================================================================================
   As filed with the Securities and Exchange Commission on November 15, 2000

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549-1004

                                    FORM 10-Q


(Mark One)

[X]      Quarterly  report  pursuant  to Section 13 or 15 (d) of the  Securities
         Exchange Act of 1934

         For the quarterly period ended September 30, 2000
                                        ------------------

                                       OR

[  ]     Transition  report  pursuant  to section 13 or 15(d) of the  Securities
         Exchange Act of 1934

         For the Transition Period From                To
                                        --------------    -------------------

                        Commission file number 333-38673

                                 RB ASSET, INC.
                                 --------------
             (Exact name of registrant as specified in its charter)

Delaware                                                              13-5041680
--------------------------------------------------------------------------------
(State or other jurisdiction                                 (I.R.S. Employer
of incorporation or organization)                            Identification No.)


645 Fifth Avenue  Eight Floor, New York, New York                       10022
--------------------------------------------------------------------------------
(Address of principal executive offices)                             (Zip Code)

Company's telephone number, including area code:   (212)  848-0201
                                                   ---------------



Securities registered pursuant to section 12(b) of the Act:         None
Securities registered pursuant to section 12(g) of the Act:         None



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 periods 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  /  /


The  number  of  shares  of the  Registrant's  Common  Stock,  $.01  par  value,
outstanding as of November 14, 2000 was  7,100,000.  The number of shares of the
Registrant's 15% Non-cumulative  Perpetual  Preferred Stock,  Series A, $.01 par
value, outstanding as of November 14, 2000 was 937,777.


================================================================================

<PAGE>




                                 RB ASSET, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                  PAGE
                                                                                                  ----
INDEX

PART I.  FINANCIAL INFORMATION

<S>      <C>                                                                                          <C>
         Item 1.   Financial Statements

                        Consolidated Statements of Financial Condition as of September 30,
                        2000 (unaudited) and June 30, 2000................................            3

                        Consolidated Statements of Operations for the three months ended
                        September 30, 2000 and 1999 (unaudited)..........................             4

                        Consolidated Statements of Changes in Stockholders' Equity for the
                        three months ended September 30, 2000 and 1999 (unaudited) ......             5

                        Consolidated Statements of Cash Flows for the three months ended
                        September 30, 2000 and 1999 (unaudited)..........................             6

                        Notes to the Consolidated Financial Statements ..................             8

            Item 2.   Management's Discussion and Analysis of Financial Condition
                      and the Results of Operations .....................................            14

            Item 3.   Quantitative and Qualitative Disclosures About Market Risk.........            19


PART II. OTHER INFORMATION

         Item 1.   Legal Proceedings ...................................................             20
         Item 2.   Changes in Securities ...............................................             21
         Item 3.   Defaults Upon Senior Securities .....................................             21
         Item 4.   Submissions of Matters to a Vote of Securities Holders ..............             21
         Item 5.   Other Information ...................................................             21
         Item 6.   Exhibits and Reports on Form 8-K ....................................             21

SIGNATURE.......   .....................................................................             22

</TABLE>




                                        2

<PAGE>







PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements

                                 RB ASSET, INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                      September 30, 2000 and June 30, 2000
                             (Dollars in Thousands)

                                     Assets
<TABLE>
<CAPTION>

                                                                             (Unaudited)
                                                                            September 30,         June 30,
                                                                                 2000              2000
                                                                                ------             ----
<S>                                                                      <C>                  <C>
Real estate assets:
Real estate held for investment, net of accumulated
   depreciation of $6,146 and $5,550, respectively                       $         101,249    $         99,321

Real estate held for disposal                                                        5,876               2,040
      Allowance for fair market value reserve under SFAS-121                           (40)                (40)
                                                                         -----------------   -----------------
           Total real estate held for disposal, net                                  5,836               2,000

Investments in joint ventures                                                        1,454               1,454
                                                                         -----------------   -----------------

           Total real estate assets                                                108,539             102,775

Loans receivable:
      Secured by real estate                                                        32,328              32,339
      Commercial and consumer                                                        7,247               7,247
      Allowance for possible credit losses                                        (13,341)            (13,341)
                                                                         -----------------   -----------------
           Total loans receivable, net                                              26,234              26,245

Cash, due from banks and cash equivalents                                           34,367              33,666
Cash, due from banks - restricted                                                    7,500               7,500
Investment securities available for sale                                             1,316               1,170
Other assets                                                                         2,414               2,425
                                                                         -----------------   -----------------
        Total Assets                                                     $         180,370    $        173,781
                                                                         =================   =================

                      Liabilities and Stockholders' Equity

Increasing Rate Junior Subordinated Notes due 2006                       $         13,095    $         12,527
Borrowed funds                                                                      57,517              52,033
Other liabilities                                                                   12,828              12,379
                                                                         -----------------   -----------------
        Total Liabilities                                                           83,440              76,939
                                                                         -----------------   -----------------

Commitments and contingencies (Note 3) Stockholders' equity:
15% non-cumulative preferred stock, Series A par value $1,
liquidation value $25 (1,400,000 shares authorized, 937,777
issued and outstanding at September 30, 2000 and June 30, 2000)                        938                 938

Common stock par value $1 (30,000,000 shares authorized,
7,100,000 shares issued and outstanding at September 30,
2000 and June 30, 2000)                                                              7,100               7,100

Additional paid in capital                                                         100,439             100,439
Accumulated deficit                                                               (10,565)            (10,507)
Securities valuation account                                                         (982)             (1,128)
                                                                         -----------------   -----------------
        Total Stockholders' Equity                                                  96,930              96,842
                                                                         -----------------   -----------------
Total Liabilities and Stockholders' Equity                               $        180,370    $        173,781
                                                                         =================   =================

 See notes to Consolidated Financial Statements
</TABLE>


                                        3

<PAGE>





                                 RB ASSET, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 Three months ended September 30, 2000 and 1999
                  (dollars in thousands, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                  Three months ended
                                                                                    September 30,
                                                                         ------------------------------------
                                                                              2000                1999
                                                                         ---------------    -----------------

<S>                                                                       <C>               <C>
Revenue:
Rental revenue and operations:
         Rental income and other property revenue                         $       4,020     $          4,031
         Property operating and maintenance expense                              (2,572)              (2,714)
         Depreciation - real estate held for investment                            (604)                (571)
                                                                         ---------------    -----------------
     Net rental operations                                                          844                  746

Net gain on sale of real estate                                                     838                  -

Interest income:
         Loans receivable                                                           334                  569
         Money market investments and other                                         194                  172
                                                                         ---------------    -----------------
     Total interest income                                                          528                  741
                                                                         ---------------    -----------------
         Total revenues                                                           2,210                1,487
                                                                         ---------------    -----------------

Expenses:
   Interest expense:
         Increasing Rate Junior Subordinated Notes due 2006                         318                  288
         Borrowed funds                                                             686                  659
         Other                                                                        3                   22
                                                                         ---------------    -----------------
              Total interest expense                                              1,007                  969

