<PAGE>   1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

  X      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
-----
         EXCHANGE ACT TO 1934

For the quarterly period ended September 30, 1998

                                       OR

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

For the transition period from _____________ to _______________

Commission file number 1-6868

                              SIENA HOLDINGS, INC.

             (Exact name of registrant as specified in its charter)

           Delaware                                            75-1043392
 ------------------------------                              ---------------
(State or other jurisdiction of                             (I.R.S. employer
 incorporation or organization)                            identification no.)

  5068 West Plano Parkway,  Suite 345,  Plano, Texas               75093
  --------------------------------------------------               -----
       (Address of principal executive offices)                  (Zip code)

                                 (972) 381-4255
               --------------------------------------------------
              (Registrant's telephone number, including area code)

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
                                        ---     ---

          APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                        DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                                    YES  X  NO
                                        ---     ---

On October 10, 1995, the Registrant and certain of its subsidiaries filed
bankruptcy proceedings under Chapter 11 of the Federal Bankruptcy Code in the
District of Delaware.

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares outstanding of each of the issuer's classes of common stock
as of November 6, 1998: Common Stock, $.10 par value -- 6,000,000 shares.

<PAGE>   2

                      SIENA HOLDINGS, INC. AND SUBSIDIARIES


               FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998

                                      INDEX

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>      <C>                                                                <C>
                         PART I -- FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

         Consolidated Balance Sheets - September 30, 1998 and 
         June 30, 1998......................................................  2
         Statements of Consolidated Operations-Quarters Ended 
         September 30,  1998 and 1997.......................................  3
         Statements of Consolidated Cash Flows - Quarters Ended 
         September  30,  1998 and 1997......................................  4
         Notes to Consolidated Financial Statements.........................  5

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

         Results of Operations..............................................  9
         Liquidity and Capital Resources.................................... 11

                          PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings.................................................. 12

Item 3.  Defaults Upon Senior Securities.................................... 12

Item 6.  Exhibits and Reports on Form 8-K................................... 12
</TABLE>



                                       1
<PAGE>   3
                         PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                           CONSOLIDATED BALANCE SHEETS

                      SIENA HOLDINGS, INC. AND SUBSIDIARIES
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                September 30, 1998   June 30, 1998
                                                                ------------------   -------------
<S>                                                                 <C>              <C>
ASSETS

Current Assets:
   Cash and cash equivalents ......................................   $ 2,351             $ 2,475 
   Receivables ....................................................       187                 119 
   Prepaid expenses ...............................................        13                  54 
                                                                      -------             ------- 
                                                                        2,551               2,648 
                                                                      -------             ------- 
Long Term Investments:                                                                            
   Investment in real estate ......................................     4,803               4,800 
                                                                      -------             ------- 
                                                                      $ 7,354             $ 7,448 
                                                                      =======             ======= 

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable and accrued expenses ..........................   $   565             $   594 
Long Term Liabilities:                                                                            
   Accrued medical insurance premiums .............................       696                 711 
                                                                      -------             ------- 
                                                                        1,261               1,305 
                                                                      -------             ------- 
Stockholders' equity:                                                                             
   Preferred  stock -- $1.00 par value, 1,000 shares authorized,                                  
     0 shares issued and outstanding) .............................        --                  -- 
   Common stock--($.10 par value, 15,000 shares authorized, 4,000                                 
     shares issued and outstanding) ...............................       400                 400 
   Other paid-in capital ..........................................     5,786               5,782 
   Accumulated deficit ............................................       (93)                (39)
                                                                      -------             ------- 
                                                                        6,093               6,143 
                                                                      -------             ------- 
                                                                      $ 7,354             $ 7,448 
                                                                      =======             ======= 
</TABLE>

See notes to consolidated financial statements.


                                       2
<PAGE>   4
                STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)

                      SIENA HOLDINGS, INC. AND SUBSIDIARIES
          (IN THOUSANDS, EXCEPT NET EARNINGS (LOSS) PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                          Quarter Ended  Quarter Ended
                                                          September 30,   September 30,
                                                               1998          1997
                                                          -------------  --------------
<S>                                                        <C>            <C>
Revenues:
 Commissions and fees ....................................  $   131           $  151 
 Interest ................................................       33               23 
 Trust expense reimbursement .............................       87               20 
 Other ...................................................        8               47 
                                                            -------           ------ 
                                                                259              241 
                                                            -------           ------ 
Expenses:
 Personnel ...............................................      110               74 
 Other operating .........................................      203               98 
                                                            -------           ------ 
                                                                313              172 
                                                            -------           ------ 
Income (loss) from operations before federal income tax...      (54)              69 
Federal income tax expense ...............................       --              (24)
                                                            -------           ------ 
Net income (loss) ........................................  $   (54)          $   45 
                                                            =======           ====== 

