans or mortgage-backed securities are
collectively referred to as "forward sale commitments"). Generally, RNMC
attempts to cover between 75% and 105% of the principal amount of the loans that
it has committed to fund at specified interest rates with forward sale
commitments.  However, the type, amount and delivery date of forward sale
commitments RNMC will enter into is based upon anticipated movements in market
interest rates, bond market conditions and management's estimates as to closing
volumes and the length of the origination or purchase commitments.  Differences
between the volume and timing of actual loan originations and purchases and
management's estimates can expose the Bank and RNMC to losses.  If RNMC is not
able to deliver the mortgage loans or mortgage-backed securities during the
appropriate delivery period called for by the forward sale commitment, RNMC may
be required to pay a non-delivery fee, repurchase the delivery commitments at
current market prices or purchase whole loans at a premium for delivery. While
the aforementioned activity is managed continually, there can be no assurance
that RNMC will be successful in its efforts to eliminate the risk of interest
rate fluctuation between the time of the loans origination or purchase
commitments are issued and the ultimate sale of the loans.

     Currently, the Bank services all of its construction and development,
multi-family, home equity, second mortgage, consumer and student loans, and a
portion of its commercial real estate loans.  The remaining portion of
commercial real estate loans and all one- to four-family loans are serviced by a
third party service provider on behalf of the Bank.  The same third party
service provider services all loans RNMC originates on behalf of the Bank as
well as for all conforming loans sold to other investors.  All newly originated
FHA and VA loans are sold, on a servicing-released basis, as are other selected
loans sold to private institutional investors.  In addition, in connection with
the Bank's acquisition of certain liabilities and assets from RMBI, the Bank
acquired the servicing rights of $623.0 million of loans sold by RMBI.  At
December 31, 1999, RNMC's loan servicing portfolio totaled $1.31 billion,
primarily consisting of conforming fixed-rate loans. Excluding RNMC, the Bank's
loan servicing portfolio totaled $97.3 million as of December 31, 1999 and
primarily consisted of one- to four-family,

                                       9
<PAGE>

commercial real estate and construction and development loans. Loan servicing
includes collecting and remitting loan payments, accounting for principal and
interest, contacting delinquent mortgagors, supervising foreclosures and
property dispositions in the event of unremedied defaults, making certain
insurance and tax payments on behalf of the borrowers and generally
administering the loans. During 1999, RNMC utilized a third party subservicer,
to service all loans. Cenlar receives an annual flat fee per loan and a portion
of the ancillary fee income collected. RNMC and the Bank recognizes servicing
fee income in excess of servicing fees paid to Cenlar, a portion of the
ancillary fee income and retains the use of the escrow balances. During the year
ended December 31, 1999, the Bank, through RNMC, sold without recourse,
approximately $815.9 million of whole loans with loan servicing retained.

                                       10
<PAGE>

     The following table shows the maturity of the Bank's loan portfolio at
December 31, 1999. Loans held-for-sale are included in the within one year
maturity category. The table does not include prepayments or scheduled principal
amortization. Prepayments and scheduled principal amortization on loans totaled
$750.2 million, for the year ended December 31, 1999.


<TABLE>
<CAPTION>
                                                                                    At December 31, 1999
                                                            ---------------------------------------------------------------------
                                                                                       Real Estate Loans
                                                            ---------------------------------------------------------------------
                                                                                                                          Home
                                                               One- to                 Commercial     Construction     Equity and
                                                                Four-       Multi-        Real            and            Second
                                                               Family       Family       Estate       Development       Mortgage
                                                            -----------   --------   ------------   --------------   ------------
                                                                                            (In thousands)
<S>                                                         <C>           <C>         <C>            <C>             <C>
Amounts due:

 Within one year                                             $   1,467     $  2,096     $  11,898       $  47,026      $     402
                                                             ---------     --------     ---------       ---------      ---------

 After one year:

   More than one year to three years                            12,196          294         22,951         58,550          5,172

   More than three years to five
    years                                                       85,580          398         50,142          1,638          8,896

   More than five years to 10 years                            425,429       65,001        285,399            567         61,580

   More than 10 years to 20 years                              893,583       18,179        113,996              -          6,959

   More than 20 years                                        1,546,580        3,193          5,118              -         56,182
                                                            ----------     --------     ----------      ---------      ---------
   Total due after December 31, 2000                         2,963,368       87,065        477,606         60,755        138,789
                                                            ----------     --------     ----------      ---------      ---------

   Total amount due                                         $2,964,835     $ 89,161     $  489,504      $ 107,781      $ 139,191
                                                            ==========     ========     ==========      =========      =========

   Less:
    Unamortized discounts,
      deferred loan (costs)/ fees
      and deferred mortgage
      interest, net
     Allowance for loan losses

      Total loans, net
   Less:
     Loans held-for-sale, net:
     One- to four-family
     Student

     Loan receivable held for
       investment, net

<CAPTION>
                                                                   At December 31, 1999
                                                -------------------------------------------------------
                                                                            Automobile      Total Loans
                                                    Consumer     Student      Leases         Receivable
                                                   -----------   --------   ------------   --------------
                                                                         (In thousands)
<S>                                               <C>            <C>         <C>           <C>
Amounts due:

 Within one year                                  $    1,145    $   1,788      $   3,735      $   69,557
                                                  ----------    ---------      ---------      ----------

 After one year:

   More than one year to three years                   3,907            -         75,098         178,168

   More than three years to five
    years                                              2,814            -            971         150,439

   More than five years to 10 years                    1,080            -              -         839,056

   More than 10 years to 20 years                         31            -              -       1,032,748

   More than 20 years                                 12,970            -              -       1,624,043
                                                  ----------    ---------      ---------      ----------
   Total due after December 31, 2000                  20,802            -         76,069       3,824,454
                                                  ----------    ---------      ---------      ----------

   Total amount due                               $   21,947     $  1,788      $  79,804     $ 3,894,011
                                                  ==========    =========      =========

   Less:
    Unamortized discounts,
      deferred loan (costs)/ fees
      and deferred mortgage
      interest, net                                                                              (17,303)
     Allowance for loan losses                                                                    40,155
                                                                                             -----------
      Total loans, net                                                                         3,871,159
   Less:
     Loans held-for-sale, net:
     One- to four-family                                                                          61,064
     Student                                                                                       1,788
                                                                                             -----------
     Loan receivable held for
       investment, net                                                                       $ 3,808,307
                                                                                             ===========
</TABLE>

                                       11
<PAGE>

     The following table sets forth at December 31, 1999, the dollar amount of
gross loans receivable contractually due after December 31, 2000, and whether
such loans have fixed or adjustable interest rates:

<TABLE>
<CAPTION>
                                                                            Due After December 31, 2000
                                                         ---------------------------------------------------
                                                              Fixed            Adjustable          Total
                                                         --------------      -------------     -------------
                                                                              (In thousands)
<S>                                                      <C>                 <C>               <C>
Real estate loans:

  One- to four-family                                    $    1,781,958      $   1,181,410     $   2,963,368

  Multi-family                                                   59,399             27,666            87,065

  Commercial real estate                                        236,079            241,527           477,606

  Construction and development                                    1,135             59,620            60,755

  Home equity and second mortgage                                39,031             99,758           138,789
                                                         --------------      -------------     -------------
      Total real estate loans                                 2,117,602          1,609,981         3,727,583

Consumer and student loans and automobile
 leases, net (1)                                                 81,306             15,565            96,871
                                                         --------------      -------------     -------------
                                                         $    2,198,908      $   1,625,546     $   3,824,454
                                                         ==============      =============     =============
</TABLE>
______________
(1)  Includes private banking, personal secured, personal unsecured,
     modernization, business, automobile and passbook loans.

     One- to Four-Family Loans.  The Bank, through RNMC, currently offers both
fixed-rate and adjustable-rate mortgage loans secured by one- to four-family
residences with maturities up to 40 years located in the Bank's primary market
area, as well as in the New York, New Jersey, Alabama, Delaware, Tennessee,
Pennsylvania, Virginia and Maryland areas in which RNMC operates mortgage
origination offices.  One- to four-family mortgage loan originations are
generally obtained from RNMC's loan representatives operating in the Bank's
branch offices and RNMC's mortgage origination offices, and through their
contacts with the local real estate industry and through direct consumer
advertising.  In addition, RNMC has established wholesale relationships with
mortgage brokers along the eastern United States.  From time to time the Bank
may purchase residential one- to four-family loans in the secondary market.  All
loans purchased in the secondary market are quality control reviewed for
adherence to the Bank's underwriting standards.

     At December 31, 1999, the Bank's one- to four-family loans totaled $2.96
billion, or 76.14% of gross loans. Of the one- to four-family loans outstanding
at that date, 59.5% were fixed-rate loans and 40.5% were adjustable-rate
mortgage loans. The Bank, through RNMC, offers fixed-rate mortgage loans with
terms of 10, 15, 20 and 30 years. The Bank, through RNMC, currently offers a
number of adjustable-rate mortgage loans with terms of up to 40 years and
interest rates which adjust annually from the outset of the loan or which adjust
annually after a three, five, seven or ten year initial fixed-rate period. The
interest rates for the majority of the Bank's adjustable-rate mortgage loans are
indexed to the one year and five year Constant Maturity Treasury (CMT) Index.
Interest rate adjustments on such loans are limited to a 2% annual adjustment
cap and a maximum adjustment of 6% over the life of the loan. Certain of the
Bank's adjustable-rate mortgage loans can be converted to fixed-rate loans with
interest

                                       12
<PAGE>

rates based upon the then-current market rates plus a varying margin.

     The volume and type of adjustable-rate mortgage loans originated by RNMC on
behalf of the Bank have been affected by such market factors as interest rates,
competition, consumer preferences and the availability of funds.  The
origination of adjustable-rate residential mortgage loans, as opposed to fixed-
rate residential mortgage loans, helps reduce the Bank's exposure to increases
in interest rates. However, adjustable-rate loans generally pose credit risks
not inherent in fixed-rate loans, primarily because as interest rates rise, the
underlying payments of the borrower rise, thereby increasing the potential for
default. Periodic and lifetime caps on interest rate increases help to reduce
the risks associated with adjustable-rate loans but also limit the interest rate
sensitivity thereof.

     One- to four-family residential mortgage loans are generally underwritten
according to FNMA and FHLMC guidelines.  The Bank, through RNMC, generally
originates one- to four-family residential mortgage loans in amounts up to $1
million for loans to be sold to private investors, subject to certain exceptions
to these guidelines which must be approved by either the Chief Executive Officer
or Senior Lending Officer.  In addition, RNMC also originates loans for sale to
third party investors in accordance with their respective underwriting
guidelines.  The Bank generally requires private mortgage insurance to be
obtained for loans in excess of an 80% loan to value ratio.  Mortgage loans
originated by the Bank generally include due-on-sale clauses which provide the
Bank with the contractual right to deem the loan immediately due and payable in
the event the borrower transfers ownership of the property without the Bank's
consent.  Due-on-sale clauses are an important means of adjusting the yields on
the Bank's fixed-rate mortgage loan portfolio and the Bank has generally
exercised its rights under these clauses.

     In an effort to provide financing for low and moderate income home buyers,
RNMC participates in residential mortgage programs and products sponsored by the
State of New York Mortgage Agency (SONYMA) and the New Jersey Mortgage Housing
Finance Agency (NJMHFA).  The SONYMA and NJMHFA mortgage programs provide low
and moderate income households with fixed-rate loans which are generally below
prevailing fixed-rate mortgages and which allow below market down payments.

     Multi-Family Lending.  The Bank originates fixed- and adjustable-rate
multi-family mortgage loans generally secured by 40 to four hundred unit
apartment buildings located in the Bank's primary market area.  At December 31,
1999, the Bank's multi-family loan portfolio was $89.2 million, or 2.29% of
total gross loans.  In reaching its decision on whether to make a multi-family
loan, the Bank considers the qualifications and financial condition of the
borrower, including credit history, profitability and expertise, as well as the
value and condition of the underlying property.  Additional factors considered
by the Bank include: the net operating income of the mortgaged premises before
debt service and depreciation; the debt coverage ratio (the ratio of net
earnings to debt service); and the ratio of loan amount to appraised value.
Pursuant to the Bank's underwriting policies, a multi-family mortgage loan may
be made in an amount up to 75% of the lower of the appraised value or sales
price of the underlying property with amortization periods of up to 30 years.
The Bank's adjustable-rate multi-family loans are originated with rates that are
generally fixed for the first five years with a single adjustment on the fifth
anniversary of the loan based upon the average monthly yield on U.S. Treasury
obligations, adjusted to a constant maturity of five years, plus a margin of
1.50% to 2.50%.  Ten year fixed-rates based on similar spreads are also
available.  The Bank offers multi-family loans with terms of up to 10 years.
The Bank's current policies limit the amount of multi-family loans the Bank may
have to 25% of the aggregate loan portfolio.  The Bank's current policies limit
such loans to $15 million per project and an aggregate of $40 million in loans
outstanding per borrower, although the Bank will make exceptions to this policy
provided full Board approval for the loan is obtained.  In addition, the Bank
generally requires a debt service coverage ratio of a minimum of 120%.  The Bank
also requires an appraisal on the property

                                       13
<PAGE>

conducted by an independent appraiser and title insurance. Additionally, the
Bank requires a market occupancy rate of at least 90% prior to lending for
multi-unit apartment buildings.

     When evaluating the qualifications of the borrower for a multi-family loan,
the Bank considers the financial resources and income level of the borrower, the
borrower's experience in owning or managing similar property and the Bank's
lending experience with the borrower.  The Bank's underwriting policies require
that the borrower be able to demonstrate management skills and the ability to
maintain the property from current rental income.  The Bank's policy requires
borrowers to present evidence of the ability to repay the mortgage and a history
of making mortgage payments on a timely basis.  In making its assessment of the
creditworthiness of the borrower, the Bank generally reviews the financial
statements and credit history of the borrower, as well as other related
documentation.

     Commercial Real Estate Lending.  The Bank originates commercial real estate
loans that are generally secured by properties used for business purposes or a
combination of residential and retail purposes which are located in the Bank's
primary market area.  The Bank's underwriting procedures provide that commercial
real estate loans generally may be made in amounts up to 75% of the lower of the
appraised value or sales value of the property, subject to the Bank's current
loans-to-one-borrower limit, which at December 31, 1999, was $15 million per
project and an aggregate of $40 million in loans outstanding per borrower.  The
Bank will make exceptions to this policy provided full Board approval for the
loan is obtained.  These loans may be made with terms up to 20 years and are
generally offered at interest rates which adjust in accordance with the CMT
Index.  The Bank's underwriting standards and procedures are similar to those
applicable to its multi-family loans, whereby the Bank considers the net
operating income of the property and the borrower's expertise, credit history
and profitability.  The Bank has generally required that the properties securing
commercial real estate loans have debt service coverage ratios of at least 125%.
At December 31, 1999 the Bank's commercial real estate loan portfolio totaled
approximately $489.5 million, or 12.57%, of gross loans.

     Construction and Development Lending.  The Bank originates loans for the
development of commercial and residential property located in its primary market
area.  The Bank will originate loans for the acquisition of commercial and
residential property located in its primary market area only if such acquisition
loan is part of an overall development loan.  Construction and development loans
are offered primarily to experienced local developers operating in the Bank's
primary market area.  The majority of the Bank's construction loans are
originated primarily to finance the construction of one- to four-family, owner-
occupied residential, multi-family and commercial real estate properties located
in the Bank's primary market area.  Such loans are offered for the construction
of properties that are pre-sold or for which permanent financing has been
secured.  At December 31, 1999, the Bank had $99.7 million of construction loan
commitments for the construction of one- to four-family properties.
Construction loans are generally offered with terms up to three years for
residential property and up to two years for multi-family and commercial
property.  Construction loans may be made in amounts up to 90% of the estimated
cost of construction.  With respect to construction loans, the Bank's policy is
to require borrowers to secure permanent financing commitments from generally
recognized lenders for an amount equal to or greater than the amount of the
loan.  In some cases, the Bank may itself provide permanent financing.  Loan
proceeds are disbursed generally on a monthly basis in increments as
construction progresses and as inspections by the Bank's supervising engineer
warrant.

     Construction and development financing is generally considered to involve a
higher degree of credit risk than long-term financing on improved, owner-
occupied real estate and therefore, the personal guarantee of the borrower
during the construction stage is required.  Risk of loss on a construction loan
is

                                       14
<PAGE>

dependent largely upon the accuracy of the initial estimate of the property's
value at completion of construction compared to the estimated cost (including
interest) of construction and other assumptions, including the estimated time to
sell residential properties.  If the estimate of value proves to be inaccurate,
the Bank may be confronted with a project, when completed, having a value which
is insufficient to assure full repayment.

     Home Equity and Second Mortgage Lending.  The Bank offers fixed-rate, fixed
term home equity loans and adjustable rate home equity lines-of-credit in its
primary market area.  Standard fixed rate, fixed term home equity loans are
offered in amounts of up to 80% of the appraised value of the property
(including the first mortgage) with a maximum loan amount of $100,000.  Standard
adjustable rate home equity lines-of-credit are offered in either, (a) amounts
up to 80% of the appraised value of the property (including the first mortgage)
with a maximum line amount of $100,000, or, (b) amounts up to 70% of the
appraised value of the property (including the first mortgage) on lines greater
than $100,000, to a maximum line of $250,000.

     The Bank also offers home equity loans and lines-of-credit for individuals
whose loan-to-value ratios or expense ratios exceed that used for the standard
product.  The alternative loan-to-value product offers loans or lines-of-credit
up to 90% of the property value (including the first mortgage) to a maximum of
$100,000.  The alternative income product offers loans or line-of-credit up to a
maximum of 65% of the property value (including the first mortgage) up to a
maximum of $100,000.  The alternative loan products carry an interest rate
greater than that offered on the standard products.