   Other expenses:
         Salaries and employee benefits                                              59                   51
         Legal and professional fees                                                299                  202
         Management fees                                                            591                  578
         Other                                                                       86                  177
                                                                         ---------------    -----------------
              Total other expenses                                                1,035                1,008

         Total expenses                                                           2,042                1,977
                                                                         ---------------    -----------------

(Loss) income before provision for income taxes                                     168                (490)
                                                                         ---------------    -----------------

Provision for income taxes                                                          226                  182

Net (loss) income                                                                  (58)                (672)

Dividends declared on preferred stock                                                  -                    -
                                                                         ---------------    -----------------

Net (loss) income applicable to common stock                              $         (58)     $          (672)
                                                                         ===============    =================

Basic and diluted (loss) income per common share                          $       (0.01)     $         (0.09)
                                                                         ===============    =================

</TABLE>





See notes to Consolidated Financial Statements

                                        4

<PAGE>





                                 RB ASSET, INC.
                      CONSOLIDATED STATEMENTS OF CHANGES IN
                        STOCKHOLDERS' EQUITY Three months
                        ended September 30, 2000 and 1999
                             (dollars in Thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                       Series A
                                       Non-
                                       cumulative
                                       Perpetual                   Additional     Retained       Accumulated         Total
                                       Preferred       Common       Paid-in       Earnings     Comprehensive     Stockholders'
                                       Stock           Stock        Capital      (Deficit)        Income             Equity
                                       ------------   ----------  -------------  -----------  ---------------   ---------------

<S>                                     <C>          <C>          <C>            <C>          <C>               <C>
Balances at June 30, 1999               $    938     $  7,100     $ 100,439      $ (10,956)   $    (1,004)      $ 96,517

Net loss for the three months
ended September 30, 1999                     -             -            -             (672)           -             (672)

Preferred stock dividends payable            -             -            -              -              -              -

Change in comprehensive income
resulting from changes in unrealized
loss on securities available-for-sale        -             -            -              -             (147)          (147)

Balances at September 30, 1999          $    938     $  7,100     $ 100,439      $ (11,628)   $    (1,151)      $ 95,698
                                        =========    =========    ==========     ===========  =============     =========

Balances at June 30, 2000               $    938     $  7,100     $ 100,439      $ (10,507)   $    (1,128)      $ 96,842

Net loss for the three months
ended September 30, 2000                     -             -            -              (58)           -             (58)

Preferred stock dividends payable            -             -            -              -              -              -

Change in comprehensive income
resulting from changes in unrealized
loss on securities available-for-sale        -             -            -              -              146            146

Balances at September 30, 2000          $    938     $  7,100     $ 100,439      $ (10,565)   $      (982)      $ 96,930
                                        =========    =========   ==========      ===========  =============     =========

</TABLE>


See notes to Consolidated Financial Statements

                                        5

<PAGE>




                                 RB ASSET, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 Three months ended September 30, 2000 and 1999
                                           (dollars in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                         Three months ended
                                                                                           September 30,
                                                                                ---------------------------------
                                                                                        2000            1999
                                                                                ----------------  ---------------
<S>                                                                            <C>             <C>
Operating Activities:
Cash flows provided by (used in) Operating Activities:
  Net loss                                                                     $         (58)  $          (672)
  Adjustments to reconcile net loss income to cash
  provided by (used in) operating activities:
      Net gain on sale of real estate assets                                          (838)                -
      Depreciation and amortization                                                     604              571
      Amortization of capitalized issuance costs and accretion of
         issuance discount - Increasing Rate Junior Subordinated Notes
         due 2006                                                                        49               40
  Change in operating assets and liabilities:
      Net (increase) decrease in accrued interest  receivable                         (110)               85
      Net increase in accrued interest payable, net of accrued
         interest payable capitalized as additional principal -
          Increasing Rate Junior Subordinated Notes due 2006                            254              166
      Net increase (decrease) in accrued income taxes                                   169            (180)
      Net increase (decrease) in accrued expenses and other
         liabilities                                                                    537            (179)
      Net decrease (increase) in prepaid expenses and other assets                      121     (659)
            Net cash provided by (used in) operating activities                         728              828
                                                                                ----------------  ---------------

Investing Activities:
Cash flows provided by Investing Activities:
  Net repayment of loans secured by real estate, net                                     11           23,279
  Net repayment of commercial and consumer loans                                          -                8
  Proceeds from partnership distributions - investments in joint ventures                 -               25
  Proceeds related to sales of real estate held for sale                              1,048                -
  Additional fundings on real estate held                                           (6,570)            (314)
            Net cash (used in) provided by investing activities                     (5,511)           22,998
                                                                                ----------------  ---------------

</TABLE>

(Continued on next page)




See notes to Consolidated Financial Statements

                                        6

<PAGE>




                                 RB ASSET, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 Three months ended September 30, 2000 and 1999
                                          (dollars in thousands)
                                   (Unaudited)

(Continued from previous page)

<TABLE>
<CAPTION>

                                                                                       Three months ended
                                                                                         September 30,
                                                                                --------------------------------
                                                                                      2000            1999
                                                                                ---------------- ---------------
<S>                                                                             <C>              <C>
Financing Activities:
Cash flows used in Financing Activities:
  Decrease in restricted cash                                                           -             (23,059)
  Proceeds from borrowed funds                                                        6,179               -
  Repayment of borrowed funds                                                         (695)               -
                                                                                ---------------- ---------------
            Net cash provided by (used in) financing activities                       5,484           (23,059)
                                                                                ---------------- ---------------

Net increase(decrease) in cash, due from banks and cash equivalents                     701              (889)

Cash, due from banks and cash equivalents - beginning of period                      33,666            14,780
                                                                                ---------------- ---------------

Cash, due from banks and cash equivalents - end of period                       $   34,367       $     13,891
                                                                                ================ ===============



Supplemental Disclosure of Cash Flow Information
Cash paid for:
      Interest                                                                  $      660       $      1,251
      Federal, state and local taxes                                                   138                387

Supplemental Disclosure of Non-cash Transactions
Accrued interest capitalized as additional principal - Increasing Rate                                      7
Junior Subordinated Notes due 2006                                              $      518       $         48


</TABLE>



See notes to Consolidated Financial Statements



                                        7

<PAGE>


                                 RB Asset, Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2000
                             (Dollars in thousands)
                                   (Unaudited)

1.  Organization and Formation of the Company

RB Asset,  Inc.  (the  "Company")  is a  Delaware  corporation  whose  principal
business  is the  management  of its real  estate  assets,  mortgage  loans  and
investment  securities,  under a business plan intended to maximize  shareholder
value.   As  a  result  of  the   completion   of   reorganization   steps  (the
"Reorganization") in the prior fiscal year, the Company succeeded to the assets,
liabilities and business of River Bank America ("River Bank" or the "Predecessor
Bank").  Unless the context  otherwise  requires,  references  to the  business,
assets  and  liabilities  of the  Company  prior  to May 22,  1998  include  the
business, assets and liabilities of the Predecessor Bank. This report is for the
three months ended September 30, 2000.