Basic earnings (loss) per share:
 Net income (loss) .......................................  $ (0.01)*       $ 0.01 * 
                                                                                     
Average number of shares .................................    4,000 *        4,000 * 
                                                                                     
Diluted earnings (loss) per share:                                                   
 Net income (loss) .......................................  $ (0.01)*       $ 0.01 *
                                                                                     
Average number of shares .................................    4,066 *        4,000 * 
</TABLE>

* Per share amounts are based on shares issued or reserved for issuance to
creditors.

See notes to consolidated financial statements.


                                       3
<PAGE>   5
                STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)

                      SIENA HOLDINGS, INC. AND SUBSIDIARIES
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                              Quarter Ended       Quarter Ended
                                                                               September 30,       September 30,
                                                                                  1998                 1997
                                                                              -------------        -------------
<S>                                                                            <C>                   <C>
Operating activities:                                                                                          
     Net income (loss) ....................................................     $   (54)              $    45  
     Adjustments to reconcile net income (loss) to net cash provided                                           
     (used) by operating activities:                                                                           
        Compensation expense for stock options ............................           4                    --  
        Federal income tax expense charged to other paid-in capital due              --                    24  
          to the utilization of pre-reorganization tax attributes                                              
     Increase in receivables and prepaid expenses .........................         (27)                  (34) 
     Decrease in current accounts payable and accrued expenses ............         (29)                  (19) 
     Decrease in long term accrued medical insurance premiums .............         (15)                  (16) 
                                                                                -------               -------  
                   Net cash provided (used) by operating activities .......        (121)                   --  
                                                                                -------               -------  
Operating activities:                                                                                          
     Increase in investment in real estate ................................          (3)                   --  
                                                                                -------               -------  
                                                                                     (3)                   --  
                                                                                -------               -------  
Net increase (decrease) in cash and cash equivalents ......................        (124)                   --  
Cash and cash equivalents at beginning of period ..........................       2,475                 1,941  
                                                                                -------               -------  
Cash and cash equivalents at end of period ................................     $ 2,351               $ 1,941  
                                                                                =======               =======  
                                                                                                               
Cash payments for:                                                                                             
     Interest .............................................................     $    --               $    --  
     Federal income tax ...................................................     $    --               $    --  
                                                                                                               
Non-cash transactions:                                                                                         
     Issuance of stock options ............................................     $     4               $    --  
</TABLE>

See notes to consolidated financial statements.


                                       4
<PAGE>   6
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                      SIENA HOLDINGS, INC. AND SUBSIDIARIES

                               SEPTEMBER 30, 1998


NOTE A -- BASIS OF FINANCIAL STATEMENT PRESENTATION

         The accompanying unaudited consolidated financial statements include 
the accounts of Siena Holdings, Inc. ("SHI"), formerly Lomas Financial
Corporation ("LFC"), and its subsidiaries (collectively, the "Company"). SHI's
wholly-owned, principal subsidiaries are Siena Housing Management Corp. and LLG
Lands, Inc. Prior to October 1, 1996, SHI's wholly-owned principal subsidiary
was Lomas Mortgage USA, Inc. ("LMUSA"), now known as Nomas Corp. As a result of
the confirmation of LMUSA's Chapter 11 reorganization plan (see "Note B -
Reorganization"), the Company's interest in LMUSA was extinguished effective
October 1, 1996. LFC's plan of reorganization was confirmed on October 4, 1996,
but not effective until March 1997.

         In accordance with the American Institute of Certified Public 
Accountants' Statement of Position 90-7, "Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code", the Company adopted fresh-start
accounting as of April 1, 1997, after all material conditions required by the
Plan were satisfied. The delay in the adoption of fresh-start accounting was due
to uncertainties surrounding the resolution of claims and intercompany disputes
between the LMUSA Creditors' Committee and the LFC Creditors' Committee. Since
April 1, 1997, the Company's financial statements have been prepared as if it is
a new reporting entity. Under fresh-start accounting, all assets and liabilities
were restated to reflect their reorganization value, which approximated fair
value at the date of reorganization. See "Item 8. Financial Statements and
Supplementary Data" in the Company's annual report on Form 10-K for the year
ended June 30, 1998 for more details on fresh-start reporting.