     Consumer and Student Lending.  The Bank's portfolio of consumer and student
loans primarily consists of private banking, secured and unsecured personal
loans, automobile and home improvement loans.  Private banking entails offering
a wide array of deposit and loan products that are customized to meet the needs
of a specific client base, principally composed of entrepreneurs, professionals
and senior corporate executives.  Private banking can be either fixed or
adjustable rate, secured or unsecured and typically have a maturity of one year
or less, or are payable on demand.  Unsecured personal loans are offered with a
maximum term of five years and maximum amount of $15,000.  Secured personal
loans are collateralized with deposits from any federally insured financial
institution.  Secured personal loans have a maximum term of five years and a
maximum amount of $50,000.  Home improvement loans are offered to homeowners for
the purpose of modernization and maintenance of owner-occupied properties for
terms up to five years and to a maximum loan amount of $20,000.  At December 31,
1999, there were $79.8 million automobile leases outstanding, or 2.05%, of gross
loans.  The Bank has originated, or purchased leases originated by an unrelated
third party, which were secured by automobiles.  As of July 30, 1999, the Bank
terminated its agreement with the third party provider and no longer originates
or purchases leases.  The Bank offers both subsidized and unsubsidized student
loans through a forward purchasing and servicing agreement with the Student Loan
Marketing Association (Sallie Mae).  The Bank also offers automobile loans up to
five years and $50,000 for a new automobile and four years for a used
automobile, depending on the vehicle year, and limited to a maximum amount of
$25,000. Cash cushion (checking overdraft protection) is offered up to $5,000.
The Bank also offers Master Card(R)(TM) and Visa(R)(TM) credit cards through an
affinity relationship with MBMA American, who assumes underwriting
responsibility and credit risk.

     Loan Approval Procedures and Authority.  The Board of Directors establishes
the lending policies and loan approval limits of the Bank.  The Board of
Directors has established an Executive Committee, comprised of rotating members
of the Board of Directors, to review and approve loans in amounts greater than
management's approval limits.  The Board of Directors has authorized the

                                       15
<PAGE>

following persons to approve loans up to the amounts indicated:  (a) commercial
real estate loans of up to $1.0 million can be approved by the Chairman,
President or Senior Commercial Lending Officer plus one additional officer in
the Lending Division; (b) all commercial real estate loans, multi-family loans,
construction loans and loan participations in excess of $1.0 million require the
approval of the Executive Committee of the Board of Directors; when these loans
exceed $5.0 million, they require the approval of the Board of Directors. Home
equity loans, lines of credit, personal loans, and home improvement loans are
approved by a Consumer Loan Officer up to a defined maximum amount established
by the Board of Directors. Loan amounts greater than the defined maximum amount
must be countersigned by the Senior Consumer Lending Officer.  Residential loan
approval authority limits have been established by RNMC's management and
approved by its Board of Directors.  These limits require approval by senior
personnel for loans that carry greater risks based upon underwriting criteria.

     With respect to all loans originated by RNMC on behalf of the Bank, upon
receipt of a completed loan application from a prospective borrower, a credit
report is ordered and certain other information is verified by an independent
credit agency.  If necessary, additional financial information may be required.
An appraisal of real estate intended to secure a proposed loan generally is
required to be performed by appraisers approved by the Bank.  For proposed
mortgage loans, the Board of Directors annually approves the independent
appraisers used by the Bank and approves the Bank's appraisal policy.  The
Bank's policy is to obtain title and hazard insurance on all mortgage loans and
the Bank may require borrowers to make payments to a mortgage escrow account for
the payment of property taxes.  Any exceptions to the Bank's underwriting
policies must be noted on an underwriting standards checklist and approved by
the Executive Committee for loans of up to $5.0 million and by the Board of
Directors for loans of $5.0 million or more.  The Bank subjects all loan
commitments for non-residential mortgage loans to an environmental site
assessment.

Delinquent Loans, Real Estate Owned and Classified Assets

     Management and the Board of Directors perform a monthly review of all
delinquent loans.  The procedures taken by the Bank with respect to
delinquencies vary depending on the nature of the loan and period of
delinquency.  The Bank generally requires that delinquent mortgage loans be
reviewed, that a delinquency notice be mailed no later than the sixteenth day of
delinquency and a late charge assessed after 15 days.  The Bank's subservicer,
Cenlar, follows similar delinquency procedures.  The Bank's policies provide
that telephone contact will be attempted to ascertain the reasons for
delinquency and the prospects of repayment.  When contact is made with the
borrower at any time prior to foreclosure, the Bank will attempt to obtain full
payment or work out a repayment schedule with the borrower to avoid foreclosure.
It is the Bank's general policy to discontinue accruing interest on all loans
which are past due 90 days or when, in the opinion of management, such
suspension is warranted.  Property acquired by the Bank as a result of
foreclosure on a mortgage loan is classified as real estate owned (REO) and is
recorded at the lower of the unpaid principal balance or fair value less
estimated costs to sell at the date of acquisition and thereafter.  Upon
foreclosure, it is the Bank's policy to generally require an appraisal of the
property and, thereafter, appraise the property on an as-needed basis.

     At December 31, 1999, there was no Bank owned real estate that was held
directly by the Bank and its subsidiaries which were formed for the purpose of
holding and maintaining certain REO. See "Subsidiary Activities." Bank personnel
or an independent inspector generally conducts periodic external inspections on
all properties securing loans in foreclosure and generally conducts external
appraisals on all properties prior to taking ownership of the property. Based
upon such inspections and appraisals, the Bank will charge-off any loan
principal it deems uncollectible at such

                                       16
<PAGE>

time. Bank personnel conduct monthly reviews of its foreclosed real estate and
periodically adjust its valuation allowance for declines in the value of REO.


     The Bank's policies permit the financing of the sale of its foreclosed real
estate on substantially the same terms applicable to its other real estate
mortgage loans with the exception that the Bank may loan up to 80% of the lesser
of the appraised value or sales price of the foreclosed property.

     Federal regulations and the Bank's Classification of Assets Policy require
that the Bank utilize an internal asset classification system as a means of
reporting problem and potential problem assets.  The Bank currently classifies
problem and potential problem assets as "Substandard," "Doubtful" or "Loss"
assets.  An asset is considered Substandard if it is inadequately protected by
the current net worth and paying capacity of the obligor or of the collateral
pledged, if any.  Substandard assets include those characterized by the distinct
possibility that the insured institution will sustain "some loss" if the
deficiencies are not corrected.  Assets classified as Doubtful have all of the
weaknesses inherent in those classified Substandard with the added
characteristic that the weaknesses present make collection or liquidation in
full, on the basis of currently existing facts, conditions and values, highly
questionable and improbable.  Assets classified as Loss are those considered
uncollectible and of such little value that their continuance as assets without
the establishment of a specific loss reserve is not warranted.  Assets which do
not currently expose the insured institution to sufficient risk to warrant
classification in one of the aforementioned categories, but possess weaknesses
are designated as "Special Mention."

     When an insured institution classifies one or more assets, or portions
thereof, as Substandard or Doubtful, it is required to establish a general
valuation allowance for loan losses in an amount deemed prudent by management
unless the loss of principal appears to be remote.  General valuation allowances
represent loss allowances which have been established to recognize the inherent
risk associated with lending activities, but which, unlike specific allowances,
have not been allocated to particular problem assets.  When an insured
institution classifies one or more assets, or portions thereof, as Loss, it is
required either to establish a specific allowance for losses equal to 100% of
the amount of the assets so classified or to charge-off such amount.

     A savings institution's determination as to the classification of its
assets and the amount of its valuation allowances is subject to review by the
FDIC and NYSBD, either of which can order the establishment of additional
general or specific loss allowances.  The FDIC, in conjunction with the other
federal banking agencies, has adopted an inter-agency policy statement on the
allowance for loan and lease losses. The policy statement provides guidance for
financial institutions on both the responsibilities of management for the
assessment and establishment of adequate allowances and guidance for banking
agency examiners to use in determining the adequacy of general valuation
guidelines.  Generally, the policy statement recommends that institutions have
effective systems and controls to identify, monitor and address asset quality
problems; that management has analyzed all significant factors that affect the
collectibility of the portfolio in a reasonable manner; and that management has
established acceptable allowance evaluation processes that meet the objectives
set forth in the policy statement.   While the Bank believes that it has
established an adequate allowance for loan losses, there can be no assurance
that regulators, in reviewing the Bank's loan portfolio, will not request the
Bank to materially increase its allowance for loan losses, thereby negatively
affecting the Bank's financial condition and earnings at that time.  Although
management believes that adequate specific and general loan loss allowances have
been established, actual losses are dependent upon future events and, as such,
further additions to the level of specific and general loan loss allowances may
become necessary.

                                       17
<PAGE>

     The Bank's senior management reviews and classifies the Bank's loans on a
monthly basis and reports the results of its reviews to the Board of Directors.
At December 31, 1999, the Bank had $31.2 million of loans designated as
Substandard, consisting of 21 commercial real estate and 183 one- to four-family
loans, and no loans classified as Doubtful or Loss.  At December 31, 1999, the
Bank had $14.3 million of assets designated as Special Mention, consisting of 28
commercial real estate and one- to four-family loans, which were designated due
to past loan delinquencies.

                                       18
<PAGE>

     Non-Accrual and Past-Due Loans.  The following table sets forth information
regarding non-accrual loans and REO:

<TABLE>
<CAPTION>
                                                                      At December 31,
                                                --------------------------------------------------------
                                                  1999        1998        1997        1996        1995
                                                --------    --------    --------    --------    --------
                                                                (Dollars in thousands)
<S>                                             <C>         <C>         <C>         <C>         <C>
Non-accrual loans (1):
 One- to four-family                            $ 16,354    $ 15,662    $  9,029    $  9,846    $ 11,798
 Commercial real estate                            2,434       2,775       9,564      10,256      16,884
 Construction and development                          -           -           -         602         150
 Home equity                                          79         120         116          50          78
 Consumer (2)                                         96          96         221         106          86
                                                --------    --------    --------    --------    --------
  Total non-accrual loans                         18,963      18,653      18,930      20,860      28,996
Loans contractually past due 90 days or
  more, other than non-accruing                        -       3,421       1,295         509       1,879
                                                --------    --------    --------    --------    --------
  Total non-performing loans                      18,963      22,074      20,225      21,369      30,875
Real estate owned, net (3)                             -       1,176       1,197       4,962      12,594
                                                --------    --------    --------    --------    --------
  Total non-performing assets                   $ 18,963    $ 23,250    $ 21,422    $ 26,331    $ 43,469
                                                ========    ========    ========    ========    ========
Allowance for loan losses as a percent of
 total loans (4)                                    1.04%       1.11%       1.28%       1.69%       2.02%
Allowance for loan losses as a percent of
 total non-performing loans (4)(5)                211.75%     182.15%     192.56%     176.38%     118.60%
Non-performing loans as a percent of total
  loans (4)(5)                                      0.49%       0.61%       0.67%       0.96%       1.71%
Non-performing assets as a percent of total
  assets (6)(7)                                     0.25%       0.30%       0.29%       0.38%       0.97%
</TABLE>

(1) Includes restructured loans which are less than 90 days past due but which
    have not yet complied with the terms of their restructuring agreement for a
    satisfactory period of time.
(2) Includes private banking, personal secured, personal unsecured,
    modernization, business, automobile and passbook loans.  Private banking
    loans were originated beginning during the year ended December 31, 1997.
    The amounts shown prior to December 31, 1997 do not include the
    aforementioned loan product.
(3) REO balances are shown net of related loss allowances.
(4) Loans include loans receivable held for investment, net, excluding the
    allowance for loan losses which at December 31, 1999, 1998, 1997, 1996 and
    1995 was $40.2 million, $40.2 million, $38.9 million, $37.7 million and
    $36.6 million, respectively.
(5) Non-performing loans consist of non-accruing loans and all loans 90 days or
    more past due and other loans which have been identified by the Bank as
    presenting uncertainty with respect to the collectibility of interest or
    principal.
(6) Non-performing assets consist of non-performing loans and REO.
(7) Total assets at December 31, 1996 includes $1.36 billion of proceeds held in
    escrow by the Bank on behalf of depositors and other individuals who
    submitted funds in anticipation of the Bank's conversion to stock form and
    the concurrent issuance of Roslyn Bancorp, Inc. common stock.


     The principal balance of non-accrual loans approximated $19.0 million,
$18.7 million and $18.9 million at December 31, 1999, 1998 and 1997,
respectively. Interest income that would have been recorded if the loans had
been performing in accordance with their original terms aggregated approximately
$2.5 million, $1.5 million and $1.8 million during the years ended December 31,
1999, 1998 and 1997. Actual interest income recorded on loans previously on non-
accrual was $410,000, $1.6 million and $757,000 for the years ended December 31,
1999, 1998 and 1997, respectively.

                                       19
<PAGE>

     The principal balance of restructured loans that have not complied with the
terms of their restructuring agreement for a satisfactory period of time
was $1.2 million, $909,000 and $280,000 at December 31, 1999, 1998 and 1997,
respectively. Interest income that would have been recorded if the loans had
been performing in accordance with their original terms aggregated approximately
$107,000, $76,000 and $30,000 during the years ended December 31, 1999, 1998 and
1997, respectively. Interest income recorded for restructured loans amounted to
$671,000, $433,000 and $235,000 for the years ended December 31, 1999, 1998 and
1997, respectively. Additionally, restructured loans totaling $7.6 million, $4.1
million and $1.4 million have complied with the terms of the restructuring
agreement for a satisfactory period and were returned to the performing loan
portfolio during the years ended December 31, 1999, 1998 and 1997, respectively.

Allowance for Loan Losses

     The Company's formalized process for assessing the adequacy of the
allowance for loan losses, and the resultant need, if any, for periodic
provisions to the allowance charged to income, entails both individual loan
analyses and loan pool analyses. The individual loan analyses are periodically
performed on individually significant loans or when otherwise deemed necessary,
and primarily encompasses multi-family, commercial real estate and construction
and development loans. The result of these individual analyses is the allocation
of the overall allowance to specific allowances for individual loans, both loans
considered impaired and non-impaired.

     The loan pool analyses are performed on the balance of the portfolio,
primarily the one- to-four family residential and consumer loans.  The pools
consist of aggregations of homogeneous loans having similar credit risk
characteristics.  Examples of pools defined by the Company for this purpose are
Company-originated, fixed-rate residential loans; Company-originated,
adjustable-rate residential loans; purchased, fixed-rate residential loans;
outside-serviced residential loans; residential second mortgage loans;
participation in conventional first mortgages; residential construction loans;
commercial construction loans, etc.  For each such defined pool, there is a set
of sub-pools based upon delinquency status:  current, 30-59 days, 60-89 days,
90-119 days and 120+ days (the latter three sub-pools are considered to be
"classified" by the Company).  For each sub-pool, the Company has developed a
range of allowance necessary to adequately provide for probable losses inherent
in that pool of loans.  These ranges are based upon a number of factors
including the risk characteristics of the pool, actual loss and migration
experience, expected loss and migration experience considering current economic
conditions, industry norms, and the relative seasoning of the pool.  The ranges
of allowance developed by the Company are applied to the outstanding principal
balance of the loans in each sub-pool; as a result, further specific and general
allocations of the overall allowance are made (the allocations for the
classified sub-pools are considered specific and the allocations for the non-
classified sub-pools are considered general).

     The Company's overall allowance also contains an unallocated amount which
is supplemental to the results of the aforementioned process and takes into
consideration known and expected trends that are likely to affect the
creditworthiness of the loan portfolio as a whole, national and local economic
conditions, unemployment conditions in the local lending area and the timeliness
of court foreclosure proceedings in the Company's local and other lending areas.

     During the period from 1997 to 1999, the Company's loan portfolio has
remained relatively stable. During that time period, the Bank has seen a slight
decrease in the amount of non-performing loans. At December 31, 1999, 1998 and
1997, 76.14%, 76.09% and 75.66%, respectively, of the gross

                                       20
<PAGE>

loan portfolio was in one-to four-family loans, which are considered low risk
loans. Non-performing loans at those dates were $19.0 million, $22.1 million and
$20.2 million, respectively, however, the composition of those loans has changed
since 1997, and is currently primarily comprised of one- to four-family loans in
1999.

     The allowance for loan losses has remained relatively consistent over the
aforementioned periods as the composition of the loan portfolio has remained
stable and the general economic and other factors have improved over that
period. The allowance as a percent of total loans was 1.04%, 1.11% and 1.28%,
as of December 31, 1999, 1998 and 1997, respectively.  The allowance for loan
losses totaled $40.2 million, $40.2 million and $38.9 million at December 31,
1999, 1998 and 1997, respectively.

     The quantitative information cited in the previous paragraphs indicates a
trend over this time horizon of (a) an increase in absolute dollars in the
relatively less risky one- to four-family residential first mortgage loans;
(b) an increase in absolute dollars, and a slight decrease in relative dollars,
in the relatively riskier loans (multi-family, commercial real estate,
construction and development, and home equity and second mortgage loans), and;
(c) a decrease in absolute dollars in non-performing loans. The application of
the Company's formalized process for assessing the adequacy of the allowance for
loan losses to the loan portfolio undergoing the changes cited during this time
horizon has resulted in a relatively flat absolute dollar level of the allowance
for loan losses and a slight decrease in the ratio of the allowance for loan
losses to total loans. Management continues to believe the Company's reported
allowance for loan losses is both appropriate in the circumstances and adequate
to provide for estimated probable losses inherent in the loan portfolio.