On May 22, 1998, under a plan that was approved by it's stockholders, River Bank
completed its  Reorganization  into a Delaware  corporation named RB Asset, Inc.
Prior to the  Reorganization,  River Bank was a New York State  chartered  stock
savings bank and was  regulated by the New York State Banking  Department  ("the
Banking  Department"  or the "NYSBD") and,  until December 31, 1997, the Federal
Deposit Insurance Corporation (the "FDIC").

In connection with the  Reorganization,  on June 23, 1998, the Predecessor  Bank
was dissolved and its legal existence  terminated.  Upon such  dissolution,  the
capital stock of River Bank was canceled and the stock transfer records of River
Bank were closed. On that date, common and preferred  stockholders of River Bank
received shares of RB Asset, Inc. on a  share-for-share  basis so that RB Asset,
Inc. was owned by the same  stockholders,  in the same proportions,  as owned by
the Predecessor Bank on the record date. The transfer of assets, liabilities and
business of River Bank to RB Asset,  Inc.  was expected to qualify as a tax-free
reorganization under the Internal Revenue Code and, as such, the Company expects
that certain tax attributes of the Predecessor Bank have been preserved.

On June 28, 1996, the Predecessor  Bank had consummated  the  transactions  (the
"Branch Sale")  contemplated by the Purchase of Assets and Liability  Assumption
Agreement (the "Branch  Agreement") by and between the Predecessor Bank and HSBC
Bank USA ("HSBC"),  a banking corporation formerly known as Marine Midland Bank.
Following  consummation of the Branch Sale, all retail banking operations of the
Predecessor  Bank ceased.  Pursuant to the terms of the Branch  Agreement,  HSBC
assumed  $1,159.6 million of deposit  liabilities  (the "Assumed  Deposits") and
acquired  assets  with an  aggregate  carrying  value of $1,066.6  million  (the
"Transferred  Assets").  The  Transferred  Assets  consisted  primarily of loans
secured by real estate,  mortgage-backed and investment securities,  and 11 bank
branch offices,  inclusive of the name East River Savings Bank.  Included in the
Transferred  Assets  was  approximately  $32.4  million  of loans  in which  the
Predecessor Bank was granted subordinated participation interests. Also included
in the Transferred Assets were the proceeds of dispositions from five individual
asset sale transactions with parties other than HSBC, aggregating $60.4 million,
composed of real estate  assets,  loans and other  receivables  (the "Asset Sale
Transactions").  The Asset Sale  Transactions were structured to include ongoing
recourse  to, and  participation  by, the  Predecessor  Bank with respect to the
assets sold,  based upon the net proceeds  realized on  disposition of assets by
the purchasers.

At June 30,  1996,  the  Predecessor  Bank  retained  $285.5  million in assets,
including primarily real estate assets and non-performing  loans. The balance of
the assets  retained  after the Branch Sale  primarily  consisted of  performing
loans (including loans sold with recourse,  subordinated participations,  junior
subordinated  participations,  loans to facilitate the sale of real estate owned
and  mortgage  and  other  loans)  and a modest  amount  of cash and  investment
securities  (collectively,  the  "Retained  Assets").  Over the five year period
preceding  the  Branch  Sale,  the Bank's  primary  loan  origination  focus was
single-family (one-to-four units) and, to a lesser extent, multi-family (five or
more  units)  residential  loans  secured  by  properties  in the New York  City
metropolitan area.  Primarily as a result of conditions imposed by the NYSBD and
the terms of the HSBC  Facility,  subsequent to June 28, 1996,  the  Predecessor
Bank and the Company have not originated a material amount of loans.


                                        8

<PAGE>


                                 RB Asset, Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2000
                             (Dollars in thousands)
                                   (Unaudited)


Following the Branch Sale, the Company engaged RB Management  Company,  LLC (the
"Management Company") to manage its operations on a day-to-day basis,  including
developing  and  recommending  strategies  to the  Company's  Board of Directors
regarding  the  ongoing  management  of  assets.  The  Management  Company  is a
privately-owned  entity that was newly formed in June 1996 and is  controlled by
Alvin Dworman,  who owns 39.8% of the  outstanding  Common Stock of the Company.
See "Management."

At the time of the closing of the Branch Sale,  the  Predecessor  Bank  obtained
from HSBC a loan facility  (the  "Facility")  consisting  of eleven  independent
mortgage  loans  with  additional   collateral,   in  an  aggregate   amount  of
approximately  $100.0  million.  The  Facility  has been  reduced  by  repayment
activity to $47.6 million at September 30, 2000.

On January 31, 2000,  the Company  completed a  refinancing  of the  outstanding
balance of the existing HSBC Facility.  Under the terms of the  refinancing  the
principal  balance  was  reduced by $1.3 to $49.5  million  and the terms of the
refinancing  provide for  amortization  of the HSBC  Facility  over a term of 20
years and extended the maturity of the HSBC Facility  through  January 31, 2005.
The  HSBC  Facility  is  secured  by a  first  lien on two  properties,  certain
cooperative  shares and a  restricted  cash  collateral  account  (the  "Special
Collateral")  in the  amount  of $7.5  million.  Under  the  terms  of the  HSBC
Facility,  HSBC has  retained  the right to  approve  declaration  or payment of
dividends  on  the   Company's   Preferred   Stock  as  well  as  other  capital
transactions.

As a consequence of the  refinancing of the HSBC Facility,  all loan  collateral
under the previous Facility agreement, other than specified above, including all
cash balances held by HSBC in excess of the $7.5 million Special  Collateral was
released from all liens held by HSBC.

The Predecessor Bank had previously received notice that the approvals necessary
to declare or pay dividends on the Predecessor  Bank's outstanding shares of 15%
noncumulative  perpetual  Preferred  Stock,  Series A, par value $1.00 per share
("Predecessor  Preferred  Stock")  would  not be  provided.  In June  1996,  the
Predecessor  Bank's Board of Directors  declared a Predecessor  Preferred  Stock
dividend for the quarter  ending June 30, 1996,  payment of which was subject to
the receipt of required  approvals from the FDIC and the NYSBD (the  Predecessor
Bank's regulators at the time), as well as HSBC (the Predecessor  Bank's and the
Company's  principal  lender).  Primarily as a result of the above,  neither the
Company's or the  Predecessor  Bank's  Board of Directors  have taken any action
regarding  a  quarterly  dividend  on the  Predecessor  Preferred  Stock  or the
Company's 15% noncumulative perpetual preferred stock, Series A, $1.00 par value
("Company  Preferred  Stock")  for  any  of the  quarterly  periods  ended  from
September 30, 1996 through September 30, 2000. Although the Company is no longer
subject to the  jurisdiction  of either the FDIC or the  NYSBD,  declaration  or
payment of future  dividends on the Company  Preferred Stock will continue to be
subject to the approval of HSBC for so long as the Facility remains outstanding.
The Company has received notice from HSBC that the approval necessary to declare
or pay  dividends  on the Company  Preferred  Stock will not be provided at this
time.  There can be no assurance that the Board of Directors of the Company will
deem it appropriate  to pay dividends on the Company  Preferred  Stock,  even if
permitted to do so by HSBC.