         The financial statements have been prepared in accordance with 
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from those estimates. Certain reclassifications have been made to
prior quarters financial statements to conform to the current presentation.
Operating results for the quarter are not necessarily indicative of the results
that may be expected for the fiscal year. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended June 30, 1998. 

NOTE B -- REORGANIZATION

         On October 10, 1995, LFC, two subsidiaries of LFC and LMUSA 
(collectively the "Debtor Corporations") filed separate voluntary petitions for
reorganization under Chapter 11 of the Federal Bankruptcy Code in the District
of Delaware. The petitioning subsidiaries were Lomas Information Systems, Inc.
("LIS") and Lomas Administrative Services, Inc. ("LAS").

         The Debtor Corporations filed two separate plans of reorganization 
with the Bankruptcy Court. An order confirming the second amended joint plan of
reorganization filed on October 4, 1996 for LFC, LIS and LAS (the "Joint
Debtors") and a stipulation and order among the Joint Debtors and the appointed
statutory committee of unsecured creditors of LFC (the "LFC Creditors'
Committee") regarding technical modifications to the plan of reorganization and
confirmation order filed on January 27, 1997 together with the second amended
joint plan of reorganization filed on July 3, 1996 are collectively referred to
herein as the "Joint Plan".



                                       5
<PAGE>   7
         The Joint Plan was confirmed on October 4, 1996, by the Bankruptcy 
Court. An agreement in respect of intercompany claims between the LFC Creditors'
Committee and the appointed statutory committee of the unsecured creditors of
LMUSA (the "Intercompany Agreement") was approved by the Bankruptcy Court on
February 21, 1997, and became effective in March 1997. Additionally, the Company
transferred $3 million in cash to partially fund a litigation trust to pursue
third-party claims pursuant to the LFC/LMUSA joint litigation trust agreement
among LFC and its subsidiaries and LMUSA, dated March 6, 1997 (the "LFC/LMUSA
Litigation Trust"), filed as an exhibit to the Company's annual report on Form
10-K for the year ended June 30, 1997. Subject to certain exceptions in the
Intercompany Agreement, the LFC Creditors' Trust (as defined herein) and the
creditors' trust established pursuant to the LMUSA Plan will receive sixty and
forty percent, respectively, of net proceeds from litigation. There can be no
assurance that the LFC/LMUSA Litigation Trust will produce any proceeds which
will benefit the Creditors Trust and former creditors. The LFC Creditors'
Committee waived all other conditions and the Joint Plan became effective March
7, 1997 and the Company emerged with a new name, Siena Holdings, Inc. For more
information on the reorganization process, refer to the Company's annual report
on Form 10-K for the year ended June 30, 1998.

         Pursuant to the Joint Plan, the Class 3 unsecured creditors will 
receive a combination of cash and new common stock as settlement of their
allowed claim. On November 12, 1997, the initial distribution date (the "Initial
Distribution Date"), $12.5 million was disbursed to the distribution agent for
the Class 3 unsecured creditors. On May 11, 1998, a second distribution in the
amount of $6.2 million was disbursed to the distribution agent for benefit of
the Class 3 unsecured creditors. In addition, as assets in the Creditors' Trust
(see "Note C - Creditors' Trust") are liquidated, additional distributions will
be made to the Class 3 unsecured creditors. Also, on the Initial Distribution
Date pursuant to the Joint Plan and a decision by the LFC Creditors' Committee,
4,000,000 shares of the new common stock were issued by the stock transfer
agent. For balance sheet presentation and earnings (loss) per share, the
4,000,000 shares were considered issued as of April 1, 1997. The process by the
stock distribution agent has resulted in 3,786,323 shares of common stock
actually distributed to former creditors through September 30, 1998. The Company
expects the stock distribution agent to complete the issuance of the remaining
shares within three years of the Initial Distribution Date.

         THE 4,000,000 SHARES OF THE NEW COMMON STOCK ARE RESTRICTED IF THE 
EFFECT OF A TRANSFER WOULD RESULT IN AN OWNERSHIP INCREASE TO 4.5 PERCENT OR
ABOVE OF THE TOTAL OUTSTANDING SHARES OR FROM 4.5 PERCENT TO A GREATER
PERCENTAGE OF THE TOTAL OUTSTANDING SHARES, WITHOUT PRIOR APPROVAL BY THE BOARD
OF DIRECTORS AS DESCRIBED IN THE RESTATED CERTIFICATE OF INCORPORATION. SEE
EXHIBITS TO THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JUNE 30,
1997.