     As of December 31, 1999, the Bank's allowance for loan losses was $40.2
million, or 1.04% of total loans and 211.75% of non-performing loans, as
compared to $40.2 million, or 1.11% of total loans and 182.15% of non-performing
loans, as of December 31, 1998.  The Bank had total non-performing loans of
$19.0 million and $22.1 million at December 31, 1999 and 1998, respectively, and
non-performing loans to total loans of 0.49% and 0.61%, respectively.  The Bank
will continue to monitor and modify its allowance for loan losses as conditions
dictate. Management believes that, based on information currently available, the
Bank's allowance for loan losses is sufficient to cover losses inherent in its
loan portfolio.  At this time, no assurance can be given that the Bank's level
of allowance for loan losses will be sufficient to cover future loan losses
incurred by the Bank or that future adjustments to the allowance for loan losses
will not be necessary if economic and other conditions differ substantially from
the economic and other conditions used by management to determine the current
level of the allowance for loan losses.  Management may in the future increase
its level of loan loss allowance as a percentage of total loans and non-
performing loans in the event it increases the level of multi-family, commercial
real estate, construction and development or other lending as a percentage of
its total loan portfolio.  In addition, the FDIC and NYSBD as an integral part
of their examination process periodically review the Bank's allowance for loan
losses.  Such agencies may require the Bank to make additional provisions for
estimated loan losses based upon judgments that may differ from those of
management.

                                       21
<PAGE>

     The following table sets forth activity in the Bank's allowance for loan
losses for the periods indicated:

<TABLE>
<CAPTION>
                                                           For the Year Ended December 31,
                                             --------------------------------------------------------
                                                1999        1998        1997        1996        1995
                                             --------    --------    --------    --------    --------
                                                                   (In thousands)
<S>                                         <C>         <C>         <C>         <C>         <C>
Balance at beginning of year                 $ 40,207    $ 38,946    $ 37,690    $ 36,617    $ 37,172
                                             --------    --------    --------    --------    --------
Provision for loan losses                           -       1,500       1,400       3,400       3,650
Charge-offs:
  Real estate loans:
  One- to four-family                              25         187         189         410         811
  Commercial real estate                            -         387         327       1,646       4,480
  Construction and development                      -           -           -         519         111
  Consumer, student loans and other               170         128         167          90         127
                                             --------    --------    --------    --------    --------
     Total charge-offs                            195         702         683       2,665       5,529
                                             --------    --------    --------    --------    --------

Recoveries:
  Real estate loans:
  One- to four-family                              96          55         202           5         438
  Commercial real estate                            5         330         272         197         822
  Construction and development                      -           -           -          94           1
  Consumer, student loans and other                42          78          65          42          63
                                             --------    --------    --------    --------    --------
     Total recoveries                             143         463         539         338       1,324
                                             --------    --------    --------    --------    --------
Net charge-offs                                   (52)       (239)       (144)     (2,327)     (4,205)
                                             --------    --------    --------    --------    --------
Balance at end of year                       $ 40,155    $ 40,207    $ 38,946    $ 37,690    $ 36,617
                                             ========    ========    ========    ========    ========

Ratio of net charge-offs
  during the year to average loans
  outstanding during the year                    .001%       0.01%       0.01%       0.12%       0.26%
</TABLE>

                                       22
<PAGE>

     The following tables set forth the Bank's percent of allowance for loan
losses to total allowance and the percent of loans to total loans (including
loans held-for-sale) in each of the categories listed at the dates indicated:


<TABLE>
<CAPTION>
                                                                                           At December 31,
                                                  --------------------------------------------------------------------------------
                                                                      1999                                         1998
                                                  -------------------------------------------  -----------------------------------
                                                                                Percent of                               Percent of
                                                              Percent of         Loans in                   Percent of    Loans in
                                                               Allowance           Each                      Allowance      Each
                                                               To Total        Category to                  To Total    Category to
                                                    Amount     Allowance       Total Loans       Amount     Allowance   Total Loans
                                                   -------   ------------    ----------------   -------   -----------  -------------
                                                                                  (Dollars in thousands)
<S>                                              <C>          <C>            <C>               <C>          <C>         <C>
One- to four-family                               $ 16,144         40.20%       76.14%        $  17,823      44.34%      76.09%
Multi-family                                         1,444          3.60         2.29             1,662       4.13        2.29
Commercial real estate                               7,054         17.57        12.57            11,223      27.91       13.11
Construction and development                         6,875         17.12         2.77             5,984      14.88        2.75
Home equity/second mortgage                            486          1.21         3.57               794       1.97        3.11
Consumer and student                                 1,168          2.91         2.66               804       2.00        2.65
Unallocated                                          6,984         17.39            -             1,917       4.77           -
                                                  --------        ------       ------         ---------     ------      ------
  Total allowance for loan losses                 $ 40,155        100.00%      100.00%        $  40,207     100.00%     100.00%
                                                  ========        ======       ======         =========     ======      ======
</TABLE>



<TABLE>
<CAPTION>
                                                                             At December 31,
                                   -----------------------------------------------------------------------------------------
                                                       1997                                               1996
                                   ------------------------------------------     ------------------------------------------
                                               Percent of       Percent of                    Percent of        Percent of
                                                Allowance        Loans in                      Allowance        Loans in
                                                To Total       Each Category                   To Total       Each Category
                                     Amount     Allowance     to Total Loans       Amount     Allowance      to Total Loans
                                    -------   ------------   ---------------       -------   -----------    ----------------
                                                                          (Dollars in thousands)
<S>                                 <C>        <C>            <C>                  <C>       <C>            <C>
One- to four-family                 $16,501      42.37%        75.66%              $ 9,749       25.86%          71.83%
Multi-family                          1,945       5.00          2.34                 3,119        8.27            3.15
Commercial real estate               12,339      31.68         15.11                13,908       36.90           16.85
Construction and development          3,770       9.68          2.32                 4,726       12.54            2.22
Home equity/second mortgage             375       0.96          1.94                   157        0.42            1.51
Consumer and student                    523       1.34          2.63                   471        1.26            4.44
Unallocated                           3,493       8.97             -                 5,560       14.75               -
                                  ---------     ------        ------                ------      ------          ------
 Total allowance for loan losses  $  38,946      100.0%       100.00%              $37,690      100.00%         100.00%
                                  =========     ======        ======               =======      ======          ======

<CAPTION>

                                                         At December 31,
                                            ------------------------------------------
                                                              1995
                                            ------------------------------------------
                                                        Percent of       Percent of
                                                         Allowance        Loans in
                                                         To Total       Each Category
                                              Amount     Allowance      to Total Loans
                                             -------   ------------    ---------------
                                                     (Dollars in thousands)
<S>                                           <C>        <C>            <C>
One- to four-family                         $   5,678         15.51%          71.09%
Multi-family                                    3,036          8.29            3.28
Commercial real estate                         16,396         44.78           18.59
Construction and development                    3,872         10.57            2.55
Home equity/second mortgage                       162          0.44            1.14
Consumer and student                              461          1.26            3.35
Unallocated                                     7,012         19.15               -
                                            ---------        ------          ------
 Total allowance for loan losses            $  36,617        100.00%         100.00%
                                            =========        ======          ======
</TABLE>

                                       23
<PAGE>

Environmental Issues

     The Bank encounters certain environmental risks in its lending activities.
Under federal and state environmental laws, lenders may become liable for costs
of cleaning up hazardous materials found on property securing their loans.  In
addition, the existence of hazardous materials may make it unattractive for a
lender to foreclose on such properties.  Although environmental risks are
usually associated with loans secured by commercial real estate, risks also may
be substantial for loans secured by residential real estate if environmental
contamination makes security property unsuitable for use.  This could also have
a negative effect on nearby property values.  The Bank attempts to control its
risk by requiring that a phase one environmental assessment be completed as part
of its underwriting review for all non-residential mortgage applications.  In
addition, the Bank's policy is to maintain ownership of specific real estate
properties acquired by the Bank as a result of foreclosure in separately
incorporated subsidiaries.

Securities Investment Activities

     The Board of Directors sets the securities investment policy of the Bank.
This policy dictates that investment decisions will be made based on the safety
of the investment, liquidity requirements of the Bank and potential return on
the investments.  In pursuing these objectives, the Bank considers the ability
of an investment to provide earnings consistent with factors of quality,
maturity, marketability and risk diversification.  The Board of Directors has
established an Investment Committee comprised of five Directors and the
Investment Officer to supervise the Bank's securities investment program.  The
Bank's Investment Committee meets periodically and evaluates all investment
activities for safety and soundness, evaluates the investment policy and its
objectives for the next period and submits a report to the Board of Directors.
The Bank's Investment Officer is responsible for making securities investment
portfolio decisions in accordance with the Bank's policies.  While the
Investment Officer has the authority to conduct trades within specific
guidelines established by the Bank's investment policy, all transactions are
periodically reviewed by the Investment Committee and reported to the Board of
Directors on a monthly basis.

     At December 31, 1999, the Bank's current policies generally limit
securities investments to U.S. Government and agency securities, municipal
bonds, corporate debt obligations and corporate equities.  In addition, the
Bank's policies permit investments in mortgage-backed and mortgage related
securities, including securities issued and guaranteed by FNMA, FHLMC,
Government National Mortgage Association (GNMA) and privately-issued
Collateralized Mortgage Obligations (CMOs).  The Bank's current securities
investment strategy is to de-emphasize its investment in U.S. Government
obligations, corporate debt and municipal bonds and to emphasize the purchase of
mortgage-backed and mortgage related securities, preferred stock and trust
preferreds issued by corporate issuers in order to increase its overall
investment securities yield while remaining in short- and medium-term
investments for purposes of interest rate risk management.

     At December 31, 1999, the Company had $3.53 billion in securities,
consisting primarily of U.S. Government and agency obligations, mortgage-backed
and mortgage related securities, municipal and corporate obligations, trust
preferreds, and preferred and common stocks, as compared with $3.87 billion at
December 31, 1998.  Statement of Financial Accounting Standards (SFAS) No. 115,
"Accounting for Certain Investments in Debt and Equity Securities" requires the
Company to designate its securities as held-to-maturity, available-for-sale or
trading depending on the Company's intent regarding its investments.  Upon the
purchase of an investment security, the Bank and the Holding Company (Roslyn

                                       24
<PAGE>

Bancorp, Inc. on an unconsolidated basis) will make a determination as to the
classification of the security.  However, the Bank and the Holding Company
currently do not purchase securities with the intention of trading such
securities, nor does the Bank or the Holding Company maintain trading
portfolios.  As of December 31, 1999, $3.53 billion of the Company's securities
portfolio, or 45.7% of total assets, was classified as available-for-sale, with
an average life of the portfolio of 7.74 years.  During 1999, in connection with
the merger with T R Financial, the Company transferred all held-to-maturity
securities to available-for-sale.  For the year ended December 31, 1999, the
Company designated all newly-purchased securities as available-for-sale.

     Mortgage-Backed and Mortgage Related Securities.  The Bank purchases
mortgage-backed and mortgage related securities in order to: (a) generate
positive interest rate spreads with minimal administrative expense; (b) lower
its credit risk as a result of the guarantees provided by FHLMC, FNMA, and GNMA;
(c) utilize these securities as collateral for borrowings; and (iv) increase the
liquidity of the Bank.  The Bank has primarily invested in mortgage-backed and
mortgage related securities issued or sponsored by private issuers, GNMA and
FHLMC.  The Bank also invests in CMOs issued or sponsored by FNMA, FHLMC, as
well as private issuers.  At December 31, 1999, mortgage-backed and mortgage
related securities totaled $2.80 billion, or 36.3% of total assets, and 37.5% of
total interest-earning assets, of which all was classified as available-for-
sale.  At December 31, 1999, 8.5% of the mortgage-backed and mortgage related
securities were adjustable-rate and 91.5% were fixed-rate.  The mortgage-backed
and mortgage related securities portfolio had coupon rates ranging from 5.4% to
12.5% and had a weighted average yield of 6.58% at December 31, 1999.

     At December 31, 1999, the Bank's CMO portfolio totaled $1.59 billion, or
20.6% of total assets and 21.2% of total interest-earning assets, consisting
of $513.9 million of CMOs issued by private issuers such as GE Capital Mortgage
Services, Inc., Prudential Home Mortgage Securities, Inc., Residential Funding
Mortgage Securities, Inc. and Citicorp Mortgage Securities, Inc., and $1.08
billion issued by government sponsored agencies such as GNMA, FNMA and FHLMC.
It is the policy of the Bank to limit its privately issued CMOs to non-high risk
securities rated "AAA" by two rating agencies with an average life of seven
years or less.  The Bank also limits the amount of such investments to $25
million per transaction, 10% of the issuer's outstanding CMOs and 35% of the
Bank's assets.  For government sponsored CMOs, the Bank's policy limits such
investments to non-high risk securities that have an average life of ten years
or less.  The Bank also limits the amount of such investments to $50 million per
transaction.  The Bank monitors the credit rating of its CMOs on a regular
basis.  The current securities investment policy of the Bank prohibits the
purchase of higher risk CMOs, which are defined as those securities exhibiting
significantly greater volatility of estimated average life and price relative to
interest rates than do standard 30-year fixed-rate securities.  At December 31,
1999, $1.59 billion, or 100%, of which was classified as available-for-sale.  At
such date, the Bank's CMO portfolio had an average estimated life of 6.98 years
and a weighted average yield of 6.63%.

     Debt Securities.  At December 31, 1999 the Bank's debt securities portfolio
total $340.7 million, or 4.4%, of total assets.  The Bank's investment in debt
securities generally consists of investments in U.S. Treasury securities and
debt securities issued by government sponsored agencies such as FNMA, GNMA and
FHLMC.  To a lesser extent, the Bank invests in debt securities and commercial
paper issued by industrial and financial companies and obligations of
municipalities and public utilities.

     U.S. Government and Agency Obligations.  At December 31, 1999, the Bank's
U.S. Government securities portfolio totaled $67.9 million, all of which was
classified as available-for-sale.  Such portfolio primarily consists of short-
to medium-term (maturities of one to five years) securities.  The Bank's

                                       25
<PAGE>

current investment practice, however, is to de-emphasize its investments in such
instruments. At December 31, 1999, the Bank's agency securities portfolio
totaled $267.9 million, all of which was classified as available-for-sale and
consisted of callable debentures. The Bank's callable agency debentures
generally are callable at par after one year and in six month intervals
thereafter. The current policy of the Bank limits the purchase of agency debt
obligations to a maturity of 30 years or less and limits such purchases to
$50 million per transaction, although purchases of structured notes are limited
to $20 million per transaction and 10% of the Bank's assets.

     Industrial, Financial Corporation and Other.  The Bank's policy limits
investments in corporate bonds with maturities of ten years or less to bonds
rated "A" or better by at least one nationally recognized rating agency and to a
total investment of 25% of the Bank's assets, with a 1% limitation of a single
issuer.  The Bank's policy limits investments in corporate bonds with maturities
between 10 years and 30 years to bonds rated "A" or better by at least one
nationally recognized rating agency and a total investment of no more than 33%
of the Bank's current total corporate investments.  Consistent with the Bank's
current securities investment strategy, the Bank has continued to de-emphasized
investments in corporate debt obligations during 1999. At December 31, 1999, the
Bank had no corporate bond holdings.

     Municipal Bonds.  At December 31, 1999, the Bank's municipal bond portfolio
totaled $4.8 million, all of which was classified as available-for-sale.  Such
securities were comprised of general obligation bonds (i.e., obligations backed
by the general credit of the issuer).  All of the Bank's municipal bonds are
currently rated "AAA" by at least one national rating agency.  At December 31,
1999, the average life of the portfolio was approximately 3.71 years and the
portfolio had a weighted average coupon rate of 5.61%. Interest earned on
municipal bonds is exempt from federal, state and local income taxes.  The
Bank's current policy is to de-emphasize its investment in municipal bonds.

     Equity Securities.  At December 31, 1999, the Bank's equity securities
portfolio totaled $201.3 million, all of which was classified as available-for-
sale.  The Company, on an unconsolidated basis, also has an equity securities
portfolio totaling $187.2 million, all of which was classified as available-for-
sale at December 31, 1999.  The Company's equity securities portfolio consisted
of trust preferreds, common and preferred stock.  The majority of the Company's
preferred stock portfolio is redeemable by the issuers pursuant to the terms of
the preferred stock, generally after a three to five year holding period.  As of
December 31, 1999, the Company did not have any preferred stock eligible for
redemption within one year.  The Company benefits from its investment in common
and preferred stocks due to a tax deduction the Company receives with regards to
dividends paid by corporate issuers on equity securities.

     Included in the Bank's equity securities at December 31, 1999 was a $16.8
million investment in two common stock mutual funds.  The Bank's policy limit
for its common and preferred stock investments is 5% and 7.5%, respectively, of
its total assets and allows for the purchase of common and preferred stock with
a 1% limitation on the purchase of any single issuer.  At December 31, 1999, the
Bank's policies permit the purchase of preferred stock rated "Baa" or better by
at least one national rating agency, with a 1% limitation on the purchase of
preferred stock of any single issuer.

     The Company's investment policy was modified in 1998 to include capital
notes/trust preferreds issued primarily by financial institutions.  These
securities represent secondary capital and rank subordinate and junior in right
of payment to all indebtedness of the issuing company.  These higher yielding
securities generally are non-rated, or rated below investment grade.  In order
to offset the higher degree of risk, management will focus primarily on, but not
limited to, securities issued by New York metropolitan area institutions.  At
December 31, 1999, the Company had $169.0 million of trust preferreds.