The  Company  is  subject  to the  information  requirements  of the  Securities
Exchange Act of 1934 (the "Exchange  Act") as amended and is presently  required
to file periodic  reports and other  information  with the  Securities  Exchange
Commission (the "SEC").

During the three months ended September 30, 2000, the Company  reported net loss
applicable  to common  shares of  $58,000,  or $(0.01)  per  share.  Significant
factors  contributing  to the  Company's  operating  results  during the quarter
include real estate  property and  maintenance  expenses of $2.6 million,  a net
interest loss (interest  expense on borrowed funds in excess of interest  income
from loan assets) of $479,000, other


                                        9

<PAGE>


                                 RB Asset, Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2000
                             (Dollars in thousands)
                                   (Unaudited)


operating  expenses of $1.0  million,  depreciation  expenses  of  $604,000  and
provisions for income taxes of $226,000,  partially offset by rental income from
real estate  operations  of $4.0 million and gains on the sale of real estate of
$838,000.


2.  Presentation of Interim Financial Statements

The  accompanying  unaudited  consolidated  financial  statements of the Company
include  all  adjustments  which  management   believes  necessary  for  a  fair
presentation  of the Company's  financial  condition at September 30, 2000,  the
results of its operations for the three months ended September 30, 2000 and 1999
and the  statements  of changes in  stockholders'  equity and cash flows for the
three  months ended  September  30, 2000 and 1999.  Adjustments  are of a normal
recurring nature.  These unaudited  consolidated  financial statements have been
prepared in conformity with the accounting principles and practices in effect as
of September 30, 2000, as set forth in the consolidated  financial statements of
RB Asset, Inc., at such date. These unaudited  consolidated financial statements
should be read in conjunction with the audited consolidated financial statements
of RB Asset, Inc. as of June 30, 2000.

The consolidated financial statements include the accounts of RB Asset, Inc. and
its wholly-owned subsidiaries.  Intercompany balances and transactions have been
eliminated in  consolidation.  Due to the anticipated  short-term nature of such
investments in unconsolidated  real estate partnerships are generally carried at
cost,  subject  to  periodic  assessment  of fair  value.  Losses  on  sales  or
dispositions and any adjustments  related to  redetermination  of fair value are
charged,  as real estate  charge-offs  to operations of the period in which such
charges occurred.

In the opinion of management,  the accompanying unaudited consolidated financial
statements  contain  all  adjustments   (consisting  of  only  normal  recurring
accruals) necessary for a fair presentation of the Company's financial condition
as of September 30, 2000,  the results of operations  for the three months ended
September 30, 2000 and 1999, and changes in stockholders'  equity and cash flows
for the three months ended September 30, 2000 and 1999.

In preparing the consolidated  financial  statements,  management is required to
make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities  as of  the  dates  of  the  consolidated  statements  of  financial
condition  and   operations  for  the  period.   Material   estimates  that  are
particularly  susceptible to significant  change in the near-term  relate to the
determination  of the allowance for possible  credit losses and the valuation of
investments in real estate.

Management  believes that the  allowance for possible  credit losses is adequate
and that loans  secured by real estate and real estate held for  investment  are
properly  valued.  While  management  uses  available  information  to establish
reserves,  future additions to the allowance or write downs of other real estate
owned or real estate held for  investment  may be necessary  based on changes in
economic conditions, as well as changes in management strategies.

Management  determines  the  appropriate   classification  of  debt  and  equity
securities  (collectively,  "marketable" securities) at the time of purchase and
reevaluates such  designation as of each balance sheet date.  Available-for-sale
securities are stated at estimated fair value, with unrealized gains and losses,
net of tax, reported in a separate  component of stockholders'  equity. The cost
of  marketable  securities  classified  as  available-for-sale  is adjusted  for
amortization   of  premiums  and  accretion  of  discounts  to  maturity.   Such
amortization  is included in interest  income  from  investments.  Interest  and
dividends are included in interest income from  investments.  Realized gains and
losses, and declines in value judged to be other-than- temporary are included in
net  securities  gains and losses.  The cost of securities  sold is based on the
specific   identification   method.  At  September  30,  2000,  the  balance  of
stockholders'   equity  included  a  cumulative   $982,000  unrealized  loss  on
marketable securities classified as available-for-sale.


                                       10

<PAGE>


                                 RB Asset, Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2000
                             (Dollars in thousands)
                                   (Unaudited)



The provision for income taxes differs from the amount  computed by applying the
statutory  Federal income tax rate of 35% to the income (loss) before  provision
for income taxes primarily due to state and local income and franchise taxes and
limitations  on the  recognition  of tax benefits of net  operating  losses.  At
September  30, 2000 the Company  reviewed  its  potential  current and  deferred
federal and state tax  liabilities in light of the results of operations for the
Company  since  June  30,  2000.  As a  result  of this  analysis,  the  Company
recognized  income tax  expense in the amount of  $226,000,  during the  quarter
ending September 30, 2000.

For the purpose of the statements of cash flows, cash equivalents are defined as
those amounts included in cash and due from banks and money market investments.

Certain  reclassifications  have  been  made to the  prior  years'  consolidated
financial statements to conform to the current year's presentation.


3.  Commitments and Contingencies

As of  September  30,  2000,  the  Company  had  deferred  tax assets  that were
primarily  attributable  to NOLs,  an  allowance  for loan losses and  suspended
passive  activity  losses and credits which were partially  offset by a deferred
tax liability in its consolidated  financial  statements.  However,  a valuation
allowance was set up equal to the amount of the difference between the tentative
deferred  tax  asset  and  the  tentative  deferred  tax  liability  due  to the
uncertainty  of the Company's  ability to utilize the deferred tax assets in the
future. Accordingly, neither a net overall asset nor a net overall liability was
reflected in the Company's consolidated financial statements.

Under current tax law, the Company's  ability to utilize certain tax benefits in
the future may be limited in the event of an  "ownership  change," as defined by
the Internal  Revenue Code Section 382 and the  regulations  thereunder.  In the
event  that the  Reorganization  in Note 1 were to be deemed to be an  ownership
change,  or if,  transactions in the Company's  capital stock  subsequent to the
Reorganization result in an ownership change, the subsequent  utilization of net
operating loss  carryforwards,  suspended  passive  activity losses and credits,
alternative  minimum tax credit  carryforwards and certain other built-in losses
would  be  subject  to  an  annual  limitation  as  prescribed  by  current  tax
regulations.  The application of this limitation could have a material effect on
the Company's ability to realize its deferred tax assets.  The Company is of the
view that no ownership  change of the Company will be deemed to have occurred as
a result of the Reorganization or otherwise. However, the application of Section
382  is  in  many  respects  uncertain.   In  assessing  the  effects  of  prior
transactions and of the  Reorganization  under Section 382, the Company has made
certain legal  judgments and certain  factual  assumptions.  The Company has not
requested or received  any rulings from the IRS with respect to the  application
of Section 382 to the  implementation  of the  Reorganization  and the IRS could
challenge the Company's determinations.