         The amounts ultimately distributed to the former creditors will be
solely dependent on the success of the Company, the amounts realized from the
collection of assets and the settlement of liabilities for both the Creditors'
Trust and the Litigation Trust. See "Note C - Creditors' Trust".

         THE LFC CREDITORS TRUST AND ANY PROCEEDS FROM THE LFC/LMUSA LITIGATION
TRUST ARE SOLELY FOR THE BENEFIT OF THE FORMER CREDITORS OF THE JOINT DEBTORS.
STOCKHOLDERS WILL NOT BENEFIT FROM THESE TRUSTS UNLESS THEY HELD CLASS 3 -
GENERAL UNSECURED CLAIMS AS DEFINED IN THE JOINT PLAN. SEE NOTE C - CREDITORS'
TRUST.

NOTE C -- CREDITORS' TRUST

         The Joint Plan established a creditors' trust (the "Creditors' Trust")
in which the Company serves as trustee. The Creditors' Trust holds the
non-reorganized assets of the Company in trust pending their disposition and/or
distribution to the creditors in accordance with the terms of the Joint Plan.
The Creditors' Trust is organized for the sole purpose of liquidating the
non-reorganized assets including proceeds, if any from the LFC/LMUSA Litigation
Trust and will terminate on October 4, 2001, unless an extension is approved by
the Bankruptcy Court. The assets and liabilities of the Creditors' Trust are not
reflected in the accompanying Consolidated Balance Sheets as the Company is not
the beneficiary of the Trust. Accordingly, revenues and expenses related to the
Creditors' Trust assets and liabilities since April 1, 1997, are not 




                                       6
<PAGE>   8

reflected in the accompanying Statements of Consolidated Operations. The
allocation of costs between the Creditors' Trust and the Company is based on
management's estimate of each entity's proportional share of costs. Gains and
losses from the Creditors' Trust are solely for the former creditors' benefit
and the Company has no risk of loss on the assets or liabilities. The amounts
ultimately distributed to the former creditors will be solely dependent on the
success of the Company, the amounts realized from the collection of assets and
settlement of liabilities for both the Creditors' Trust and the LFC/LMUSA
Litigation Trust. Stockholders who are not former creditors of the Joint Debtors
are not beneficiaries of the Creditors' Trust.

         There can be no assurance that the LFC/LMUSA Litigation Trust will
produce any proceeds which will benefit the Creditors' Trust and former
creditors.

         The following is a summary of the non-reorganized assets and
liabilities held in the Creditors' Trust as of September 30, 1998 (in thousands)
(unaudited):

<TABLE>
<S>                                                                                            <C>
Cash held in reserve for payment of administrative expenses and other trust liabilities....    $    152
Accounts payable and accrued expenses .....................................................         (51)
                                                                                                -------
       Cash available for future trust expenses * .........................................     $   101
                                                                                                =======

Cash held in reserve for payment of certain claims ........................................     $    83
                                                                                                =======

Net assets of the Creditors Trust:
      Cash ................................................................................     $ 5,095
      Cash reserved for contingent obligations ............................................       3,500
      Investments .........................................................................          20
                                                                                                -------

                  Net assets of the Creditors Trust .......................................     $ 8,615
                                                                                                =======
</TABLE>

        * Pursuant to the Joint Plan, an additional $300,000 of cash was set
        aside during the year ended June 30, 1998, and is included in the
        remaining balance of cash available for future trust expenses.

         The Company charged to the Creditors' Trust expenses of $87,000 and
$20,000 for the quarters ended September 30, 1998 and 1997, respectively,
reported as trust expense reimbursement on the Company's Statement of
Consolidated Operations. The expenses consisted of an overhead allocation from
the Company, based upon management's estimate of resources used by the
Creditors' Trust. The allocation for the first quarter of fiscal year 1998 only
included personnel expense. The allocation was adjusted in the second quarter of
fiscal year 1998 to include other overhead expenses. The allocation of overhead
to the Creditors' Trust is expected to decrease during fiscal year 1999.

         The cash reserve for contingent obligations in the amount of $3.5
million as of September 30, 1998, includes $1.0 million for a contingent
liability to SHI related to insurance retention, $1.0 million for possible
additional legal expense related to the LFC/LMUSA Litigation Trust and $1.5
million for other legal and administrative expenses.