                                       26
<PAGE>

     The following table sets forth the composition of the Company's debt and
equity and mortgage-backed and mortgage related securities portfolios in dollar
amounts and in percentages at the dates indicated:

<TABLE>
<CAPTION>
                                                                                 At December 31,
                                                    ---------------------------------------------------------------------------
                                                            1999                    1998                       1997
                                                    -------------------    --------------------     -----------------------
                                                               Percent                  Percent                 Percent
                                                      Amount   of Total      Amount    of Total     Amount      of Total
                                                    ---------  --------    ----------  --------     ----------  --------
                                                                           (Dollars in thousands)
<S>                                                 <C>        <C>         <C>         <C>          <C>         <C>
Debt securities:
 U.S. Government obligations                        $   67,880     1.92%   $  191,669      4.95%    $  279,939      6.62%
 U.S. Government agency securities                     267,942     7.59       154,986      4.01        206,322      4.87
 Public utility bonds                                        -        -           800      0.02            901      0.02
 State, county and municipal bonds                       4,833     0.14         5,551      0.14          8,248      0.19
 Industrial, financial corporation and other                 -        -        23,737      0.61         36,323      0.86
                                                    ----------   ------    ----------    ------     ----------    ------
   Total debt securities                               340,655     9.65       376,743      9.73        531,733     12.56
                                                    ----------   ------    ----------    ------     ----------    ------
Equity securities:
  Preferred and common stock and other                 219,506     6.21       300,857      7.78        298,968      7.06
  Trust preferreds                                     169,040     4.79       144,727      3.75              -         -
                                                    ----------   ------    ----------    ------     ----------    ------
   Total equity securities                             388,546    11.00       445,584     11.53        298,968      7.06
                                                    ----------   ------    ----------    ------     ----------    ------

Mortgage-backed and mortgage related
 securities:
  FHLMC                                                173,581     4.92        69,315      1.79        343,623      8.12
  GNMA                                                 797,202    22.58     1,606,893     41.54      1,624,207     38.37
  FNMA                                                 235,817     6.68        70,642      1.83         92,689      2.19
  CMOs                                               1,594,684    45.17     1,299,249     33.58      1,341,611     31.70
                                                    ----------   ------    ----------    ------     ----------    ------
   Total mortgage-backed and mortgage
    related securities                               2,801,284    79.35     3,046,099     78.74      3,402,130     80.38
                                                    ----------   ------    ----------    ------     ----------    ------
     Total securities                               $3,530,485   100.00%   $3,868,426    100.00%    $4,232,831    100.00%
                                                    ==========   ======    ==========    ======     ==========    ======

  Debt and equity securities
    available-for-sale                              $3,530,485   100.00%   $3,868,426    100.00%    $4,232,831    100.00%
                                                    ==========   ======    ==========    ======     ==========    ======
                                                    $  729,201    20.65%   $  795,362     20.56%    $  786,679     18.58%
  Debt securities held-to-maturity                           -        -        26,965      0.70         44,022      1.04
                                                    ----------   ------    ----------   -------     ----------    ------
     Total debt and equity securities                  729,201    20.65       822,327     21.26        830,701     19.62
                                                    ----------   ------    ----------   -------     ----------    ------
  Mortgage-backed and mortgage related
     securities available-for-sale                   2,801,284    79.35     1,795,833     46.42      2,024,729     47.84
  Mortgage-backed and mortgage related
     securities held-to-maturity                             -        -     1,250,266     32.32      1,377,401     32.54
                                                    ----------   ------    ----------   -------     ----------    ------
     Total mortgage-backed and mortgage
       related securities                            2,801,284    79.35     3,046,099     78.74      3,402,130     80.38
                                                    ----------   ------    ----------   -------     ----------    ------
     Total securities                               $3,530,485   100.00%   $3,868,426    100.00%    $4,232,831    100.00%
                                                    ==========   ======    ==========    ======     ==========    ======
</TABLE>

                                       27
<PAGE>

The following table sets forth certain information regarding the amortized cost
and estimated fair value of the Company's debt and equity and mortgage-backed
and mortgage related securities at the dates indicated:

<TABLE>
<CAPTION>
                                                                    At December 31,
                                 ------------------------------------------------------------------------------------
                                               1999                         1998                        1997
                                 -----------------------------   -------------------------    -----------------------
                                                    Estimated                   Estimated                  Estimated
                                   Amortized          Fair        Amortized       Fair        Amortized       Fair
                                      Cost            Value         Cost          Value         Cost          Value
                                 -----------      -----------   -----------   -----------   -----------   -----------
                                                                     (In thousands)
<S>                             <C>              <C>           <C>           <C>           <C>           <C>
Debt and equity securities:
 Held-to-maturity:
  U. S. Government agency
   securities                   $          -     $          -  $          -  $          -  $      6,000  $      5,997
  Public utility bonds                     -                -           800           796           901           872
  State, county and municipal
   bonds                                   -                -         5,551         5,809         8,248         8,544
  Industrial, financial
   corporation and other                   -                -        20,614        20,543        28,873        28,796
                                 -----------      -----------   -----------   -----------   -----------   -----------
   Total debt securities
    held-to-maturity                       -                -        26,965        27,148        44,022        44,209
 Available-for-sale:
  U. S. Government obligations        67,192           67,880       187,250       191,669       275,847       279,939
  U. S. Government agency
   securities                        287,642          267,942       154,353       154,986       200,154       200,322
  State, county and municipal
   bonds                               4,762            4,833             -             -             -             -
  Industrial, financial
   corporation and other                   -                -         3,003         3,123         7,397         7,450
                                 -----------      -----------   -----------   -----------   -----------   -----------
     Total debt securities
      available-for-sale             359,596          340,655       344,606       349,778       483,398       487,711
Equity securities
 available-for-sale:
Preferred and common stock
 and other                           244,395          219,506       283,743       300,857       262,422       298,968
Trust preferreds                     194,604          169,040       147,131       144,727             -             -
                                 -----------      -----------   -----------   -----------   -----------   -----------
  Total equity securities
   available-for-sale                438,999          388,546       430,874       445,584       262,422       298,968
                                 -----------      -----------   -----------   -----------   -----------   -----------
   Total debt and equity
    securities                       798,595          729,201       802,445       822,510       789,842       830,888
                                 -----------      -----------   -----------   -----------   -----------   -----------
Mortgage-backed and mortgage
    related securities:
 Held-to-maturity:
  FHLMC                                    -                -        65,864        68,245        85,969        89,137
  GNMA                                     -                -     1,045,918     1,060,676     1,002,553     1,025,316
  FNMA                                     -                -        67,500        68,082        85,777        86,058
  CMOs                                     -                -        70,984        71,458       203,102       203,486
                                 -----------      -----------   -----------   -----------   -----------   -----------
   Total mortgage-backed and
      mortgage related
      securities
      held-to-maturity                     -                -     1,250,266     1,268,461     1,377,401     1,403,997
                                 -----------      -----------   -----------   -----------   -----------   -----------
 Available-for-sale:
  FHLMC                              171,591          173,581         3,431         3,451       254,702       257,654
  GNMA                               813,335          797,202       554,533       560,975       611,431       621,654
  FNMA                               240,151          235,817         3,135         3,142         6,758         6,912
  CMOs                             1,696,202        1,594,684     1,228,644     1,228,265     1,127,327     1,138,509
                                 -----------      -----------   -----------   -----------   -----------   -----------
   Total mortgage-backed and
      mortgage related
      securities
      available-for-sale           2,921,279        2,801,284     1,789,743     1,795,833     2,000,218     2,024,729
                                 -----------      -----------   -----------   -----------   -----------   -----------
      Total mortgage-backed
       and mortgage related
       securities                  2,921,279        2,801,284     3,040,009     3,064,294     3,377,619     3,428,726
                                 -----------      -----------   -----------   -----------   -----------   -----------
Net unrealized (loss) gain on
 securities available-for-sale      (189,389)               -        25,972             -        65,370             -
                                 -----------      -----------   -----------   -----------   -----------   -----------
Total securities amortized
 cost/estimated fair value      $  3,530,485     $  3,530,485  $  3,868,426  $  3,886,804  $  4,232,831  $  4,259,614
                                ============     ============  ============  ============  ============  ============

</TABLE>

                                      28

     The table below sets forth certain information regarding the carrying
value, weighted average yields and contractual maturities of the Company's
securities portfolio as of December 31, 1999:

<TABLE>
<CAPTION>

                                  ---------------------------------------------------------------------------------------
                                                                       More than One                  More than Five
                                      One Year or Less              Year to Five Years             Years to Ten Years
                                  ----------------------         ----------------------         ----------------------
                                                Weighted                       Weighted                       Weighted
                                    Carrying    Average            Carrying    Average            Carrying    Average
                                     Value       Yield              Value       Yield              Value       Yield
                                  ----------   ---------         ----------    --------         ----------    --------
                                                                                                (Dollars in thousands)
<S>                               <C>            <C>                <C>         <C>                <C>         <C>
Available-for-sale
 securities:
Mortgage-backed and
 mortgage related
 securities:
 GNMA                             $        -           -  %      $       98       10.44  %      $    3,657       10.42  %

 FNMA                                      -           -                  -           -                  -           -
 FHLMC                                     -           -                  -           -                  -           -
 CMOs                                      -           -              2,085        8.01             58,336        6.74
                                  ----------                      ---------                     ----------
   Total
    mortgage-backed
    and mortgage related
    securities                             -           -              2,183        8.12             61,993        6.96
                                  ----------                      ---------                     ----------
Debt securities:
 U. S. Government
  obligations                         26,016        6.21             41,864        7.43                  -           -
 U. S. Government
  agency securities                        -           -                  -           -             24,125        7.33
 State, county and
  municipal bonds                      1,287        5.33              2,354        5.80                 36        5.50
                                  ----------                      ---------                     ----------
   Total debt
    securities                        27,303        6.17             44,218        7.34             24,161        7.33
                                  ----------                      ---------                     ----------
Equity securities (1):
 Preferred and common
  stock and other                          -           -                  -           -                  -           -
 Trust preferreds                          -           -                  -           -                  -           -
                                  ----------                      ---------                     ----------
   Total equity
    securities                             -           -                  -           -                  -           -
                                  ----------                      ---------                     ----------
 Total
  available-for-sale
  securities                       $    27,303        6.17        $    46,401        7.38       $   86,154        7.06
                                   ===========                    ===========                   ==========
<CAPTION>
                                  ----------------------------------------------------------
                                    More than Ten Years                  Total
                                  ----------------------         ----------------------
                                                Weighted                       Weighted
                                    Carrying    Average            Carrying    Average
                                     Value       Yield              Value       Yield
                                  ----------   ---------         ----------    --------
<S>                               <C>            <C>                <C>         <C>
Available-for-sale
 securities:
 Mortgage-backed and
 mortgage related
  securities:
   GNMA                           $  793,447        6.87%        $   797,202        6.91%
   FNMA                              235,817        7.36             235,817        7.36
   FHLMC                             173,581        7.71             173,581        7.71
   CMOs                            1,534,263        6.60           1,594,684        6.60
                                  ----------                     -----------
     Total
      mortgage-backed
      and mortgage related
      securities                   2,737,108        6.81           2,801,284        6.82
                                  ----------                     -----------
Debt securities:
 U. S. Government
  obligations                              -           -              67,880        6.96
 U. S. Government
  agency securities                  243,817        7.56             267,942        7.55
 State, county and
  municipal bonds                      1,156        5.51               4,833        5.60
                                 -----------                     -----------
   Total debt
    securities                       244,973        7.56             340,655        7.40
                                  ----------                     -----------
Equity securities (1):
 Preferred and common
  stock and other                    219,506        5.36             219,506        5.36
 Trust preferreds                    169,040        8.56             169,040        8.56
                                 -----------                     -----------
    Total equity securities          388,546        6.76             388,546        6.75
                                 -----------                     -----------
 Total available-for-sale
  securities                     $ 3,370,627        6.85         $ 3,530,485        6.87
                                 ===========                     ===========
</TABLE>
(1)  As equity securities have no maturities, they are classified in the more
     than ten year category.

                                       29
<PAGE>

Sources of Funds

     General.  Deposits, repayments and prepayments of loans and securities,
proceeds from sales of loans and securities, and proceeds from maturing
securities and cash flows from operations are the primary sources of the Bank's
funds for use in lending, investing and for other general purposes.  The Bank
also utilizes borrowed funds, primarily reverse-repurchase agreements and FHLB
borrowings to fund its operations.

     Deposits.  The Bank offers a variety of deposit accounts with a range of
interest rates and terms. At December 31, 1999, the Bank's deposit accounts
consisted of savings (including school savings and club accounts), Super NOW and
NOW accounts, checking accounts, money market accounts and certificates of
deposit.  The Bank offers certificates of deposit with balances in excess of
$100,000 at preferential rates (jumbo certificates) and also offers Individual
Retirement Accounts (IRAs) and other qualified plan accounts.  To enhance the
deposit products it offers, and increase its market share, the Bank added
commercial checking accounts for small to moderately-sized commercial
businesses, a payroll account service with direct deposit features, new money
market and certificates of deposit products, as well as a low-cost checking
account service for low-income customers.

     At December 31, 1999, the Bank's deposits totaled $4.05 billion.  For the
year ended December 31, 1999, the average balance of core deposits (savings,
Super NOW and NOW, money market and non-interest-bearing checking accounts)
totaled $1.45 billion, or 34.3%, of total average deposits.  At December 31,
1999, the Bank had a total of $2.61 billion in certificates of deposit, of which
$1.88 billion had maturities of one year or less.  For the year ended December
31, 1999, the average balance of certificate of deposit accounts represented
65.7% of total average deposits.  Although the Bank has a significant portion
of its deposits in shorter term certificates of deposit, management monitors
activity on the Bank's certificate of deposit accounts and, based on historical
experience and the Bank's current pricing strategy, believes it will retain a
large portion of such accounts upon maturity.

     The flow of deposits is influenced significantly by general economic
conditions, changes in money market rates, prevailing interest rates and
competition.  The Bank's deposits are obtained predominantly from the areas in
which its branch offices are located.  The Bank relies primarily on competitive
pricing of its deposit products, customer service and long-standing
relationships with customers to attract and retain these deposits; however,
market interest rates and rates offered by competing financial institutions
significantly affect the Bank's ability to attract and retain deposits.  In
addition, the Bank has historically paid a special interest payment on savings
and NOW accounts, ranging from 5% to 25% of interest paid on these accounts
during the year.  For each of the years ended December 31, 1999, 1998 and the
Bank paid a special interest payment of 5%, 15% and 25%, respectively of
interest paid on savings and NOW accounts, which totaled $336,000, $970,000 and
$2.3 million, respectively.  Prior to 1999, such payments were not made to T R
Financial Corp. accounts.  The Bank has made no decision as to the amount of
such special interest payment or whether such special interest payments will
continue after 1999.  The Bank uses traditional means of advertising its deposit
products, including radio and print media and generally does not solicit
deposits from outside its market area.  While certificate accounts in excess of
$100,000 are accepted by the Bank, and may be subject to preferential rates, the
Bank does not actively solicit such deposits as such deposits are more difficult
to retain than core deposits.  Although the Bank has historically not used
brokers to obtain deposits, the Bank has authorized the utilization of brokers
to obtain deposits to fund its activities and has entered into several
relationships with a nationally recognized retail brokerage firm to accept
deposits sold by such brokerage firm.  Dependent on market conditions, the Bank
will periodically use such brokered deposits

                                      30
<PAGE>

primarily to fund asset growth and manage interest rate risk. The Bank's
policies limit the amount of brokered deposits which the Bank may have at any
time to 25% of total retail deposits. At December 31, 1999, the Bank had $94.6
million in brokered deposits, or 2.3% of total deposits.

     The following table presents the deposit activity of the Bank for the
periods indicated.

<TABLE>
<CAPTION>
                                                                         For the Years Ended December 31,
                                                           ------------------------------------------------------
                                                                1999                1998                  1997
                                                           -------------        -------------        -------------
                                                                                (In thousands)
<S>                                                       <C>                  <C>                  <C>
Net withdrawals from deposit accounts                      $    (339,458)       $     (92,640)       $    (327,232)
Interest credited on deposit accounts                            166,088              167,024              172,782
                                                           -------------        -------------        -------------
Total (decrease) increase in deposit accounts              $    (173,370)       $      74,384        $    (154,450)
                                                           =============        =============        =============
</TABLE>


     At December 31, 1999, the Bank had outstanding $490.9 million in
certificate of deposit accounts in amounts of $100,000 or more, maturing as
follows:

<TABLE>
<CAPTION>
                                                              Weighted
       Maturity Period                    Amount            Average Rate
--------------------------------    ---------------------   --------------
                                    (Dollars in thousands)

<S>                                     <C>                  <C>
Three months or less                          $ 117,538        4.86%
Over three through six months                    58,801        5.23
Over six through 12 months                      152,191        5.64
Over 12 months                                  162,353        6.04
                                              ---------
Total                                         $ 490,883        5.54
                                              =========
</TABLE>

                                      31
<PAGE>

        The following table sets forth the distribution of the Bank's average
deposit accounts for the periods indicated and the weighted average interest
rates on each category of deposits presented. Average balances for the periods
presented utilize average daily balances:


<TABLE>
<CAPTION>
                                                                For the Years Ended December 31,
                                  -------------------------------------------------------------------------------------------
                                                     1999                                               1998
                                  ----------------------------------------        -------------------------------------------
                                                  Percent                                         Percent
                                                 of Total                                         of Total
                                     Average      Average       Weighted           Average        Average       Weighted
                                     Balance     Deposits     Average Rate         Balance        Deposits    Average Rate
                                  ----------    ----------    ------------        ----------     ---------    ------------
                                                                                           (Dollars in thousands)
<S>                              <C>             <C>          <C>           <C>        <C>            <C>       <C>
Money market accounts             $   171,720        4.05%       3.82%          $    82,114          1.95%         3.09%
Savings accounts (1)(2)               992,385       23.43        2.20             1,071,426         25.46          2.66
Super NOW and NOW accounts (3)        150,247        3.55        2.14               159,950          3.80          2.86
Non-interest-bearing accounts         140,181        3.31           -               103,635          2.46             -
                                  -----------     -------                       -----------        ------
  Total                             1,454,533       34.34        2.17             1,417,125         33.67          2.51
                                  -----------     -------                       -----------        ------

     Total certificates of
      deposit                       2,781,650       65.66        5.10             2,791,556         66.33          5.57
                                  -----------     -------                       -----------        ------

           Total average
           deposits               $ 4,236,183      100.00%       4.09%          $ 4,208,681        100.00%         4.54%
                                  ===========     =======                       ===========       =======

<CAPTION>

                                          For the Years Ended December 31,
                                     ----------------------------------------
                                                       1997
                                     ----------------------------------------
                                                     Percent
                                                    of Total
                                        Average      Average       Weighted
                                        Balance     Deposits     Average Rate
                                     ----------    ----------    ------------
<S>                                 <C>             <C>          <C>
Money market accounts                  $    70,733        1.69%       2.57%
Savings accounts (1) (2)                 1,080,232       25.74        2.98
Super NOW and NOW accounts (3)             148,145        3.53        3.27
Non-interest-bearing accounts               95,876        2.28           -
                                       -----------      ------
  Total                                  1,394,986       33.24        2.79
                                       -----------      ------
     Total certificates of
      deposit                            2,801,963       66.76        5.69
                                       -----------      ------
           Total average
           deposits                    $ 4,196,949      100.00%       4.73%
                                       ===========      ======
</TABLE>

(1) Includes special interest payments made by the Bank on such accounts for the
    years ended December 31, 1999, 1998 and 1997, which resulted in an increased
    cost of such accounts of 4 basis points, 18 basis points, and 48 basis
    points, respectively. Prior to 1999, such payments were not made to T R
    Financial Corp. accounts.
(2) Savings accounts include mortgagors' escrow deposits.
(3) Includes special interest payments made by the Bank on the NOW accounts for
    the years ended December 31, 1999, 1998 and 1997, which resulted in an
    increased cost of such accounts of 2 basis points, 8 basis points and 18
    basis points, respectively.  Prior to 1999, such payments were not made to
    T R Financial Corp. accounts.