In the normal course of the Company's  business,  there are outstanding  various
claims, commitments and contingent liabilities.  The Company also is involved in
various other legal  proceedings  which have occurred in the ordinary  course of
business. Management, based on discussions with legal counsel, believes that the
Company will not be materially  affected by the actions of any outstanding legal
proceedings.  However,  there can be no  assurance  that any  outstanding  legal
proceedings  will not be decided  adversely  to the  Company and have a material
adverse  effect on the financial  condition and the results of operations of the
Company. See Note 6.



                                       11

<PAGE>


                                 RB Asset, Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2000
                             (Dollars in thousands)
                                   (Unaudited)


4.  Earnings per share

Earnings per share were based upon 7,100,000  weighted  average shares of Common
Stock  outstanding  during the three months ended  September  30, 2000 and 1999,
respectively. The Company had no securities outstanding that were convertible to
common stock at September 30, 2000 or 1999.


5.  Comprehensive Income

As of July 1, 1998, the Company  adopted  Statement of Accounting  Standards No.
130, "Reporting  Comprehensive  Income " ("SFAS-130").  SFAS-130 establishes new
rules for the reporting and display of comprehensive  income and its components.
However,  the adoption of this  Statement has had no effect on the Company's net
income or stockholders' equity.  SFAS-130 requires unrealized gains or losses on
the  Company's  available-for-sale  securities,  which  prior to  adoption  were
reported   separately  in  shareholders'   equity,   to  be  included  in  other
comprehensive  income. Prior year financial statements have been reclassified to
conform to the requirements of SFAS-130.

During the  quarters  ended  September  30, 2000 and 1999,  total  comprehensive
(loss) income was $88 and ($819),  respectively.  The following  table describes
the components of comprehensive income and accumulated  comprehensive income for
the dates indicated:

<TABLE>
<CAPTION>

         Components of Comprehensive Income
         (Unaudited):
                                                                  Three months ended September 30,

                                                                     2000                    1999
                                                               ----------------        -----------------
<S>                                                            <C>                      <C>
         Net (loss) income                                     $            (58)        $          (672)
         Unrealized gains (losses) on securities                            146                    (147)
         Comprehensive income (loss)                           $             88         $          (819)
                                                               ================        =================

         Components of Accumulated
         Comprehensive Income:

                                                               September 30,               June 30,
                                                                      2000                   2000

         Unrealized (losses) gains on securities                $         (982)         $        (1,128)
         Accumulated comprehensive (loss) income                $         (982)         $        (1,128)
                                                               ================        =================

</TABLE>

6.  Legal Proceedings

The Company is involved in various legal  proceedings  occurring in the ordinary
course  of  business.  Management  of the  Company,  based on  discussions  with
litigation  counsel,  believes  that such  proceedings  will not have a material
adverse  effect on the financial  condition or operations of the Company.  There
can be no assurance that any of the outstanding  legal  proceedings to which the
Company is a party will not be




                                       12

<PAGE>


                                 RB Asset, Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2000
                             (Dollars in thousands)
                                   (Unaudited)

decided adversely to the Company's  interests and have a material adverse effect
on the financial condition and operations of the Company.

By letter,  dated May 22,  1998,  counsel for  certain  holders of shares of the
Company's  Preferred Stock advised the Company that such holders objected to the
Reorganization.  Specifically,  such counsel alleged that the Reorganization (I)
constituted a  "liquidation"  of River Bank America in violation of the terms of
the certificate of designations of the Predecessor Preferred Stock by failing to
provide for the payment to the holders of the Predecessor Preferred Stock of the
liquidating  distribution  required by the certificate of designations of $25.00
per share, plus all accrued,  undeclared and unpaid dividends thereon,  (ii) was
illegal under the New York Banking Law (the "NYBL") which provides,  in the case
of a voluntary  liquidation,  that the liquidating  corporation shall distribute
its remaining assets among its shareholders according to their respective rights
and interests, (iii) violated a commitment made in River Bank's proxy statement,
dated May 13, 1996, to retire the Predecessor Preferred Stock following approval
and  finalization  of the sale of certain of its branches and assets to HSBC and
(iv) constituted a breach of duty owed by River Bank's Board of Directors to the
holders of the Predecessor Preferred Stock.

The Company believed such allegations were without merit.  However, in an effort
to resolve these claims on an amicable basis, representatives of the Company and
such  holders  had  discussed  from time to time since the date of such  letter,
certain proposals under which the Company would offer to exchange a new security
for the Company  Preferred  Stock.  In October,  1998,  the Company  proposed to
representatives  of such holders to effect an exchange offer upon  substantially
the terms and conditions of the Exchange  Offer. On October 27, 1998, 11 holders
of Company  Preferred Stock who claimed to  beneficially  own, in the aggregate,
849,000  shares  (approximately  60.6% of the  outstanding  shares)  of  Company
Preferred  Stock (the  "Organized  Group")  commenced a lawsuit  entitled Strome
Global  Income Fund et al. v. River Bank America et. al. ( the  "Complaint" ) in
Supreme Court of the State of New York,  County of New York, Index No. 605226198
(the "Action" ), against the Company, certain of its predecessors and certain of
its  directors  (collectively,  the  "Defendants").  The complaint in the Action
alleged  (the  "Allegations"),  among  other  things,  that  (I) the  Defendants
breached the certificate of designations  relating to the Predecessor  Preferred
Stock  by  fraudulently  transferring  assets  of River  Bank  and by  illegally
amending the  certificate  of  designations,  (ii) the  Defendants  fraudulently
conveyed  the  assets  of  River  Bank,  thereby  depriving  the  holders  of  a
liquidating distribution,  (iii) the Defendants violated the NYBL by liquidating
River Bank without making the liquidating  distribution required by the NYBL and
by denying  holders  appraisal  rights to which they were  entitled by the NYBL,
(iv) the Defendants  breached their  fiduciary duty to holders by depriving them
of their  liquidating  distribution,  (v) the defendants  breached their duty of
disclosure  by omitting from the Proxy  Statement  dated March 27, 1998 material
facts  relating to the holders'  rights to receive a  liquidating  distribution,
their appraisal rights for their shares and the requirement that holders vote as
a class with respect to the amendment of the certificate of  designations,  (vi)
the  Defendants'  implementation  of the  liquidation  of  River  Bank  and  the
amendment  of the  certificate  of  designations  were ultra vires and should be
declared void and (vii) the  intentionally  tortious  nature of the  Defendants'
conduct bars them from seeking indemnification for their actions and, therefore,
the Defendants  should be enjoined from seeking  indemnification  for damages or
attorney's fees relating to the action.