         In September 1998, the Creditors' Trust received the final distribution
from the investment it carried in two limited partnerships which funded
institutional mortgage loans, resulting in a writeoff of the remaining balance
of $440,000.

          On July 1, 1998, a federal district court approved a settlement of the
funds held in the Management Security Plan ("MSP") trust whereby the Creditors'
Trust and the MSP beneficiaries would equally share the assets remaining after
payment of certain legal expenses and MSP trust fees, in the amount of $0.4
million. Accordingly, on July 10, 1998, the Creditors' Trust received $4.085
million pursuant to the final settlement. Refer to the Company's annual report
on Form 10-K for the year ended June 30, 1998, for more information on the MSP
trust.


                                       7
<PAGE>   9
        THE LFC CREDITORS TRUST AND ANY PROCEEDS FROM THE LFC/LMUSA LITIGATION
TRUST ARE SOLELY FOR THE BENEFIT OF THE FORMER CREDITORS OF THE JOINT DEBTORS.
STOCKHOLDERS WILL NOT BENEFIT FROM THESE TRUSTS UNLESS THEY HELD CLASS 3 -
GENERAL UNSECURED CLAIMS AS DEFINED IN THE JOINT PLAN. SEE NOTE B -
REORGANIZATION.

NOTE D -- STOCK AND COMPENSATION PLANS

         Compensation Plans. Separate retention agreements (the "Retention
Agreements"), filed as an exhibit to the Company's quarterly report on Form 10-Q
for the period ended December 31, 1997, were approved by the Board of Directors
effective December 1, 1997, for the Company's two executive officers, John P.
Kneafsey - Chief Executive Officer and W. Joseph Dryer - President. The
Retention Agreements, with a five year term, provide for the payment of: (1) a
monthly retainer, (2) severance upon early termination of the contract by the
Company, and (3) a success bonus based upon certain performance criteria of the
Company and its subsidiaries and the Company's results as trustee of the
Creditors' Trust.

         In accordance with the success bonus defined above, the Board of
Directors approved a bonus payable in the fourth quarter of fiscal year 1998 to
the executive officers of the Company based on cash received by the Creditors'
Trust in excess of the book value upon liquidation of a subordinated promissory
note held in the Creditors' Trust. The Company received $590,000 in May 1998 for
the bonus pool from the proceeds received by the Creditors' Trust. The Board of
Directors approved an aggregate bonus amount of $492,000 for the executive
officers. One payment was made in May 1998 and the other officer elected not to
receive the payment at that time, thus a payable of $295,000 is included in
accounts payable and accrued expenses on the Company's Consolidated Balance
Sheet as of September 30, 1998 and June 30, 1998. Based on the same bonus
criteria but subject to shareholder approval, the remaining $98,000 remains
payable to the directors as of September 30, 1998 and June 30, 1998.

         Stock Option Plan. The Retention Agreements also awarded stock options
to Mr. Kneafsey and Mr. Dryer pursuant to the SHI Nonqualified Stock Option
Agreements (the "Stock Option Plan"), also filed as an exhibit to the Company's
quarterly report on Form 10-Q for the period ended December 31, 1997. The Stock
Option Plan granted the officers options to purchase an aggregate of 434,750
shares of the Company's common stock, with an effective date of December 1, 1997
(the "Date of Grant").

         The options granted under the Stock Option Plan have an exercise price
of $0.92 per common share and vest at a rate of twenty percent per year for five
years on the anniversary of the Date of Grant. The fair market value of the
common stock on the Date of Grant was $1.109. Upon the event of any
change-in-control of the Company the stock options shall be 100% vested. The
stock options resulted in compensation expense of $4,000, with a corresponding
increase in additional paid-in capital, for the quarter ended September 30,
1998. Additional stock options or other forms of long-term incentive
compensation arrangements may from time to time be granted by the Board of
Directors.

         Director's Stock Option Plan. Pursuant to shareholder approval, stock
options will also be awarded to the Company's directors under the Stock Option
Plan. Under the proposed plan, each of the five directors would receive options
to purchase 40,000 shares of the Company's common stock, with the same Date of
Grant and other features as the officers' plan. If approved by the shareholders,
the Company would recognize compensation expense of $8,000 in the second quarter
of fiscal year 1999.