                                      32
<PAGE>

     The following table presents, by various rate categories, the amount of
certificate of deposit accounts outstanding at the dates indicated:

<TABLE>
<CAPTION>

                           Period to Maturity from December 31, 1999
                  ---------------------------------------------------------------
                                Greater       Greater       Greater     Greater
                       One       Than          Than          Than        Than
                      Year     One to Two     Two to      Three to      Four to
                    or Less      Years      Three Years   Four Years   Five Years
                  ----------   ----------   -----------   ----------   ----------
                                         (In thousands)
Certificates
 deposit:
<S>               <C>          <C>          <C>           <C>          <C>
0 to 3.00%        $       90     $    103      $     25     $     42   $        -
3.01 to 4.00%            457            -             -            -            -
4.01 to 5.00%        901,424       27,292           590        1,131        1,440
5.01 to 6.00%        931,546      308,837        91,641       31,669       33,629
6.01 to 7.00%         28,662      105,185        55,361       10,323       19,786
7.01 to 8.00%          5,695       10,351         6,054            7          153
Over 8.01%            11,258        1,685            32            5            -
                  ----------     --------      --------     --------   ----------

     Total        $1,879,132     $453,453      $153,703     $ 43,177   $   55,008
                  ==========     ========      ========     ========   ==========


<CAPTION>
                                            At December 31,
                      -----------   -------------------------------------------
                        Greater
                         Than
                      Five Years         1999            1998            1997
                      -----------   -------------   -------------   -----------
                                           (In thousands)
Certificates
 of deposit:
<S>                   <C>             <C>           <C>              <C>
0 to 3.00%               $      -     $       260      $        -    $        -
3.01 to 4.00%                   -             457               -             -
4.01 to 5.00%                 159         932,036         929,894        145,156
5.01 to 6.00%              14,621       1,411,943       1,455,362      1,864,441
6.01 to 7.00%               5,516         224,833         408,584        689,151
7.01 to 8.00%                 640          22,900          23,999         26,498
Over 8.01%                     45          13,025          17,739         19,742
                         --------     -----------     -----------    -----------
     Total               $ 20,981     $ 2,605,454     $ 2,835,578    $ 2,744,988
                         ========     ===========     ===========    ===========
</TABLE>

                                      33

     Borrowed Funds. The Bank's primary source of borrowings consists of
reverse-repurchase agreements entered into with nationally recognized securities
brokerage firms. At December 31, 1999, the Bank had $2.45 billion of reverse-
repurchase agreements outstanding. Reverse-repurchase agreements are contracts
for the sale of securities owned or borrowed by the Bank with an agreement to
repurchase those securities at an agreed upon price and date. Historically, the
Bank has entered into reverse-repurchase agreements as a method of providing the
Bank with cost effective funding in periods where its needs for funds exceeded
the amount of funds provided by its deposit gathering activities. Currently, the
Bank utilizes such reverse-repurchase agreements in periods when the Bank can
generate securities investments with yields in excess of its cost of such
borrowing. At December 31, 1999, the Bank's policies limit the Bank's use of
reverse-repurchase agreements to maturities of overnight to five years. The
collateral consisting of U.S. Treasury obligations, U.S. agency obligations or
mortgage-backed securities. Securities brokers utilized by the Bank in these
agreements must have a minimum of $100 million of "net" excess capital with a
Public Securities Association Master repurchase agreement on file. At December
31, 1999, the Bank held $195.0 million of reverse-repurchase agreements with
maturities in excess of five years. These agreements were acquired as part of
the Merger, under the investment policy of Roosevelt Savings Bank. The Bank
averaged approximately $2.31 billion in reverse-repurchase agreements during the
year ended December 31, 1999. At December 31, 1999, none of RNMC's mortgage
loans were pledged to secure notes payable to FNMA under a warehouse line of
credit known as the FNMA "As Soon As Pooled Plus Program." These notes are
repaid as the related mortgage loans are sold or collected.

     The Bank maintains a $100.0 million overnight line of credit with the
Federal Home Loan Bank (FHLB).  Included in other borrowed funds at December 31,
1999 is $100.0 million of borrowings drawn under this line at an interest rate
of 4.60%.  At December 31, 1998, such borrowings under this line of credit were
$5.0 million at an interest rate of 5.13%.  In addition, the Bank may access
funds through a $100.0 million one month facility from the FHLB of which $85.0
million at an interest rate of 4.100% was outstanding and included in other
borrowed funds at December 31, 1999.  Additionally, included in other borrowings
at December 31, 1999 were FHLB advances of $75.0 million, which have fixed
interest rates between 5.52% and 5.73%, for five years and which rate may
become convertible by the FHLB in 2002, and quarterly thereafter.  FHLB advances
and FHLB overnight line of credit borrowings are secured under an assignment
arrangement of eligible collateral, primarily mortgage loans, in an amount equal
to 110% of outstanding advances.

     Subsequent to the Merger, the Company restructured $427.1 million of
reverse-repurchase agreement and $118.1 million of FHLB borrowings.  These
borrowed funds had maturities between less than one year and four years and a
weighted average rate of 5.98%.  The borrowings were then replaced with new
funds with a weighted average rate of 4.98% and maturities between less than
one year and four years.  As a result, for the year ended December 31, 1999, the
Company incurred a prepayment penalty of $7.2 million ($4.2 million, net of
tax).  The prepayment penalty is reflected as an extraordinary item in the
Company's consolidated statements of income.

                                      34
<PAGE>

     The following table sets forth certain information regarding borrowed funds
for the dates indicated:

<TABLE>
<CAPTION>
                                                                        For the Years Ended December 31,
                                                        --------------------------------------------------------------
                                                               1999                   1998                   1997
                                                        ----------------       ----------------       ----------------
                                                                             (Dollars in thousands)
<S>                                                     <C>                    <C>                    <C>
Other borrowings:
 Average balance outstanding                            $     247,084          $     529,665           $    503,416
 Maximum amount outstanding at any month
    end during the year                                       411,178                629,105                581,845
 Balance outstanding at end of year                           395,196                433,528                492,910
 Weighted average interest rate during the year                  4.16%                  5.78%                  5.80%
 Weighted average interest rate at end of year                   5.19                   5.72                   5.91
Reverse-repurchase agreements:
 Average balance outstanding                            $   2,305,473          $   2,100,206           $  1,030,796
 Maximum amount outstanding at any month end
   during the year                                          2,594,268              2,341,847              1,802,861
 Balance outstanding at end of year                         2,449,345              2,094,319              1,772,119
 Weighted average interest rate during the year                  5.70%                  5.81%                  5.90%
 Weighted average interest rate at end of year                   5.67                   5.63                   5.90
Total borrowed funds:
 Average balance outstanding                            $   2,552,557          $   2,629,871           $  1,534,212
 Maximum amount outstanding at any month end
    during the year                                         2,844,541              2,868,475              2,295,866
 Balance outstanding at end of year                         2,844,541              2,527,847              2,265,029
 Weighted average interest rate during the year                  5.55%                  5.81%                  5.87%
 Weighted average interest rate at end of year                   5.59                   5.65                   5.90

</TABLE>


Savings Bank Life Insurance

     Effective December 31, 1999, the Savings Bank Mutual Life Insurance
Company, Inc. was restructured and resulted in the cessation of the Bank's
Savings Bank Life Insurance (SBLI) department.  The individuals employed by the
SBLI department were re-deployed by the Bank.

     Previously, the Bank, through its SBLI department, engaged in group life
insurance coverage per individual under SBLI's Financial Institution Group Life
Insurance policy.  The SBLI department's activities were segregated from the
Bank and, while they did not directly affect the Bank's earnings, management
believed that offering SBLI was beneficial to the Bank's relationship with its
depositors and the general public.  The SBLI department paid its own expenses
and reimbursed the Bank for expenses incurred on its behalf.

Subsidiary Activities

     Roslyn National Mortgage Corp.  RNMC is the Bank's wholly owned mortgage
banking subsidiary which was established in August 1995 for the origination,
sale and servicing of one- to four-family loans.  RNMC was formed in connection
with the Bank's acquisition of certain assets and liabilities of Residential
Mortgage Banking, Inc. (RMBI).  RNMC currently operates in New York, New Jersey,
Alabama, Tennessee, Delaware, Pennsylvania, Virginia, Maryland and Tennessee.
The consideration paid for the assets and liabilities of RMBI, including a
$623.0 million loan servicing portfolio, exceeded the estimated fair market
value of the net assets acquired by approximately $3.5 million, which was
recorded by RNMC as goodwill and is being amortized on a straight line basis
over a 10 year period.  RNMC is operated under the direction of its executive
officers who are overseen by RNMC's Board of Directors, which consists of
certain members of the Board of Directors of the

                                      35
<PAGE>

 Company.

     Roslyn Capital Corp.   Roslyn Capital Corp. (RCC) is a subsidiary of the
Bank, organized by the Bank on April 1, 1997 for the purpose of investing in
mortgage related assets as a real estate investment trust.  On that date, the
Bank transferred one- to four-family residential mortgage loans, commercial real
estate loans and mortgage-backed securities totaling $707.0 million, net, which
included certain associated assets and liabilities, to RCC.  In return, the Bank
received shares of common and preferred stock of RCC. The subsidiary will
promote greater retained earnings, through reduced taxes, for the Bank and
thereby serve to strengthen the Bank's capital position from an operational
standpoint.

     RSB Agency, Inc.  RSB Agency, Inc., a wholly owned subsidiary of the Bank
incorporated in 1983, previously engaged in the sale of life insurance and
collects commissions for previously-issued life insurance policies.  RSB Agency,
Inc. is currently active in the sale of annuities, mutual fund and insurance
products for which it receives commissions from third parties.

     Roosevelt Asset Funding Corp. Roosevelt Asset Funding Corp. (RAFC), is a
real estate investment trust which was incorporated in the State of Delaware on
April 28, 1997 for the purpose of investment and reinvestment of its assets in
real property, interests in real property, mortgage loans secured by real
property, interests in mortgage loans secured by real property, leasehold
interests in real property and mortgage-backed securities, including
collateralized mortgage obligations.

     Other Subsidiaries.  The Bank has 16 other wholly owned subsidiaries.
Anaconda Enterprises, Inc., Blizzard Realty Corp., 1400 Corp., BSR Inc., BSR
1400 Corp., Roosevelt Abstract Corp., Roosevelt Land Corp. and 155 East 33rd
Street Corp. are periodically used to hold REO. In addition, BSR 1400 Corp.
holds Bank facilities and leases thereon. Residential Mortgage Banking, Inc. was
established to preserve the name thereof for future use. Old Northern Co. Ltd.,
Bellingham Corp., Roosevelt Service Corporation, Rokings Holding Corporation,
VBF Holding Corporation, Oyster Bay Holding Corporation and Rosouth Holding
Corporation currently are inactive subsidiaries.

     RBI Holdings, Inc. RBI Holdings, Inc. (RBI) a wholly owned subsidiary of
the Holding Company was established on March 17, 1999. RBI is a 50% joint
venture partner in a mortgage banking company, Emeritus Mortgage, which is
engaged in the generation of loan commissions from the sale of loans,
principally to third parties. The Emeritus Mortgage may, from time to time, sell
loans to RNMC at market. The mortgage banking company does not close loans in
its own name and relies on the funding of the purchasing institution.

     RNMC Re, Inc.  RNMC Re, Inc. (RRI), a wholly owned subsidiary of the
Holding Company was established in December 1999.  RRI was organized as a
captive re-issuance company in the state of Vermont.  RRI originates mortgage
impairment policies, which are then delivered to a third party insurance
carrier.  The subsidiary will retain a portion of the risks associated with such
policies for a percentage of the premiums paid.  The individual loans covered by
these policies were originated by a subsidiary of the Bank, RMNC.

Personnel

     As of December 31, 1999, the Bank had 744 full-time employees and 186 part-
time employees.  The employees are not represented by a collective bargaining
unit and the Bank and RNMC considers its relationship with its employees to be
good.

                                      36
<PAGE>

                           REGULATION AND SUPERVISION

General

     The Company, as a savings and loan holding company, is required to file
certain reports with, and otherwise comply with the rules and regulations of,
the OTS.

     The Bank is a New York State chartered stock savings bank and its deposit
accounts are insured up to applicable limits by the FDIC as a member of the Bank
Insurance Fund (BIF).  The Bank is subject to extensive regulation by the NYSBD,
as its chartering agency, and by the FDIC, as the deposit insurer.  The Bank
must file reports with the NYSBD and the FDIC concerning its activities and
financial condition, in addition to obtaining regulatory approvals prior to
entering into certain transactions such as establishing branches and mergers
with, or acquisitions of, other depository institutions.  There are periodic
examinations by the NYSBD and the FDIC to assess the Bank's compliance with
various regulatory requirements and financial condition.  This regulation and
supervision establishes a framework of activities in which a savings bank can
engage and is intended primarily for the protection of the insurance fund and
depositors.  The regulatory structure also gives the regulatory authorities
extensive discretion in connection with their supervisory and enforcement
activities and examination policies, including policies with respect to the
classification of assets and the establishment of adequate loan loss reserves
for regulatory purposes.  Any change in such regulation, whether by the NYSBD,
the FDIC or through legislation, could have a material adverse impact on the
Company and the Bank and their operations and stockholders.  The Company is also
required to file certain reports with and otherwise comply with the rules and
regulations of the OTS, the NYSBD and of the SEC under the federal securities
laws.  Certain of the regulatory requirements applicable to the Bank and to the
Company are referred to below or elsewhere herein.  The description of statutory
provisions and regulations applicable to savings banks and their holding
companies set forth in this Form 10-K does not purport to be a complete
description of such statutes and regulations and their effect on the Bank and
the Company.

New York State Law

     The Bank derives its lending, investment and other authority primarily from
the applicable provisions of New York State Banking Law and the regulations of
the NYSBD, as limited by FDIC regulations.

     The exercise by an FDIC-insured savings bank of the lending and investment
powers of a savings bank under the New York State Banking Law is limited by FDIC
regulations and other federal law and regulations.

     With certain limited exceptions, a New York State chartered savings bank
may not make loans or extend credit for commercial, corporate or business
purposes (including lease financing) to a single borrower, the aggregate amount
of which would be in excess of 15% of the bank's net worth.  The Bank currently
complies with all applicable loans-to-one-borrower limitations.

     Under New York State Banking Law, a New York State chartered stock savings
bank may declare and pay dividends out of its net profits, unless there is an
impairment of capital, but approval of the Superintendent is required if the
total of all dividends declared in a calendar year would exceed the total of its
net profits for that year combined with its retained net profits of the
preceding two years, subject to certain adjustments and any waivers granted.

     Under the New York State Banking Law, the Superintendent may issue an order
to a New York State chartered banking institution to appear and explain an
apparent violation of law, to discontinue unauthorized or unsafe practices and
to keep prescribed books and accounts.  Upon a finding by the NYSBD that any
director, trustee or officer of any banking organization has violated any law,
or has

                                       37
<PAGE>

continued unauthorized or unsafe practices in conducting the business of
the banking organization after having been notified by the Superintendent to
discontinue such practices, such director, trustee or officer may be removed
from office by the NYSBD after notice and an opportunity to be heard.  The Bank
does not know of any past or current practice, condition or violation that might
lead to any proceeding by the Superintendent or the NYSBD against the Bank or
any of its Directors or officers.  The Superintendent also may take possession
of a banking organization under specified statutory criteria.

     Assessments.  Savings banks are required to pay assessments to the NYSBD to
fund operations.  Assessments paid by the Bank for the fiscal year ended
December 31, 1999 totaled $116,000.

FDIC Regulations

     Capital Requirements.  The FDIC has adopted risk-based capital guidelines
to which the Bank is subject.  Risk-based capital ratios are determined by
allocating assets and specified off-balance sheet items to four risk-weighted
categories ranging from 0% to 100%, with higher levels of capital being required
for the categories perceived as representing greater risk.