The Company  believes  that the  Allegations  are  without  merit and intends to
vigorously oppose the Action. Consequently, the Company and the other defendants
responded to the Action by filing a motion to dismiss on December 21, 1998 which
was argued before the court on March 23, 1999.  The court issued its decision on
December 2, 1999.  The court granted in part the Company's  motion and dismissed
the causes of action based upon fraudulent conveyance, breach of fiduciary duty,
breach of duty of  disclosure  and ultra vires acts and ordered the remainder of
the Action to continue.  Both the Plaintiffs  and the Defendants  have completed
discovery and filed motions for summary  judgement on June 29, 2000. The motions
remain pending before the court.



                                       13

<PAGE>



7.   Subsequent Events

On October 17, 2000,  one of the three  buildings in Kingston,  Atlanta was sold
for $8.2  million,  which was  received in cash.  As a result,  $3.8 million was
transferred  from real estate assets held for investment to real estate held for
disposal at September 30, 2000.


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

Financial Condition:

At September  30, 2000 the  consolidated  assets of the Company  totaled  $180.4
million,  an increase of $6.6 million,  or 3.8% as compared with total assets at
June 30, 2000 of $173.8 million.

Real estate held for investment, net of accumulated depreciation, increased $1.9
million,  or 1.9%,  from  $99.3  million at June 30,  2000 to $101.2  million at
September  30,  2000.  The increase in real estate held for  investment,  net of
accumulated  depreciation  at September 30, 2000 as compared with the balance at
June 30, 2000, was primarily attributable to funding for capital improvements of
$6.6  million,  partially  offset by  depreciation  charges  of  $604,000  and a
reclassification of $3.8 million to real estate held for disposal.

Real estate held for  disposal,  net of allowance  for fair market value reserve
under Statement of Accounting  Standards No. 121  (SFAS-121),  increased by $3.8
million at September 30, 2000 from the balance of $2.0 million at June 30, 2000.
The  increase in real estate held for disposal is  primarily  attributable  to a
reclassification  from real estate held for investments  pertaining to a pending
sale of real  estate.  Assets  categorized  as real estate held for  disposal at
September 30, 2000 are expected to be sold within the next twelve months.

Total loans  secured by real estate,  net of the related  allowance for possible
credit losses,  declined $11,000,  or .04%, from $26.24 million at June 30, 2000
to $26.23  million at  September  30, 2000.  The $11,000  decline in real estate
loans,  net,  during  the  quarter  ended  September  30,  2000,  was  primarily
attributable to the effects of normal scheduled principal repayments.

The Company's  allowance for possible  credit losses related to loans secured by
real estate  remained  unchanged at September 30, 2000 from the balance of $13.3
million at June 30, 2000. The Company's  allowance for possible credit losses is
maintained at a level which management  considers adequate based on its periodic
review of the  Company's  loans  secured by real estate  portfolios  and certain
individual loans, taking into consideration,  among other things, the likelihood
of repayment,  the diversity of the borrowers,  the type of loan, the quality of
the collateral, current market conditions and the associated risks. At September
30, 2000, the allowance for possible  credit losses was 33.71% of total loans as
compared to 33.7% at June 30, 2000.

Cash, due from banks and cash equivalents  increased by $701,000,  or 2.1%, from
$33.7  million at June 30, 2000 to $34.4  million at September  30, 2000.  Total
operating  revenues and available asset sales proceeds exceeded  scheduled asset
fundings  and the payment of  operating  expenses,  resulting in the increase in
unrestricted cash during the quarter ended September 30, 2000.

At  September  30, 2000,  HSBC had  restricted a total of $7.5 million in funds,
held on deposit at HSBC, in accordance with the terms of the Branch Sale and the
Facility  agreements.  HSBC  had  restricted  $7.5  million  at June  30,  2000.
Restricted  funds held by HSBC are not available to the Company for  settlements
of any of the Company's current obligations.  The restricted cash reserves arose
from the sale of assets which had served as primary or  supplemental  collateral
for the HSBC Facility.  The restricted cash held by HSBC is intended to serve as
substitute  collateral  for the  HSBC  Facility,  until  such  time as the  HSBC
Facility is reduced in accordance with the Company's  Asset  Management Plan and
the HSBC Facility Agreements. See "Liquidity and Capital Resources," below.

Borrowed Funds increased by $5.5 million, or 10.5%, from $52 million at June 30,
2000 to $57.5  million at  September  30,  2000.  This  increase  was  partially
attributable to additional  borrowing on the construction  loan facility of $6.2
million offset by a reduction of principal on the HSBC facility of $695,000.



                                       14

<PAGE>




Other  liabilities  totaled  $12.8 million at September 30, 2000, an increase of
$449,000,  or 3.6%,  from the June 30, 2000  balance of $12.4  million.  The net
increase in other  liabilities  during the quarter ended  September 30, 2000 was
primarily  related  to  additional  deposits  received,  increases  in  the  tax
provision  and  changes in  accounts  payable  due to timing.  This  increase is
partially offset by the  capitalization  of $518,000 in accrued interest payable
as additional  principal  Increasing Rate Junior  Subordinated Notes due 2006 on
July 15, 2000, in accordance with the terms of the Notes.  Primarily as a result
of this accrued  interest  capitalization,  atSeptember 30, 2000, the balance of
the Company's  Increasing Rate Junior  Subordinated  Notes due 2006 increased by
$568,000, or 4.5%, to $13.1 million, as compared with a balance of $12.5 million
at June 30, 2000.

During the three months ended  September 30, 2000,  total  stockholders'  equity
increased by $88,000, or 0.09%, to $96.9 million, as compared with $96.8 million
at June 30, 2000.  This  increase was due to the net loss recorded for the three
months ended  September  30, 200 in the amount of $58,000 and an increase in the
securities  valuation  account  (allowance for  unrealized  losses on marketable
securities) of $146,000.

The following  table  summarizes the calculation of the Company's book value per
share at September 30, 2000 and June 30, 2000.
<TABLE>
<CAPTION>

                                                          September 30,               June 30,
                                                              2000                      2000
                                                        -----------------         ----------------
<S>                                                     <C>                       <C>
Total stockholders' equity                              $      96,930,000         $     96,842,000

   Less: liquidation value of preferred stock
      ($25 per share issued and outstanding)                   23,444,000               23,444,000
                                                        -----------------         ----------------
Net stockholders' equity                                $      73,486,000         $     73,398,000
                                                        =================         ================
Total shares of Common Stock issued and
     outstanding                                                7,100,000                7,100,000
                                                        =================         ================
     Book value per share                               $         10.35            $       10.34
                                                        =================         ================
</TABLE>



Results of Operations:

General. The Company reported net loss attributable to common shares of $58,000,
or $(0.01) per basic and diluted share, for the three months ended September 30,
2000, an  improvement  of $614,000 as compared with a net loss  attributable  to
common  shares of  $672,000,  or $(0.09) per share,  for the three month  period
ended September 30, 1999.