NOTE E -- EARNINGS (LOSS) PER SHARE

         During the second quarter of 1998 the Company adopted SFAS No. 128
"Earnings Per Share" ("SFAS No. 128") which replaces the presentation of primary
earnings per share ("EPS") with a presentation of basic EPS and requires dual
presentation of basic and diluted EPS. SFAS No. 128 is effective for both
interim and annual financial statements issued after December 15, 1997. The
Company retroactively applied SFAS No. 128 to the quarter ended September 30,
1997. Adoption of FAS 128 did not have a material impact on the earnings (loss)
per share.


                                       8
<PAGE>   10
         Earnings (loss) per common share for the quarters ended September 30,
1998 and 1997, were determined using the weighted average shares issued or
reserved for issuance as of September 30, 1998 and 1997, respectively. Effective
December 1, 1997 the Company granted options under the Siena Holdings, Inc.
Nonqualified Stock Option Agreements (the "Nonqualified Stock Option
Agreements"), included as exhibits to the Company's quarterly report on Form
10-Q as of December 31, 1997. The effects of outstanding options are included in
the calculation of diluted earnings per common share to the extent that they are
dilutive to earnings.

NOTE F -- ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

           In June 1997, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information" ("SFAS No. 131"). This statement requires that companies disclose
segment data on the basis that it is used internally by management for
evaluating segment performance and allocating resources to segments. This
statement requires that a company report a measure of segment profit or loss,
certain specific revenue and expense items, and segment assets. It also requires
various reconciliations of total segment information to amounts in the
consolidated financial statements. The Company's current definition of its
business segments will not materially change from the current presentation. SFAS
No. 131 is effective for fiscal years beginning after December 31, 1997, thus
the Company will adopt this statement as of June 30, 1999.

NOTE G -- SUBSEQUENT EVENTS

           Recognizing the need of the Company for additional working capital,
the Chairman of the Company offered to make a cash investment for a certain
number of shares of the Company's common stock. This offer was considered and
accepted by the Company's Board of Directors at its regularly scheduled
quarterly meeting held in Wilmington, Delaware on September 23, 1998. The
Chairman did not participate in the vote of the Board accepting this offer. On
November 5, 1998, the Company received $2.2 million in exchange for 2 million
shares of the Company's common stock. This transaction increased the number of
outstanding shares of common stock to 6 million.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
         RESULTS OF OPERATIONS.

RESULTS OF OPERATIONS

         Statements contained herein that are not purely historical are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including
but not limited to statements regarding the Company's expectations, hopes,
beliefs, intentions or strategies regarding the future. Actual results could
differ materially from those projected in any forward-looking statements as a
result of a number of factors, including those detailed in this Management's
Discussion and Analysis of Financial Condition and Results of Operations, as
well as those set forth elsewhere herein. The forward-looking statements are
made as of the date of these financial statements and the Company undertakes no
obligation to update or revise the forward-looking statements, or to update the
reasons why actual results could differ materially from those projected in the
forward-looking statements.

         In accordance with the American Institute of Certified Public
Accountants' Statement of Position 90-7, "Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code", the Company adopted fresh-start
accounting as of March 31, 1997. See "Note A - Basis of Financial Statement
Presentation". Since April 1, 1997, the Company's financial statements have been
prepared as if it is a new reporting entity.


                                       9
<PAGE>   11

          The operating results of the Company during the quarters ended
September 30, 1998 and 1997 were as follows (in thousands):

<TABLE>
<CAPTION>
                                                          Quarter Ended   Quarter Ended
                                                          September 30,   September 30,
                                                              1998             1997
                                                          -------------   -------------
<S>                                                       <C>                 <C>     
Operating income (loss):                                                              
 Assisted care management .................................   $  90            $ 121  
 Real estate ..............................................      (4)              10  
 Other ....................................................     123               63  
                                                              -----            -----  
                                                                209              194  
Expenses:                                                                             
 General and administrative ...............................    (263)            (125) 
                                                              -----            -----  
                                                                                      
Income (loss) before federal income tax benefit (expense)       (54)              69  
Federal income tax expense ................................      --              (24) 
                                                              -----            -----  
   Net income (loss) ......................................   $ (54)           $  45  
                                                              =====            =====
</TABLE>

         Assisted Care Management. The decrease in the profitability of the
assisted care management operations from $121,000 for the quarter ended
September 30, 1997 to $90,000 for the quarter ended September 30, 1998, is
primarily attributable to the decreased management fee received by Siena Housing
Management, Inc. ("SHM"), a wholly-owned subsidiary of the Company.
Additionally, the LLG subsidiary reported decreased interest income for the
quarter ended September 30, 1998 as compared to prior periods due to a decision
by management to maintain a smaller cash balance at the subsidiary company.