     These guidelines divide a savings bank's capital into two tiers.  The first
tier (Tier I) includes stockholders' equity, certain non-cumulative perpetual
preferred stock (excluding auction rate issues) and minority interests in equity
accounts of consolidated subsidiaries, less goodwill and other intangible assets
(except mortgage servicing rights and purchased credit card relationships
subject to certain limitations).  Supplementary (Tier II) capital includes,
among other items, cumulative perpetual and long-term limited-life preferred
stock, mandatory convertible securities, certain hybrid capital instruments,
term subordinated debt and the allowance for loan and lease losses, subject to
certain limitations, less required deductions.  Savings banks are required to
maintain a total risk-based capital ratio of at least 8%, of which at least 4%
must be Tier I capital.

     In addition, the FDIC regulations prescribe a minimum Tier I leverage ratio
(Tier I capital to adjusted total assets as specified in the regulations) of 3%
for banks that meet certain specified criteria, including that they have the
highest examination rating and are not experiencing or anticipating significant
growth.  All other banks are required to maintain a Tier I leverage ratio of at
least 4%.  The FDIC may, however, set higher leverage and risk-based capital
requirements on individual institutions when particular circumstances warrant.

     The following is a summary of the Bank's regulatory capital at December 31,
1999:

          GAAP Capital to Total Assets              6.06 %
          Total Capital to Risk-Weighted Assets    16.42 %
          Tier I Leverage Ratio                     6.93 %

     The FDIC, along with the other federal banking agencies, has adopted a
regulation providing that the agencies will take account of the exposure of a
bank's capital and economic value to changes in interest rate risk in assessing
a bank's capital adequacy.  The agencies issued a joint policy statement
providing guidance on interest rate risk management, including a discussion of
the critical factors affecting the agencies' evaluation of interest rate risk in
connection with capital adequacy.

     Standards for Safety and Soundness.  The federal banking agencies have
adopted final regulations and Interagency Guidelines Establishing Standards for
Safety and Soundness (Guidelines) to implement safety and soundness standards.
The Guidelines set forth the safety and soundness standards that the federal
banking agencies use to identify and address problems at insured depository
institutions before capital becomes impaired.  If the appropriate federal
banking agency determines that an institution fails to meet any standard
prescribed by the Guidelines, the agency may require the institution to submit
to the agency an acceptable plan to achieve compliance with the standard.

                                       38
<PAGE>

     Dividend Limitations.  The FDIC has authority to use its enforcement powers
to prohibit a savings bank from paying dividends if, in its opinion, the payment
of dividends would constitute an unsafe or unsound practice. Federal law
prohibits the payment of dividends by a bank that will result in the bank
failing to meet applicable capital requirements on a pro forma basis.
Additionally, the Bank, as a subsidiary of a savings and loan holding company,
is required to provide the OTS with 30 days prior written notice before
declaring any dividend. The Plan of Conversion also restricts the Bank's payment
of dividends in the event the dividend would impair the liquidation account
established in connection with the Conversion. The Bank is also subject to
dividend declaration restrictions imposed by New York State law.

Investments and Activities

     The activities of all state-chartered financial institutions, including
savings banks and their subsidiaries, have generally been limited by federal law
to those activities of the type and in the amount authorized for national banks,
notwithstanding state law.  Applicable regulations thereunder permit certain
exceptions to these limitations.  For example, certain state chartered banks,
such as the Bank, may, with FDIC approval, continue to exercise state authority
to invest in common or preferred stocks listed on a national securities exchange
or the National Market System of NASDAQ and in the shares of an investment
company registered under the Investment Company Act of 1940, as amended.  Such
banks may also continue to sell savings bank life insurance.  In addition, the
FDIC is authorized to permit such institutions to engage in state authorized
activities or investments that do not meet this standard (other than non-
subsidiary equity investments) if the institutions that meet all applicable
capital requirements if it is determined that such activities or investments do
not pose a significant risk to the BIF.  All non-subsidiary equity investments,
unless otherwise authorized or approved by the FDIC, must have been divested by
December 19, 1996, pursuant to a FDIC-approved divestiture plan unless such
investments were grandfathered by the FDIC.  The Bank received grandfathering
authority from the FDIC in February 1993 to invest in listed stocks and/or
registered shares subject to the maximum permissible investment of 100% of Tier
I capital, as specified by the FDIC's regulations, or the maximum amount
permitted by New York State Banking Law, whichever is less.  Such grandfathering
authority is subject to termination upon the FDIC's determination that such
investments pose a safety and soundness risk to the Bank or in the event the
Bank converts its charter or undergoes a change in control.  As of December 31,
1999, the Bank had $211.4 million of securities which were subject to such
grandfathering authority.  The Gramm-Leach-Bliley Act of 1999 authorizes state
banks that meet certain conditions to invest in "financial subsidiaries" that
engage in activities permitted for financial subsidiaries of national banks to
conduct, including investment banking.

Prompt Corrective Regulatory Action

     Federal law requires, among other things, that federal bank regulatory
authorities take "prompt corrective action" with respect to banks that do not
meet minimum capital requirements, the severity of which depends upon the degree
of under capitalization.

     An institution is deemed to be "adequately capitalized" if it has a total
risk-based capital ratio of 8% or greater, a Tier I risk-based capital ratio of
4% or greater, and generally a leverage ratio of 4% or greater.  An institution
is deemed to be "undercapitalized" if it has a total risk-based capital ratio of
less than 8%, a Tier I risk-based capital ratio of less than 4%, or generally a
leverage ratio of less than 4%.  An institution is deemed to be "significantly
undercapitalized" if it has a total risk-based capital ratio of less than 6%, a
Tier I risk-based capital ratio of less than 3%, or a leverage ratio of less
than 3%.  An institution is deemed to be "critically undercapitalized" if it has
a ratio of tangible equity (as defined in the regulations) to total assets that
is equal to or less than 2%.

     "Undercapitalized" banks are subject to growth, capital distribution
(including dividend) and other limitations and are required to submit a capital
restoration plan.  A bank's compliance with such plan is required to be
guaranteed by any company that controls the undercapitalized institutions.  If
an

                                       39
<PAGE>

"undercapitalized" bank fails to submit an acceptable plan, it is treated as
if it is "significantly undercapitalized."  "Significantly undercapitalized"
banks are subject to one or more of a number of additional restrictions,
including but not limited to an order by the FDIC to sell sufficient voting
stock to become adequately capitalized, requirements to reduce total assets and
cease receipt of deposits from correspondent banks or dismiss directors or
officers, and restrictions on interest rates paid on deposits, compensation of
executive officers and capital distributions by the parent holding company.
"Critically undercapitalized" institutions also may not, beginning 60 days after
becoming "critically undercapitalized," make any payment of principal or
interest on certain subordinated debt or extend credit for a highly leveraged
transaction or enter into any material transaction outside the ordinary course
of business.  In addition, "critically undercapitalized" institutions are
subject to appointment of a receiver or conservator.  Generally, subject to a
narrow exception, the appointment of a receiver or conservator is required for a
"critically undercapitalized" institution within 270 days after it obtains such
status.

Transactions with Affiliates

     Transactions between depository institutions and their affiliates are
governed by federal law.  An affiliate of a savings bank is any company or
entity that controls, is controlled by, or is under common control with the
savings bank, other than a subsidiary.  Generally, the extent to which the
savings bank or its subsidiaries may engage in "covered transactions" with any
one affiliate is limited to an amount equal to 10% of such savings bank's
capital stock and surplus. There is an aggregate limit on all such transactions
with all affiliates to an amount equal to 20% of such capital stock and surplus.
The term "covered transaction" includes the making of loans or other extensions
of credit to an affiliate; the purchase of assets from an affiliate, the
purchase of, or an investment in, the securities of an affiliate; the acceptance
of securities of an affiliate as collateral for a loan or extension of credit to
any person; or issuance of a guarantee, acceptance, or letter of credit on
behalf of an affiliate.  Federal law also establishes specific collateral
requirements for loans or extensions of credit to, or guarantees, acceptances on
letters of credit issued on behalf of an affiliate.  Section 23B requires that
covered transactions and a broad list of other specified transactions be on
terms substantially the same, or no less favorable, to the savings bank or its
subsidiary as similar transactions with non-affiliated parties.

     Federal law also restricts a savings bank with respect to loans to
directors, executive officers, and principal stockholders.  Loans to directors,
executive officers and stockholders who control, directly or indirectly, more
than 10% of a savings bank, and certain related interests of any of the
foregoing, may not exceed, together with all other outstanding loans to such
persons and affiliated entities, the savings bank's total capital and surplus.
Loans above certain amounts to directors, executive officers, and stockholders
who control more than 10% of a stock savings bank, and their respective related
interests, must be approved in advance by a majority of the board of directors
of the savings bank.  Loans to directors, executive officers and principal
stockholders must be made on terms substantially the same as offered in
comparable transactions to other persons.  Recent legislation created an
exception for loans made pursuant to a benefit or compensation program that is
widely available to all employees of the institution and does not give
preference to insiders over other employees.  Federal law places additional
limitations on loans to executive officers.

Enforcement

     The FDIC has extensive enforcement authority over insured savings banks,
including the Bank. This enforcement authority includes, among other things, the
ability to assess civil money penalties, to issue cease and desist orders and to
remove directors and officers.  In general, these enforcement actions may be
initiated in response to violations of laws and regulations and to unsafe or
unsound practices.  The FDIC has authority under federal law to appoint a
conservator or receiver for an insured savings bank under certain circumstances.

                                       40
<PAGE>

Insurance of Deposit Accounts

     The FDIC has adopted a risk-based insurance assessment system. The FDIC
assigns an institution to one of three capital categories based on the
institution's financial information, as of the reporting period ending seven
months before the assessment period, consisting of (i) well capitalized, (ii)
adequately capitalized or (iii) undercapitalized, and one of three supervisory
subcategories within each capital group. The supervisory subgroup to which an
institution is assigned is based on a supervisory evaluation provided to the
FDIC by the institution's primary federal regulator and information which the
FDIC determines to be relevant to the institution's financial condition and the
risk posed to the deposit insurance funds. An institution's assessment rate
depends on the capital category and supervisory category to which it is
assigned. Assessment rates currently range from 0 basis points to 27 basis
points. The FDIC is authorized to raise the assessment rates in certain
circumstances. The FDIC has exercised this authority several times in the past
and may raise insurance premiums in the future. If such action is taken by the
FDIC, it could have an adverse effect on the earnings of the Bank. On September
30, 1996, the President signed into law the Deposit Insurance Funds Act of 1996
(the Funds Act) which, among other things, imposed a special one-time assessment
on Savings Association Insurance Fund member institutions to recapitalize SAIF.
The Funds Act also spread the obligations for payment of the Financing
Corporation (FICO) bonds across all SAIF and BIF members. This assessment is in
addition to any FDIC insurance assessment. For 1999, BIF members paid
approximately 1.3 basis points toward the FICO payment while SAIF members paid
approximately 6.5 basis points. Full pro rata sharing of FICO payments between
SAIF and BIF members commenced January 1, 2000. The Bank's insurance premiums
were $648,000 during fiscal 1999.

     Under the FDI Act, insurance of an institution's deposits may be terminated
by the FDIC upon a finding that the institution has engaged in unsafe or unsound
practices, is in an unsafe or unsound condition to continue operations or has
violated any applicable law, regulation, rule, order or condition imposed by the
FDIC or the Division.  The management of the Bank does not know of any practice,
condition or violation that might lead to termination of deposit insurance.

Federal Reserve System

     The Federal Reserve Board regulations require depository institutions to
maintain non-interest-earning reserves against their transaction accounts
(primarily Super NOW, NOW and regular checking accounts).  For 2000, the Federal
Reserve Board regulations required that reserves be maintained against aggregate
transaction accounts as follows:  for that portion of transaction accounts
aggregating $44.3 million or less (subject to adjustment by the Federal Reserve
Board) the reserve requirement is 3%, plus 10% (subject to adjustment by the
Federal Reserve Board between 8% and 14%) against that portion of total
transaction accounts in excess of $44.3 million.  The first $5.0 million of
otherwise reservable balances (subject to adjustments by the Federal Reserve
Board) are exempted from the reserve requirements.  The Bank is in compliance
with the foregoing requirements.

Holding Company Regulation

     The Company is regulated as a non-diversified unitary savings and loan
holding company within the meaning of the federal law.  As such, the Company has
registered with the OTS and will be subject to OTS regulations, examinations,
supervision and reporting requirements.  In addition, the OTS has enforcement
authority over the Company and its non-savings institution subsidiaries.  This
authority permits the OTS to restrict or prohibit activities that are determined
to be a serious risk to the subsidiary savings institution.  Additionally, the
Bank is required to notify the OTS at least 30 days before declaring any
dividend to the Company.

     As a unitary savings and loan holding company, the Company generally is not
restricted under existing laws as to the types of business activities in which
it may engage.  Upon any non-supervisory acquisition by the Company of another
savings association as a separate subsidiary, the Company would become a
multiple savings and loan holding company and would be subject to extensive
limitations on the types of business activities in which it could engage.  The
Home Owners' Loan Act (HOLA) limits

                                       41
<PAGE>

the activities of a multiple savings and loan holding company and its non-
insured institution subsidiaries primarily to activities permissible for bank
holding companies under Section 4(c)(8) of the Bank Holding Company Act, as
amended, subject to the prior approval of the OTS, and to other activities
authorized by OTS regulation. Multiple savings and loan holding companies are
prohibited from acquiring or retaining, with certain exceptions, more than 5% of
a non-subsidiary holding company, or a non-subsidiary company engaged in
activities other than those permitted by multiple savings and loan holding
companies. Recent legislation designed to modernize the regulation of the
financial services industry expands the ability of bank holding companies to
affiliate with other types of financial services companies such as insurance
companies and investment banking companies. However, the legislation provides
that companies that acquire control of a single savings association after May 4,
1999 (or that filed an application for that purpose after that date) are not
entitled to the unrestricted activities formerly allowed for a unitary savings
and loan holding company. Rather, these companies will have authority to engage
in the activities permitted "a financial holding company" under the new
legislation, including insurance and securities-related activities, and the
activities currently permitted for multiple savings and loan holding companies,
but generally not in non financial activities. The authority for unrestricted
activities is grandfathered for unitary savings and loan holding companies, such
as the Company, that existed prior to May 4, 1999. However, the authority for
unrestricted activities would not apply to any company that was to acquire the
Company.

     The HOLA prohibits a savings and loan holding company, directly or
indirectly, or through one or more subsidiaries, from acquiring more than 5% of
the voting stock of another savings institution, or holding company thereof, or
from acquiring such an institution or company by merger, consolidation or
purchase of its assets, without prior written approval of the OTS.  In
evaluating applications by holding companies to acquire savings institutions,
the OTS must consider the financial and managerial resources and future
prospects of the company and institution involved, the effect of the acquisition
on the risk to the insurance funds, the convenience and needs of the community
and competitive factors.

     The OTS is prohibited from approving any acquisition that would result in a
multiple savings and loan holding company controlling savings institutions in
more than one state, except: (i) interstate supervisory acquisitions by savings
and loan holding companies, and (ii) the acquisition of a savings institution in
another state if the laws of the state of the target savings institution
specifically permit such acquisitions.  The states vary in the extent to which
they permit interstate savings and loan holding company acquisitions.

     In order for the Company to continue to be regulated as a savings and loan
holding company by the OTS (rather than as a bank holding company by the Federal
Reserve Board), the Bank must continue to qualify as a qualified thrift lender.
In order to qualify as a qualified thrift lender, the Bank must maintain
compliance with a Qualified Thrift Lender Test.  Under the Qualified Thrift
Lender Test, a savings institution is required to qualify as a "domestic
building loan association" within the meaning of the Internal Revenue Code or
maintain at least 65% of its "portfolio assets" (total assets less: (i)
specified liquid assets up to 20% of total assets; (ii) intangibles, including
goodwill; and (iii) the value of property used to conduct business) in certain
"qualified thrift investments" (primarily residential mortgages and related
investments, including certain mortgage-backed and mortgage related securities)
in at least nine months out of each 12 month period.  A holding company of
an institution that fails the test must either convert to a bank holding company
and thereby become subject to the regulation and supervision of the Federal
Reserve Board or operate under certain restrictions.  For the year ended
December 31, 1999, the Bank maintained in excess of 94.45% of its portfolio
assets in qualified thrift investments.  The Bank met all of the requirements
relating to the QTL Test for the year ended December 31, 1999.

     New York State Holding Company Regulation.  In addition to the federal
holding company regulations, a bank holding company organized or doing business
in New York State may be also subject to regulation under the New York State
Banking Law.  The term "bank holding company," for purposes of the New York
State Banking Law, is defined generally to include any person, company or trust
that directly or indirectly owns, controls or holds with power to vote 10% or
more of the voting stock of each

                                       42

<PAGE>

of two or more banking institutions, including commercial banks and state
savings banks and savings and loan associations organized in stock form. In
general, a holding company controlling, directly or indirectly, only one banking
institution is not deemed to be a bank holding company for the purposes of the
New York State Banking Law. The prior approval of the NYSBD is required before
any action is taken that causes any company to become a bank holding company;
any bank holding company acquires direct or indirect ownership or control of
more than 5% of the voting stock of a banking institution; or acquires a banking
institution by merger or purchase of assets. Although the Company is not
currently a bank holding company for purposes of New York State law, any future
acquisition of ownership, control, or the power to vote 10% or more of the
voting stock of another banking institution or bank holding company would cause
it to become such.

Federal Securities Laws

     The Company's common stock is registered with the SEC under Section 12(g)
of the Securities Exchange Act of 1934, as amended (the Exchange Act).  The
Company is subject to the information, proxy solicitation, insider trading
restrictions and other requirements under the Exchange Act.