The primary  reason for the increase in the Company's net operating  results for
the quarter  ended  September  30, 2000,  as compared to the same quarter in the
previous year, was the positive income effects of real estate sales transactions
in the quarter  ended  September  30, 2000,  which  resulted in the recording of
gains on asset  sales and loan  participations  totaling  $838,000.  During  the
quarter ended  September 30, 1999, the Company  recognized $ 0 in gains from the
sale of real estate.

In addition  to the effects of the  recorded  real  estate  transactions  in the
quarter  ended  September  30,  2000,  as compared  with the same quarter of the
previous  year,  interest  income  declined.  The decline in interest  income of
$213,000,  or 28.7%,  from $741,000 in the quarter ended  September 30, 1999, to
$528,000 during the same quarter of the current year, was primarily attributable
to full  satisfaction of loans,  prior to the current period,  which reduced the
average balance of loans held by the Company.

Partially offsetting the increases in income, cited above, for the quarter ended
September 30, 2000, as compared to the same quarter of the previous year, was an
increase  in  interest  expense of  $38,000.  Interest  expense  increased  from
$969,000 in the quarter ended September 30, 1999 to $1.0 million during the same
quarter  of the  current  year,  primarily  as the  result of the  effects of an
increase in subordinated notes payable. (see "Interest Expense," below).

                                       15

<PAGE>



Net Rental Operations. For the three months ended September 30, 2000, net rental
operations  resulted in income of  $844,000,  an increase of $98,000,  or 13.1%,
from  $746,000  for the same  three  month  period in the  previous  year.  This
increase was due to various, individually immaterial operating factors affecting
aggregate rental income and expenses within the Company's rental properties.

Net (Loss)  Gain on the Sale of Real  Estate  Assets.  A net gain on the sale of
real estate of $838,000 was recorded for the quarter  ended  September 30, 2000.
The Company did not  recognize  any gain on the sale of real estate for the same
period of the previous  year.  For the quarter  ended  September  30, 2000,  the
$838,000 net gain was attributable to the sale of residential units.

Interest  Income.  For the three months ended September 30, 2000, total interest
income was $528,000,  a decline of $213,000,  from $741,000 for the same quarter
in the previous year. Loan interest  declined  $235,000,  or 41%, in the quarter
ended  September  30,  2000,  as compared  with the same quarter in the previous
year,  due  to  reduced  average   balances  for  loan  assets   resulting  from
satisfactions and the effects of normal amortization and repayment activity.  In
addition,  other interest  income  increased  $22,000,  or 12.8%, in the quarter
ended  September 30, 2000 as compared with the quarter ended September 30, 1999.
The increase in other interest  income in the quarter ended  September 30, 2000,
as compared  with the same quarter in the previous  year,  was  primarily due to
increasing average cash balances.

Interest Expense.  During the three months ended September 30, 2000, the Company
recorded  interest  expenses  in the  amount of $1.0  million,  an  increase  of
$38,000,  or 3.9%, as compared  with  interest  expenses of $969,000 in the same
quarter of the  previous  year.  The  increase in interest  expense is primarily
attributable  the  recognition  of $318,000 in interest  expense  related to the
Company's  Increasing  Rate  Junior  Subordinated  Notes  due 2006,  which  were
initially issued in December 30, 1998.

During the quarter ended September 30, 2000, the Company  borrowed an average of
$47.8  million,  a decline of $2.8  million,  or 5.6%,  as compared with average
borrowings of $50.6 million  during the quarter  ended  September 30, 1999.  The
decline  in the  average  amount  of  borrowed  funds  was  attributable  to the
repayment of outstanding  obligations  which occurred in fiscal 2000,  primarily
funded by asset sales and loan  repayments.  The average  interest  rate paid to
HSBC on borrowed funds increased  slightly from 5.21% for the three months ended
September 30, 1999 to 5.25% for the same three month period in the current year.
The increase in rates paid to HSBC in the three month period ended September 30,
2000, as compared with the same periods in the previous  year, was primarily due
to an increase in  prevailing  interest  rates.  This average  interest  rate is
attributable  to the  renegotiation  of the  Company's  interest rate with HSBC.
Under the terms of the  renegotiated  interest rate agreements with HSBC,  which
became effective  October 1, 1998, the Company receives interest rate reductions
for  borrowed  funds,   calculated  using  a  formula  that  considers   certain
compensating balances held in bank accounts with HSBC. The interest expense rate
reductions  received under the new rate schedule agreement with HSBC are in lieu
of interest  income that had been earned on those  deposited  funds.  During the
quarter  ended  September  30, 2000 a reduction in interest  expense on borrowed
funds of approximately $407,000 was recognized.

Other  Expenses.  During the  quarter  ended  September  30,  2000,  the Company
recorded  total other  expenses in the amount of $1.03  million,  an increase of
$27,000,  or 2.6%, as compared  with other  expenses of $1.0 million in the same
quarter of the previous  year.  Other  expenses  increased in the quarter  ended
September  30, 2000,  as compared  with the quarter  ended  September  30, 1999,
primarily  as a result of  differences  in the timing of  certain  non-recurring
expense payments.

The Company engaged RB Management  Company,  LLC (the  "Management  Company") to
manage the  operations  of the  Company  after the Branch  Sale,  including  the
management and disposition of Company assets. The Management Company was a newly
formed,  privately-owned  entity controlled by Alvin Dworman,  who owns 39.8% of
the outstanding Common Stock of the Company.  During the quarter ended September
30,  2000,  the  Company  accrued  $600,000  in fees  payable to the  Management
Company, of which $7,900 related to fees incurred for the successful disposition
of assets.  During the quarter  ended  September 30, 1999,  the Company  accrued
$754,000 in fees payable to the Management Company, of which $176,000 related to
fees incurred for the successful  disposition  of assets.  At September 30, 2000
the Company had  accrued  fees  payable to the  Management  Company  aggregating
$245,000.


                                       16

<PAGE>



Provision for Income Taxes.  Statement of Financial Accounting Standards No. 109
(SFAS-109),  "Accounting for Income Taxes,"  requires the Company to recognize a
deferred  tax asset  relating  to the  unrecognized  benefit  for all  temporary
differences that will result in future tax deductions and for all unused NOL and
tax credit carryforwards, subject to, in certain circumstances, reduction of the
asset by a valuation allowance.  A valuation allowance is recorded if it is more
likely than not that some  portion or all of the  deferred tax asset will not be
realized  based on a review of available  evidence.  Realization of tax benefits
for deductible temporary differences and unused NOL and tax credit carryforwards
may  be  based  upon  the  future  reversals  of  existing   taxable   temporary
differences,  future taxable income exclusive of reversing temporary differences
and carryforwards,  taxable income in prior carryback years and, if appropriate,
from tax planning strategies.