           SHM manages and maintains an assisted care facility in Houston, Texas
under a management agreement into which it entered on June 27, 1977 with
Treemont, Inc. ("Treemont"). Treemont elected to begin significant capital
improvements for fire protection that are to be funded by operations. These
expenditures decreased the quarterly management fee received by SHM beginning
with the second quarter of fiscal year 1998 and were complete by June 30, 1998,
except for cosmetic and other details that were finished in this quarter. The
final construction retention costs should be paid in the second quarter of
fiscal 1999. In addition, Treemont incurred other unexpected capital
expenditures of $20,000 during the first quarter of fiscal 1999 that were funded
by operations. After December 31, 1997, Treemont will no longer pay the Company
for pension benefits paid to the employees of SHM. Refer to the Company's annual
report on Form 10-K for the fiscal year ended June 30, 1998 for more information
on the Company's assisted care business and management contract.

         The owners of Treemont have contacted the Company's management and
requested a legal review of the management agreement as they believe certain
parts of the contract are illegal. The Company does not believe that the review
will result in a change in the terms. The Company believes that the agreement is
substantially secured at this time by the Treemont property in Houston.

         Real Estate. The Company's investment in real estate is owned by LLG
Lands, Inc. ("LLG"), a wholly-owned subsidiary of the Company. The Company holds
approximately 150 net acres of undeveloped land in Allen, Texas. Of this total,
approximately 37 net acres are zoned for multi-family use, the remaining net
acreage was zoned for single family use and commercial use. The Company
attempted to increase the values of the property through the re-zoning and
relocation of zoning in certain tracts. The Company has been notified that its
re-zoning application has been approved. By this application the Company
relocated its multi-family tract to a more accessible location and changed the
single family zoning to light industrial. Refer to the Company's annual report
on Form 10-K for the fiscal year ended June 30, 1998 for more information on the
Company's real estate investment.



                                       10
<PAGE>   12
         The operations of LLG are minimal thus the operating income (loss) for
the first quarter in both fiscal year 1999 and fiscal year 1998 are consistent.
Costs related to the re-zoning, marketing and developing the property will
continue, some of which may be capitalized. Additionally, the LLG subsidiary
reported decreased interest income for the quarter ended September 30, 1998 as
compared to prior periods due to a decision by management to maintain a smaller
cash balance at the subsidiary company.

         Other Operations. The Company reported other operating income of
$123,000 and $63,000 for the quarters ended September 30, 1998 and 1997,
respectively. This included an overhead allocation based upon managements
estimate of resources used by the Creditors' Trust and charged to the Creditors'
Trust of $87,000 and $20,000 for the quarters ended September 30, 1998 and 1997,
respectively. The allocation for the first quarter of fiscal year 1998 only
included personnel expense. The allocation was adjusted in the second quarter of
fiscal year 1998 to include other overhead expenses. The allocation of overhead
to the Creditors' Trust is expected to decrease during fiscal year 1999. The
remaining income in fiscal year 1999 consisted primarily of interest income, due
to a decision by management to maintain a larger cash balance at the parent
company.

         Expenses. General and administrative expenses increased from $125,000
for the first quarter in fiscal year 1998 to $263,000 for the same period in
fiscal year 1999. The increase is attributable to: (1) non-recurring consulting
expenses of $90,000, (2) an increase in the monthly retainer as a result of the
officers' new retention agreements effective December 1, 1997, for a quarterly
increase of $28,000, and (3) additional directors fees of $22,000 as compared to
the same quarter in the prior year resulting from the accrual of the directors'
annual fee and two additional meetings. The directors' fiscal 1998 annual fee
was paid in the fourth quarter of fiscal 1997. The stock options resulted in
related expense of $4,000 for the quarter ended September 30, 1998.

         Due to the Company's lack of dependence on computer software, the
Company does not expect the cost of addressing the Year 2000 issue to have a
material impact on the Company's future operating results.

LIQUIDITY AND CAPITAL RESOURCES

         As of September 30, 1998, the only liabilities of the Company were
accounts payable and accrued expenses which will be paid from current operating
cash available as of September 30, 1998.

         In December 1997, the Company received a letter from the attorney of
the insurance company that carried the former directors and officers insurance
coverage, stating that there is a $1.0 million per claim retention which must be
completely exhausted before the insurance company is implicated. Management at
this time believes that the Company is not responsible for this retention amount
as a result of the Joint Plan.