     The registration under the Securities Act of 1933, as amended (the
Securities Act), of shares of the common stock that were issued in the Bank's
conversion from mutual to stock form does not cover the resale of such shares.
Shares of the common stock purchased by persons who are not affiliates of the
Company may be resold without registration.  Shares purchased by an affiliate of
the Company will be subject to the resale restrictions of Rule 144 under the
Securities Act. If the Company meets the current public information requirements
of Rule 144 under the Securities Act, each affiliate of the Company who complies
with the other conditions of Rule 144 (including those that require the
affiliate's sale to be aggregated with those of certain other persons) would be
able to sell in the public market, without registration, a number of shares not
to exceed, in any three-month period, the greater of (i) 1% of the outstanding
shares of the Company or (ii) the average weekly volume of trading in such
shares during the preceding four calendar weeks. Provision may be made in the
future by the Company to permit affiliates to have their shares registered for
sale under the Securities Act under certain circumstances.

Year 2000 Compliance

     As of March 1, 2000, the Company has experienced no disruptions or problems
regarding the year 2000 (Y2K) rollover.  As part of the Company's Year 2000
plan, on January 1, 2000, the Company tested and sampled internal systems,
including its primary third-party data processor, telecommunications systems,
automated teller machines and related third party vendors supporting these
machines, various third party software applications and the company's ability to
interface with its correspondent banks, such as the Chase Manhattan Bank and the
Federal Reserve Bank.  All testing completed on January 1, 2000 indicated all
systems were operating as normal.  Through March 1, 2000, all of the Company's
internal hardware and software continue to operate as normal, and to date, to
the Company's knowledge, all vendors utilized by the Company in its daily
operations are operating normally and have not indicated any Y2K related
problems.

     The Company will continue to monitor and oversee all internal operations
and be in contact with its vendors regarding Y2K related issues.  Based on the
successful transition through the January, 2000 rollover period and the
previously conducted testing, the Company does not anticipate any significant
Y2K problems to arise.  None of the Company's major commercial borrowers
reported any Y2K related problems.

     The Company's expenditures for the Y2K effort total approximately $374,000
through December 31, 1999, including $314,000 for the fiscal 1999.

                                       43
<PAGE>

Recent Legislation

     Recent legislation designed to modernize the regulation of the financial
services industry expands the ability of bank holding companies to affiliate
with other types of financial services companies such as insurance companies and
investment banking companies.  However, the legislation provides that companies
that acquire control of a single savings association after May 4, 1999 (or that
filed an application for that purpose after that date) are not entitled to the
unrestricted activities formerly allowed for a unitary savings and loan holding
company.  Rather, these companies will have authority to engage in the
activities permitted "a financial holding company" under the new legislation,
including insurance and securities-related activities, and the activities
currently permitted for multiple savings and loan holding companies, but
generally not in commercial activities.  The authority for unrestricted
activities is grandfathered for unitary savings and loan holding companies, such
as the Company, that existed prior to May 4, 1999.  However, the authority for
unrestricted activities would not apply to any company that acquired the
Company.

                                       44
<PAGE>

FEDERAL AND STATE TAXATION

Federal Taxation

     General.  The Company, the Bank and their subsidiaries (excluding Roslyn
Capital Corporation) will report their income on a consolidated basis, using a
calendar year and the accrual method of accounting and will be subject to
Federal income taxation in the same manner as other corporations with some
exceptions, including particularly the Bank's treatment of its reserve for bad
debts discussed below.  The following discussion of tax matters is intended only
as a summary and does not purport to be a comprehensive description of the tax
rules applicable to the Bank or the Company.  The Bank was last audited by the
Internal Revenue Service for the year ended December 31, 1991 which resulted in
no change to taxable income.

     Bad Debt Reserves.  Prior to the enactment of The Small Business Job
Protection Act of 1996 (the 1996 Act) on August 20, 1996, for Federal income tax
purposes, thrift institutions which met certain definitional tests primarily
relating to their assets (the 60% Test) and the nature of their business, were
permitted to establish tax reserves for bad debts and to make annual additions
thereto, which additions could, within certain specified limitations, be
deducted in arriving at taxable income.  The Bank's deduction for bad debts with
respect to non-qualifying loans could be computed using an amount based on a six
year moving average of the Bank's actual loss experience (the Experience
Method).  The Bank's deduction with respect to "qualifying loans," which are
generally loans secured by certain interest in real property, could be computed
using the Experience Method or a percentage equal to 8% of the Bank's taxable
income (the PTI Method), computed with certain modifications and without regard
to this deduction and reduced by the amount of the permitted deduction for bad
debts on non-qualifying loans.  Additions to the tax bad debt reserve under the
PTI method were subject to an overall limitation.  The allowable deduction under
the PTI Method was limited to the excess of 12% of withdrawable accounts of
depositors at the end of the year over the sum of the Bank's surplus, undivided
profits and reserves at the beginning of the year.  Use of the PTI Method had
the effect of reducing the marginal rate of Federal tax on the Bank's income to
32.2%, exclusive of any minimum tax, as compared to the maximum corporate
Federal income tax rate of 35%.

     The 1996 Act.  Under the 1996 Act, for tax years beginning after December
31, 1995, the PTI Method was repealed.  Additionally, "large banks" (i.e., one
with assets having an adjusted basis of more than $500 million), which includes
the Bank, are no longer permitted to make additions to its tax bad debt reserve,
can only deduct bad debts as they occur and is required to recapture (i.e.,
include in its taxable income) over a six year period the excess of the balance
of its tax bad debt reserves as of December 31, 1995 over the balance of such
reserves as of December 31, 1987 (or a lesser amount if the Bank's loan
portfolio decreased since December 31, 1987).  For tax years beginning in 1996
and 1997, the recapture requirement is suspended if the principal amount of
residential mortgages originated by the Bank during the year was not less than
the average of the principal amount of loans made during the six preceding
taxable years.  As of December 31, 1995, the Bank's tax bad debt reserve was
equal to the balance of such reserve as of December 31, 1987.

     Distributions.  Under the 1996 Act, if the Bank makes "non-dividend
distributions" to the Company, such distributions will be considered to have
been made from the Bank's unrecaptured tax bad debt reserves (including the
balance of its reserves as of December 31, 1987) to the extent thereof, and an
amount based on the amount distributed (but not in excess of the amount of such
reserves) will be included in the Bank's income.  Non-dividend distributions
include distributions in excess of the Bank's current and accumulated earnings
and profits, as calculated for federal income tax purposes, distributions in
redemption of stock, and distributions in partial or complete liquidation.
Dividends paid out of the Bank's current or accumulated earnings and profits
will not be so included in the Bank's income.

                                      45
<PAGE>

     The amount of additional taxable income created from a non-dividend
distribution is an amount that, when reduced by the tax attributable to that
income, is equal to the amount of the distribution.  Thus, the Bank makes a non-
dividend distribution to the Company, approximately one and one-half times the
amount of such distribution (but not in excess of the amount of such reserves)
would be included in income for Federal income tax purposes, assuming a 35%
federal corporate income tax rate.  See "Regulation and Supervision" for limits
on the payment of dividends by the Bank.  The Bank does not intend to pay
dividends that would result in a recapture of any portion of its tax bad debt
reserves.

     Corporate Alternative Minimum Tax.  In addition to the regular income tax,
the Code imposes a alternative minimum tax (AMT) in an amount equal to 20% of
alternative minimum taxable income (AMTI) to the extent the AMT exceeds the
regular tax.  AMTI regular taxable income as modified by certain adjustments and
tax preference items.  AMTI includes an amount equal to 75% of the excess of
adjusted current earnings over AMTI (determined without regard to this
adjustment and prior to reduction for net operating losses).  Only 90% of AMTI
can be offset by net operating loss carry forwards.  The AMT is available as a
credit against future regular income tax.  The AMT credit can be carried forward
indefinitely.  The Bank does not expect to be subject to the AMT.

     Dividends Received Deduction and Other Matters.  The Company may exclude
from its income 100% of dividends received from the Bank as a member of the same
affiliated group of corporations.  A 70% dividends received deduction generally
applies with respect to dividends received from corporations that are not
members such affiliated group, except that an 80% dividends received deduction
applies if the Company and the Bank own more than 20% of the stock of a
corporation distributing a dividend.

State and Local Taxation

     New York State Taxation.  The Bank is subject to the New York State
Franchise Tax on Banking Corporations in an annual amount equal to the greater
of (a) 9% of the Bank's "entire net income" allocable to New York State during
the taxable year, or (b) the applicable AMT. The AMT is generally the greatest
of (a) .01% of the value of the taxable assets allocable to New York State with
certain modifications, (b) 3% of the Bank's "alternative entire net income"
allocable to New York State or (c) $250. Entire net income is similar to federal
taxable income, subject to certain modifications (including that net operating
losses cannot be carried back or carried forward) and alternative entire net
income is equal to entire net income without certain adjustments. The Bank, the
Company and their subsidiaries (excluding Roslyn Capital Corporation, Roosevelt
Asset Funding Corp. and RNMC Re, Inc.) file a combined return.

     The New York State tax law was amended in 1999 to reduce the tax rate on
allocated entire net income.  For tax years beginning after June 30, 2000 and
before July 1, 2001, the tax rate is 8.5%; for tax years beginning after June
30, 2001 and before July 1, 2002, the tax rate is 8%; and tax years beginning
after June 30, 2002, the tax rate is 7.5%.

     The Company, the Bank and their subsidiaries do business within the
Metropolitan Transportation Business Tax District (the District) which is
comprised of the counties of New York, Bronx, Kings, Queens, Richmond, Dutchess,
Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester.  A tax surcharge is
imposed on banking corporations doing business within the District and has been
applied since 1982.  This district tax rate is 17%.

     The District tax surcharge is scheduled to expire for tax years ending on
or after December 31, 2001.  In prior years, the District tax surcharge has been
extended before its expiration date.

     The reduction in the tax rate on allocated entire net income enacted in
1999 will not be reflected in the computation of the District tax surcharge.
The surcharge is to be computed as if the tax rate reductions had not occurred.

                                      46
<PAGE>

     The Bank was last audited by the State of New York for the three-year
period ended December 31, 1995, which resulted in adjustments which were
immaterial to the Bank's financial statements.

     Bad Debt Reserves: For purposes of computing its New York State entire net
income, the Bank is permitted a deduction for an addition to the reserve for
losses on qualifying real property loans. The allowable deduction is the same as
for federal income tax purposes, prior to the 1996 Act, except that the
percentage allowable under the PTI Method was 32% instead of 8%.  The New York
State tax law was amended in August 1996 to prevent the recapture of tax bad
debt reserves that would otherwise occur as a result of the enactment of the
1996 Act.  However, the New York bad debt reserve is subject to recapture for
"non-dividend distributions" in a manner similar to the recapture of the federal
tax bad debt reserves for such distributions.  Also, the New York tax bad debt
reserve is subject to recapture in the event that the Bank fails to meet the 60%
Test, which it presently satisfies.  Although there can be no assurance that the
Bank will satisfy the 60% Test in the future, management believes that this
level of qualifying assets can be maintained by the Bank.  Each year the Bank
reviews the most favorable method to calculate the deduction attributable to an
addition to the tax bad debt reserve.

     City of New York Taxation:  The Bank, the Company and its subsidiaries
(excluding Roslyn Capital Corporation, Roosevelt Asset Funding Corporation and
RNMC Re, Inc.) are also subject to a New York City banking corporation tax of 9%
on income allocated to New York City calculated in a manner similar to New York
State. Income is allocated to New York City based upon three factors: receipts,
wages and deposits.

     In March 1997, the New York City tax law was amended, similar to New York
State, to prevent the recapture of the tax bad debt reserve that would have
otherwise occurred as a result of the enactment of the 1996 Act.

     Delaware Taxation:  The Company, as a Delaware holding company not earning
income in Delaware, is exempted from the corporate income tax.  However, the
Company is required to file an annual report with and pay an annual franchise
tax based on authorized shares to the State of Delaware.

     Roslyn National Mortgage Corporation:  RNMC is subject to tax in the
various states in which it operates.  RNMC is also subject to tax in New York
City.

     RNMC Re, Inc.:  RNMC Re, Inc. is subject to tax on its premium income in
Vermont.

                                       47
<PAGE>

               EXECUTIVE OFFICERS OF THE REGISTRANT AND THE BANK

     The name, age, position, term of office as officer and period during which
he or she has served as an officer is provided below for each executive officer
of the Registrant and the Bank.  All executive officers of the Registrant are
also executive officers of the Bank.

     Joseph L. Mancino, Vice Chairman of the Board, President and Chief
Executive Officer and a Director of the Registrant, Chairman of the Board and
Chief Executive Officer of the Bank, joined the Bank in 1960, and has been
Chairman of the Board and Chief Executive Officer of the Bank since 1993 and of
the Registrant in 1997.  Mr. Mancino was President of the Bank from 1993 until
February 2000. In connection with the Registrant's acquisition of T R
Financial Corp. in 1999, Mr. Mancino became Vice Chairman of the Registrant.
Mr. Mancino is 62 years of age.

     John M. Tsimbinos, Chairman of the Board of the Registrant and Vice
Chairman of the Board of the Bank, joined the Bank in 1999 in connection with
the Registrant's acquisition of T R Financial Corp.  Mr. Tsimbinos is 62 years
of age.

     John R. Bransfield, Jr., Vice Chairman of the Registrant commencing in
February 2000, President and Chief Operating Officer of the Bank commencing in
February 2000, joined the Bank in 1993 as a Senior Vice President and Senior
Lending Officer, became a Director in 1998, and became Senior Executive Vice
President and Chief Operating Officer in 1999.  Mr. Bransfield is 58 years of
age.

     Nancy C. MacKenzie, Executive Vice President and Chief Information Officer
of the Bank, joined the Bank in 1976, became Chief Information Officer in 1995,
and became Executive Vice President and Chief Information Officer in 1999.
Ms. MacKenzie is 46 years of age.

     Daniel L. Murphy, Executive Vice President and Retail Banking Officer of
the Bank, joined the Bank in 1978, and became Executive Vice President and
Retail Banking Officer in 1999.  Mr. Murphy is 40 years of age.

     Michael P. Puorro, Treasurer and Chief Financial Officer of the Registrant
and Executive Vice President and Chief Financial Officer of the Bank, joined the
Bank in 1992 and became Executive Vice President and Chief Financial Officer in
1999. Mr. Puorro is 40 years of age.

     John L. Klag, Executive Vice President and Investment Officer of the Bank,
joined the Bank in 1993 and became Executive Vice President and Investment
Officer in 1999.  Mr. Klag is 42 years of age.

     R. Patrick Quinn, Corporate Secretary of the Registrant, joined the Bank in
1999 as Corporate Secretary. Mr. Quinn is 38 years of age.

     Kevin T. Dunne, Senior Vice President and Senior Consumer Lending Officer
of the Bank, joined the Bank in 1974 and became Senior Vice President and Senior
Consumer Lending Officer in 1999.  Mr. Dunne is 44 years of age.

     Ralph E. Caccipuoti, Senior Vice President and Retail Operations Officer of
the Bank, joined the Bank in 1975 and became Senior Vice President and Retail
Operations Officer in 1999.  Mr. Caccipuoti is 44 years of age.

     Mary Ellen McKinley, Senior Vice President and Human Resources Officer of
the Bank, joined the Bank in 1994 and became Senior Vice President and Human
Resources Officer in 2000. Ms. McKinley is 54 years of age.

     John F. Coffey, Senior Vice President and Senior Commercial Lending Officer
of the Bank, joined the Bank in 1996, and became Senior Vice President and
Commercial Lending Officer in 1999.  Mr. Coffey is 53 years of age.

                                       48

<PAGE>

     William A. Walter, Senior Vice President and Assistant Chief Financial
Officer of the Bank, joined the Bank in 1996, and became Senior Vice President
and Assistant Chief Financial Officer in 1999.  Mr. Walter is 35 years of age.

     Walter G. Mullins, Senior Vice President and Marketing Officer of the Bank,
joined the Bank in 1999 in connection with the Registrant's acquisition of T R
Financial Corp. Mr. Mullins is 54 years of age.

     Gerard L. Treglia, Senior Vice President and Retail Systems Officer of the
Bank joined the Bank in 1999 in connection with the Registrant's acquisition of
T R Financial Corp.  Mr. Treglia is 50 years of age.



                                       49
<PAGE>

Item 2. Properties.
-------------------

     The Bank currently conducts its business through 25 full service banking
offices. In addition, RNMC, the Bank's mortgage banking subsidiary, conducts its
business through the Bank's banking offices as well as eleven mortgage
origination offices.  The following table sets forth the Bank's and RNMC's
offices as of December 31, 1999:

<TABLE>
<CAPTION>
                                                         Original
                                        Leased             Year
                                          or            Leased or         Date of Lease
Location                                 Owned           Acquired          Expiration
--------------------------------     ------------     -------------     -----------------
<S>                                  <C>              <C>               <C>
Administrative/Main Office:

Roslyn Office                            Owned             1932          Not Applicable
1400 Old Northern Boulevard
Roslyn, NY  11576

Administrative Offices:

Garden City Office                       Owned             1976          Not Applicable
1122 Franklin Avenue
Garden City, New 11530

Jericho Office                          Leased             1999                2014
One Jericho Plaza
Jericho, NY  11753

Branch Offices:

Bayshore                                Leased             1999                2009
130-145 East Main Street
Bayshore, NY  11706

Bayside (1)                              Owned             1969          Not Applicable
224-04 Union Turnpike
Bayside, NY  11364

Bellmore                                 Owned             1972          Not Applicable
2641 Merrick Road
Bellmore, NY  11710

2790 Sunrise Highway (1)                Leased             1980                2010
Bellmore, NY  11710

Bellerose (1)                            Owned             1975          Not Applicable
247-53 Jamaica Avenue
Bellerose, NY  11426

Brooklyn (1)                             Owned             1920          Not Applicable
1024 Gates Avenue
Brooklyn, NY  11221

2925 Avenue U (1)                        Owned             1955          Not Applicable
Brooklyn, NY  11229
</TABLE>

                                       50
<PAGE>

<TABLE>
<CAPTION>
                                                         Original
                                        Leased             Year
                                          or            Leased or         Date of Lease
Location                                 Owned           Acquired          Expiration
--------------------------------     ------------     -------------     -----------------
<S>                                  <C>              <C>               <C>
Dix Hills (1)                           Leased             1995                2002
699 Old Country Road
Dix Hills, NY  11746

East Northport                           Owned             1992          Not Applicable
580 Larkfield Road
East Northport, NY  11731

Farmingdale                              Owned             1968          Not Applicable
14 Conklin Street
Farmingdale, NY 11735

Garden City (1)                          Owned             1976          Not Applicable
1122 Franklin Avenue
Garden City, NY  11530

108-110 Seventh Street (1)              Leased             1995                2025
Garden City, NY  11530

Hewlett (1)                              Owned             1996          Not Applicable
1280 Broadway
Hewlett, NY  11557

Howard Beach (1) (2)                     Owned             1965          Not Applicable
156-02 Cross Bay Boulevard
Howard Beach, NY  11414

Lawrence                                Leased             1996                2003
333 Central Avenue
Lawrence, NY  11559

Little Neck (1)                         Leased             1971                2017
254-09 Horace Harding Expressway
Little Neck, NY  11362

Massapequa (3)                          Leased             1996                2004
6199 Sunrise Highway                    /Owned
Massapequa, NY  11758

Massapequa Park (1)                      Owned             1961          Not Applicable
4848 Merrick Road
Massapequa Park, NY  11762

New Hyde Park (1)                        Owned             1975          Not Applicable
1114 Jericho Turnpike
New Hyde Park, NY  11040

North Babylon (1)                        Owned             1991          Not Applicable
1501 Deer Park Avenue
North Babylon, NY  11703
</TABLE>

                                       51
<PAGE>

<TABLE>
<CAPTION>
                                                         Original
                                        Leased             Year
                                          or            Leased or         Date of Lease
Location                                 Owned           Acquired          Expiration
--------------------------------     ------------     -------------     -----------------
<S>                                  <C>              <C>               <C>
Oceanside                                Owned             1998          Not Applicable
3140 Long Beach Road
Oceanside, NY  11572

Smithtown                               Leased             1998                2008
719 Smithtown Bypass
Smithtown, NY  11787

West Hempstead                           Owned             1965          Not Applicable
50 Hempstead Turnpike
West Hempstead, NY  11552

Woodbury (4)                            Leased             1976                2009
8081 Jericho Turnpike
Woodbury, NY 11797
</TABLE>

                                       52
<PAGE>

<TABLE>
<CAPTION>
                                                         Original
                                        Leased             Year
                                          or            Leased or         Date of Lease
Location                                 Owned           Acquired          Expiration
--------------------------------     ------------     -------------     -----------------
<S>                                  <C>              <C>               <C>
RNMC Origination Offices:

Melville - Main Office                   Leased            1999                2010
48 South Service Road
Melville, NY  11747

Birmingham                               Leased            1999                2000
1 Perimeter Park South
Suite 100N
Birmingham, AL  35243

Brentwood                                Leased            1999                2004
5115 Maryland Way
Brentwood, TN  37027

Cherry Hill                              Leased            1998           Month-to-month
Executive Quarters
1930 E. Marlton Pike
Suite Q26
Cherry Hill, NJ  08003

Columbia                                 Leased            1999                2004
6996 Columbia Gateway Drive
Suite 102
Columbia, MD  21045

Parsippany                               Leased            1998                2003
400 Lanidex Plaza
Suite 4203
Parsippany, NJ  07054

Patchogue                                Leased            1998            Month-to-month
57 E. Main Street
Patchogue, NY  11772

Richboro                                 Leased            1998                2000
130 Almshouse Road
Suite 200A
Richboro, PA  18954
</TABLE>

                                       53
<PAGE>

<TABLE>
<CAPTION>
                                                         Original
                                        Leased             Year
                                          or            Leased or         Date of Lease
Location                                 Owned           Acquired          Expiration
--------------------------------     ------------     -------------     -----------------
<S>                                  <C>              <C>               <C>
Vienna                                  Leased             1999                2004
1604 Springhill Road
Suite 110
Vienna, VA  22182

Whitestone                              Leased             1998                2003
17-20 Whitestone
 Expressway
Suite 400
Whitestone, NY  11357

Wilmington                              Leased             1998                2002
5301 Limestone Road
Suite 104
Wilmington, DE  19808
</TABLE>

------------------------------
(1)  The Bank acquired these former offices of Roosevelt Savings Bank on
     February 16, 1999.
(2)  Includes a leased accommodation facility adjacent to the branch office.
     The lease on such facility expires December 2011.
(3)  The Bank owns the building but leases the minority portion of the land. The
     Bank has the option to renew the lease upon expiration for two (2)
     additional consecutive terms of thirty-three (33) years each.
(4)  The Bank owns the building but leases the majority portion of the land. The
     Bank has the option to renew the lease upon expiration for two (2)
     additional consecutive terms of twenty (20) years each.

                                       54
<PAGE>

Item 3.  Legal Proceedings.
---------------------------

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

                                    PART II

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

     None.

Item 5.  Market for the Company's Common Equity and Related Stockholder Matters.
--------------------------------------------------------------------------------

     Information regarding the market for the Company's common equity and
related stockholder matters appears in the 1999 Annual Report under the caption
"Market Price of Common Stock" and is incorporated herein by this reference. The
following schedule summarizes the dividend payment ratio (dividends declared/net
income per share) for the periods indicated:


<TABLE>
<CAPTION>
                        For the Year Ended December 31,
--------------------------------------------------------------------------------
        1999                       1998                        1997
--------------------         ------------------        ----------------------
<S>                           <C>                      <C>
      190.74%                     58.91%                      51.12%
</TABLE>


Item 6.  Selected Financial Data.
---------------------------------

     Information regarding selected financial data appears on page 1 of the
1999 Annual Report under the caption "Selected Consolidated Financial and Other
Data of the Company" and is incorporated herein by this reference.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations.
--------------

     Information regarding management's discussion and analysis of financial
condition and results of operations appears on pages 12 through 26 of the 1999
Annual Report under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and is incorporated herein by
this reference.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
--------------------------------------------------------------------

     The information contained in the section captioned "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Management of
Interest Rate Risk and Gap Analysis" in the 1999 Annual Report is incorporated
herein by this reference.

Item 8.  Financial Statements and Supplementary Data.
-----------------------------------------------------

      Information regarding the financial statements and the Independent
Auditors' Report appears on pages 27 through 66 of the 1999 Annual Report and is
incorporated herein by this reference.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
------------------------------------------------------------------------
Financial Disclosure.
---------------------

      None.

                                       55
<PAGE>

                                    PART III

Item 10. Directors and Executive Officers of the Company.
---------------------------------------------------------

      Information regarding the Directors and executive officers of the Company
is incorporated herein by reference to the Company's Proxy Statement for the
Annual Meeting of Stockholders to be held on May 24, 2000 under the caption
"Information with Respect to the Nominees, Continuing Directors, and Certain
Executive Officers of the Company," and to pages 47 and 48 herein.  Pursuant to
General Instruction G(3) to the Form 10-K, the Company's Proxy Statement for the
Annual Meeting of Stockholders to be held on May 24, 2000 will be filed with the
Securities and Exchange Commission not later than 120 days after the end of the
fiscal year covered by this Form 10-K.

Item 11. Executive Compensation.
--------------------------------

      Information regarding executive compensation is incorporated herein by
reference to the Company's Proxy Statement for the Annual Meeting of
Stockholders to be held on May 24, 2000 under the caption "Executive
Compensation", not including the report of the personnel committee and the stock
performance graph. Pursuant to General Instruction G(3) to the Form 10-K, the
Company's Proxy Statement for the Annual Meeting of the Stockholders to be held
on May 24, 2000 will be filed with the Securities and Exchange Commission not
later than 120 days after the end of the fiscal year covered by this Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management.
------------------------------------------------------------------------

     The company knows of no single person or group that is the beneficial owner
of more than 5% of the Company's common stock.

     Information regarding security ownership of management is incorporated
herein by reference to the Company's Proxy Statement for the Annual Meeting of
Stockholders to be held on May 24, 2000 under the caption "Information with
Respect to the Nominees, Continuing Directors and Named Executive Officers of
the Company." Pursuant to General Instructions G(3) to the Form 10-K, the
Company's Proxy Statement for the Annual Meeting of Stockholders to be held on
May 24, 2000 will be filed with the Securities and Exchange Commission not later
than 120 days after the end of the fiscal year covered by this Form 10-K.

Item 13. Certain Relationships and Related Transactions.
--------------------------------------------------------

     Information regarding certain relationships and related transactions is
incorporated herein by reference to the company's Proxy Statement for the Annual
Meeting of Stockholders to be held on May 24, 2000 under the caption
"Transactions With Certain Related Persons." Pursuant to General Instruction
G(3) to the Form 10-K, the Company's Proxy Statement for the Annual Meeting of
Stockholders to be held on May 24, 2000 will be filed with the Securities and
Exchange Commission not later than 120 days after the end of the fiscal year
covered by this Form 10-K.

                                    PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
--------------------------------------------------------------------------

   1.  Financial Statements

       The following consolidated financial statements are included in the
       Company's Annual Report for the fiscal year ended December 31, 1999 and
       are incorporated herein by reference:

       -  Consolidated Statements of Financial Condition as of December 31, 1999
          and 1998

                                       56


<PAGE>

       -  Consolidated Statements of Income for the Years Ended December 31,
          1999, 1998 and 1997

       -  Consolidated Statements of Changes in Stockholders' Equity for the
          Years Ended December 31, 1999, 1998 and 1997

       -  Consolidated Statements of Cash Flows for the Years Ended December 31,
          1999, 1998 and 1997

       -  Notes to Consolidated Financial Statements

       -  Independent Auditors' Report

       -  Selected Quarterly Financial Data (Unaudited) for the Years Ended
          December 31, 1999 and 1998

       The remaining information appearing in the Annual Report is not deemed to
       be filed as part of this report, except as expressly provided herein.

(a) 2. Financial Statement Schedules

       Financial Statement Schedules have been omitted because they are not
       applicable or the required information is shown in the Consolidated
       Financial Statements or Notes thereto.

(b) Reports on Form 8-K filed during the last quarter of 1999

       None.

(c) Exhibits Required by Securities and Exchange Commission Regulation S-K

Exhibit
Number
------

2.1    Agreement and Plan of Merger, dated as of May 25, 1998, by and between
       Roslyn Bancorp, Inc. and T R Financial Corp./1/
2.2    First Amendment, dated as of January 23, 1999, to the Agreement and Plan
       of Merger, dated as of May 25, 1998, by and between Roslyn Bancorp, Inc.
       And T R Financial Corp./2/
3.1    Certificate of Incorporation of Roslyn Bancorp, Inc./3/
3.2    Certificate of Amendment to Certificate of Incorporation of Roslyn
       Bancorp, Inc./4/
3.3    Second Amended and Restated Bylaws of Roslyn Bancorp, Inc./5/
4.0    Form of Stock Certificate of Roslyn Bancorp, Inc./3/
10.1   Employment Agreement between Roslyn Bancorp, Inc. and Joseph L.
       Mancino/6/
10.2   Employment Agreement between Roslyn Savings Bank and Joseph L. Mancino/6/
10.3   Employment Agreement between Roslyn Bancorp, Inc. and John R. Bransfield,
       Jr./6/
10.4   Employment Agreement between Roslyn Savings Bank and John R. Bransfield,
       Jr./6/
10.5   Employment Agreement between Roslyn Bancorp, Inc. and Michael P.
       Puorro/6/
10.6   Employment Agreement between Roslyn Savings Bank and Michael P.
       Puorro/6/
10.7   Employment Agreement between Roslyn Savings Bank and John L. Klag/6/
10.8   Employment Agreement between Roslyn Savings Bank and Nancy MacKenzie/6/
10.9   Employment Agreement between Roslyn Savings Bank and Daniel L.
       Murphy/6/
10.10  Employment Agreement between Roslyn Bancorp, Inc. and R. Patrick
       Quinn/6/
10.11  Employment Agreement between Roslyn Savings Bank and R. Patrick
       Quinn/6/
10.12  Employment Agreement between Roslyn Bancorp, Inc. and John M.
       Tsimbinos/6/
10.13  The Roslyn Savings Bank Management Supplemental Retirement Plan/4/
10.14  Roslyn Bancorp, Inc. 1997 Stock-Based Incentive Plan/5/
10.15  Employment Agreement between Roslyn Savings Bank and John M.
       Tsimbinos/4/

                                       57
<PAGE>

10.16  Supplemental Executive Retirement Plan of Roosevelt Savings Bank, as
       amended and restated as of March 16, 1993./7/
10.17  First Amendment to the Supplemental Executive Retirement Plan of
       Roosevelt Savings Bank, as amended and restated./8/
10.18  T R Financial Corp. 1993 Incentive Stock Option Plan, amended and
       restated as of January 23, 1997./9/
11.0   Statement re: Computation of per Share Earnings (incorporated by
       reference to Note 17 to Notes to Consolidated Statements - Part IV, Item
       14).
13.0   1999 Annual Report
21.0   Subsidiary information is incorporated by reference to "Part I -
       Subsidiary Activities"
23.0   Consent of KPMG LLP
27.0   Financial Data Schedule (EDGAR version only)

1.   Incorporated by reference into this document from the Registration
     Statement on Form S-4, and any amendments thereto, Registration No. 333-
     67369, filed with the Securities and Exchange Commission on November 16,
     1998.

2.   Incorporated by reference into this document from the Form 8-K, and any
     amendments thereto, Commission File No. 0-28886, filed with the Securities
     and Exchange Commission on February 18, 1999.

3.   Incorporated by reference into this document from the Exhibits filed with
     the Registration Statement on Form S-1, and any amendments thereto,
     Registration Statement No. 333-10471, filed with the Securities and
     Exchange Commission on August 20, 1996.

4.   Incorporated by reference into this document from the Exhibits to the
     Company's quarterly report on Form 10-Q, Commission File No. 0-28886, filed
     with the Securities and Exchange Commission on August 13, 1999.

5.   Incorporated by reference into this document from the Exhibits to the
     Company's quarterly report on Form 10-Q, Commission File No. 0-28886, filed
     with the Securities and Exchange Commission on November 12, 1999.

6.   Incorporated by reference into this document from the Exhibits filed with
     the Form 10-K and any amendments thereto, Commission File No. 0-28886,
     filed with the Securities and Exchange Commission on March 31, 1999.

7.   Incorporated by reference into this document from the Appendix to the Proxy
     Statement for the Annual Meeting of Shareholders held on July 22, 1997,
     filed with the Securities and Exchange Commission on June 6, 1997.

8.   Incorporated by reference into this document from the Exhibits to T R
     Financial Corp.'s Annual Report on Form 10-K for fiscal year 1993,
     Commission File No. 0-21386, filed with the Securities and Exchange
     Commission on March 30, 1994.

9.   Incorporated by reference into this document from the Exhibits to T R
     Financial Corp.'s Annual Report on Form 10-K for fiscal year 1995,
     Commission File No. 0-21386,. Filed with the Securities and Exchange
     Commission on March 27, 1996 and as amended as of March 29, 1996.

10.  Incorporated by reference to the Exhibits to T R Financial Corp.'s
     definitive Proxy Statement for its 1997 Annual Meeting of stockholders,
     Commission File No. 0-21386, filed with the Securities and Exchange
     Commission on March 19, 1997.

                                      58
<PAGE>

                                   SIGNATURES




     Pursuant to the requirements of Section 13 or 15(d) 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.

                             Roslyn Bancorp, Inc.
                    ------------------------------------------
                                 (Registrant)

                    /s/ Joseph L. Mancino                        March 30, 2000
                    ------------------------------------------   --------------
                    Joseph L. Mancino, Vice Chairman of the
                    Board, President & Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:

NAME                         TITLE                                DATE
----                         -----                                -----

/s/ Joseph L. Mancino        Vice Chairman of the Board,          March 30, 2000
---------------------        President,& Chief Executive Officer  --------------
    Joseph L. Mancino


/s/ John M. Tsimbinos        Chairman of the Board                March 30, 2000
---------------------                                             --------------
    John M. Tsimbinos


/s/ John R. Bransfield       Vice Chairman of the Board           March 30, 2000
----------------------                                            --------------
    John R. Bransfield


/s/ Michael P. Puorro        Treasurer & Chief Financial Officer  March 30, 2000
---------------------                                             --------------
    Michael P. Puorro


/s/ A. Gordon Nutt           Director                             March 30, 2000
-------------------                                               --------------
    A. Gordon Nutt


/s/ Thomas J. Calabrese, Jr. Director                             March 30, 2000
----------------------------                                      --------------
    Thomas J. Calabrese, Jr.


/s/ Maureen E. Clancy        Director                             March 30, 2000
---------------------                                             --------------
    Maureen E. Clancy


/s/ Thomas A. Doherty        Director                             March 30, 2000
---------------------                                             --------------
    Thomas A. Doherty


/s/ Robert G. Freese         Director                             March 30, 2000
--------------------                                              --------------
    Robert G. Freese


/s/ Leonard Genovese         Director                             March 30, 2000
--------------------                                              --------------
    Leonard Genovese

                                       59
<PAGE>

                             SIGNATURES (Continued)


NAME                                TITLE                   DATE
----                                -----                   -----


/s/ Dr. Edwin W. Martin, Jr.        Director                March 30, 2000
----------------------------                                --------------
    Dr. Edwin W. Martin, Jr.


/s/ Victor C. McCuaig               Director                March 30, 2000
---------------------                                       --------------
    Victor C. McCuaig


/s/ James E. Swiggett               Director                March 30, 2000
---------------------                                       --------------
    James E. Swiggett


/s/ Spiros J. Voutsinas             Director                March 30, 2000
-----------------------                                     --------------
    Spiros J. Voutsinas


/s/ Richard C. Webel                Director                March 30, 2000
--------------------                                        --------------
    Richard C. Webel

                                       60