          Management is also reviewing the Company's obligation, if any,
pursuant to the trustee agreement and the Joint Plan to lend additional funds to
the LFC/LMUSA Litigation Trust. The Board of Directors of the Company would have
to approve any such transaction.

          On September 25, 1998 the Company was advised that it was named as a
Counter-Defendant in the counterclaim filed by the defendants of the LFC/LMUSA
Litigation Trust's lawsuit against certain former officers and directors of
Lomas Financial Corporation and subsidiaries. The counterclaim seeks joint and
several liability. The Company has responded to the counterclaim denying
liability and preserving the Company's rights and defenses. Separately the
Company initiated litigation in the Delaware Bankruptcy Court to obtain a
declaration of rights and an order to turn over records. A successful outcome in
the Delaware court should resolve the counterclaim.

         Recognizing the need of the Company for additional working capital, the
Chairman of the Company offered to make a cash investment for a certain number
of shares of the Company's common stock. This offer was considered and accepted
by the Company's Board of Directors at its regularly scheduled quarterly meeting
held in Wilmington, Delaware on September 23, 1998. The Chairman did not
participate in the vote of the Board accepting this offer. On November 5, 1998,
the Company received $2.2 million in exchange for 2 million shares of the
Company's common stock. This transaction increased the number of outstanding
shares of common stock to 6 million.



                                       11
<PAGE>   13
PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         In December 1997, the Company received a letter from the attorney of
the insurance company that carried the former directors and officers insurance
coverage, stating that there is a $1.0 million per claim retention which must be
completely exhausted before the insurance company is implicated. Management at
this time believes that the Company is not responsible for this retention amount
as a result of the Joint Plan.

         Management is also reviewing the Company's obligation, if any, pursuant
to the trustee agreement and the Joint Plan to lend additional funds to the
LFC/LMUSA Litigation Trust. The Board of Directors of the Company would have to
approve any such transaction.

         On September 25, 1998 the Company was advised that it was named as a
Counter-Defendant in the counterclaim filed by the defendants of the LFC/LMUSA
Litigation Trust's lawsuit against certain former officers and directors of
Lomas Financial Corporation and subsidiaries. The counterclaim seeks joint and
several liability. The Company has responded to the counterclaim denying
liability and preserving the Company's rights and defenses. Separately the
Company initiated litigation in the Delaware Bankruptcy Court to obtain a
declaration of rights and an order to turn over records. A successful outcome in
the Delaware court should resolve the counterclaim.

         The LFC Creditors' Trust and any proceeds from the LFC/LMUSA Litigation
Trust are solely for the benefit of the former creditors of the Joint Debtors.
Stockholders will not benefit from these trusts unless they held Class 3 -
general unsecured claims as defined in the Joint Plan.

          The assisted care facility management subsidiary, SHM, is a
wholly-owned subsidiary of the Company, and conducts business in Houston, Texas
pursuant to a management agreement. SHM manages and maintains an assisted care
facility in Houston, Texas under a management agreement into which it entered on
June 27, 1977 with Treemont. The owners of Treemont have contacted the Company's
management and requested a legal review of the management agreement as they
believe certain parts of the contract are illegal. The Company does not believe
that the review will result in a change in the terms. The Company believes that
the agreement is substantially secured at this time by the Treemont property in
Houston.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         Refer to the Company's annual report on Form 10-K for the year ended
June 30, 1998, for information regarding defaults by the Company relating to the
debt obligations of the Predecessor Company.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         (a) Exhibits:

                  Exhibit
                  Number
                  ------

                  (11)    Computation of Earnings (Loss) Per Share

                  (27)    Financial Data Schedule (submitted to the Securities
                          and Exchange Commission for its information).

         (b) Reports on Form 8-K: None.



                                       12
<PAGE>   14

SIGNATURES

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


                                                      SIENA HOLDINGS, INC.
                                                  ----------------------------
                                                          (Registrant)




Date:  November 10, 1998                      By:  /s/     W. JOSEPH DRYER
                                                  ----------------------------
                                                            President




Date:  November 10, 1998                      By:  /s/     W. JOSEPH DRYER
                                                  ----------------------------
                                                  Principal Accounting Officer



                                       13
<PAGE>   15

                               INDEX TO EXHIBITS


<TABLE>
<CAPTION>
EXHIBIT
NUMBER                   EXHIBIT
-------                  -------
 <S>                 <C>    
  11                 Computation of Earnings (Loss) Per Share

  27                 Financial Data Schedule
</TABLE>