The high  levels  of loan  charge-offs  and other  losses,  which  were  largely
responsible for losses during the periods, effectively eliminated federal income
tax liability for the quarters ended  September 30, 1998 and 1997. The Company's
income tax provision  includes  state and local taxes on the greater of combined
entire net income,  combined  alternative  entire net income or combined taxable
assets.  Certain  subsidiaries  provide  for state and local taxes on a separate
company  basis on income,  capital,  assets or an  alternative  minimum tax. The
provision  for income  taxes  differs  from the amount  computed by applying the
statutory  Federal income tax rate of 35% to the reported loss before  provision
for income taxes primarily due to state and local income and franchise taxes and
limitations on the recognition of tax benefits of net operating  losses.  During
the  quarters  ended  September  30, 2000 and 1999,  the Company  recorded a net
provision for income taxes of $226,000 and $182,000, respectively,  primarily to
reflect the effects of  operations  on its  current  state and local  income tax
liability at September 30, 2000 and 1999, respectively.


Liquidity and Capital Resources

The Company must maintain sufficient  liquidity to meet its funding requirements
for debt  repayments  related to asset sales,  operating  expenses,  development
costs  related to certain real estate  projects,  and to satisfy the  regulatory
requirements described below.

On January 31, 2000,  the Company  completed a  refinancing  of the  outstanding
balance of the existing HSBC Facility.  Under the terms of the  refinancing  the
principal  balance  was  reduced by $1.3 to $49.5  million  and the terms of the
refinancing  provide for  amortization  of the HSBC  Facility  over a term of 20
years and extended the maturity of the HSBC Facility  through  January 31, 2005.
The  HSBC  Facility  is  secured  by a  first  lien on two  properties,  certain
cooperative  shares  and a  restricted  cash  collateral  account  (the  Special
Collateral) in the amount of $7.5 million. Under the terms of the HSBC Facility,
HSBC has  retained the right to approve  declaration  or payment of dividends on
the Company's Preferred Stock as well as other capital transactions.

As a consequence of the  refinancing of the HSBC Facility,  all loan  collateral
under the previous Facility agreement, other than specified above, including all
cash balances held by HSBC in excess of the $7.5 million Special  Collateral was
released from all liens held by HSBC. Accordingly,  the balance of the Company's
unrestricted cash was increased $29.4 million by an offsetting  reduction in the
Company's restricted cash of $29.4 million,  from $36.9 million at September 30,
1999 to $7.5 million at September 30, 2000.

The HSBC  Facility has an annual  interest rate equal to the Prime lending rate,
or the three-month  London Interbank Offered Rate (LIBOR) plus 2%, at the option
of the Company.  Notwithstanding  the foregoing,  interest on the Facility shall
accrue at 2% per annum on the portion of the outstanding  Facility  balance that
is  equal  to the  combined  balances  of the  Special  Collateral  account  and
unrestricted funds that remain on deposit with HSBC.

The Company  will make  monthly  payments  to HSBC of  interest,  as  calculated
according to the formula  outlined  above,  and scheduled  principal  reductions
based  on a  hypothetical  loan  amount  of  $34.8  million.  Minimum  scheduled
principal  reduction  payments  under this  provision of the Facility  agreement
approximate $800,000 per year.




                                       17

<PAGE>



The Loan Agreement  requires that while any amounts remain outstanding under the
Facility,  the Company must receive HSBC's prior written consent to, among other
things,  materially  alter its charter or by-laws,  incur  additional  corporate
indebtedness and liens, make any distributions to stockholders or repurchases or
redemptions of capital  stock,  acquire  additional  assets,  exchange  existing
assets with a third party or assume  additional  liabilities  as a result of any
proposed merger transaction.

In order to facilitate the  development of the Company's  three-building  office
complex in Atlanta,  Georgia,  in May 2000 the Company  obtained  $23.5  million
construction loan facility (the "Construction Loan") financed by Bank of America
and secured by two buildings under  development  within this office complex.  At
September  30,  2000,  approximately  $9.9 million had been  advanced  under the
Construction  Loan, as compared with  approximately  $3.7 at June 30, 2000.  The
completion of the  development of this project is anticipated  prior to June 30,
2001. The Construction  Loan has an annualized rate equal to LIBOR plus 2% and a
maturity  date in May 2003.  The loan allows for the deferral of interest  until
May 2003 or such time as the collateral  buildings are disposed of through sale.
The Company has incurred approximately $41,000 in interest during the year ended
June 30, 2000 and an additional $147,000 during the three months ended September
30, 2000 related to the  Construction  Loan, which have been accounted for as an
additional investment in the office complex.

At  September  30,  2000,  the  Company  had $47.6  million  in  borrowed  funds
outstanding  under the Facility provided by HSBC Bank and $9.9 million under the
Construction Loan provided by Bank of America. The Company actively monitors and
manages its cash inflows and  outflows in the  management  of the Facility  with
HSBC and invests, to the extent possible, all available cash balances.

The  Company  seeks to maintain  liquidity  within a range of 5% to 10% of total
assets,  above that considered necessary to meet the projected cash requirements
of  endeavors  such as real estate  development.  Liquidity  for this purpose is
defined as  unrestricted  cash. At September 30, 2000,  the Company's  liquidity
ratio, as so defined, amounted to 19.06%.


Recent Accounting Developments

From time to time the  Financial  Accounting  Standards  Board  ("FASB")  adopts
accounting   standards   (generally  referred  to  as  Statements  of  Financial
Accounting  Standards,  or "SFASs") which set forth required  generally accepted
accounting  principles.  In addition,  other  regulatory  agencies,  such as the
Securities  Exchange  Commission  (the  "SEC" ), may  also,  from  time to time,
promulgate required generally accepted accounting principles. Set forth below is
a description of certain of the  accounting  standards  recently  adopted by the
FASB and the SEC  which  are  relevant  to  financial  institutions  such as the
Company.

SFAS No. 133 and No.  137.  On June 15,  1998,  the FASB  issued  SFAS No.  133,
"Accounting  for  Derivative  Instruments  and Hedging  Activities"  (SFAS-133).
SFAS-133 is  effective  for all fiscal  quarters of all fiscal  years  beginning
after June 15, 1999,  which was deferred  until June 30, 2000 as a result of the
promulgation of SFAS-137,  requires that all derivative  instruments be recorded
on the  balance  sheet  at  their  fair  value.  Changes  in the  fair  value of
derivatives are recorded each period in current earnings or other  comprehensive
income,  depending  on whether a  derivative  is  designated  as part of a hedge
transaction  and,  if it is, the type of hedge  transaction.  Management  of the
Company  anticipates  that,  due  to the  Company's  limited  use of  derivative
instruments,  the adoption of SFAS-133 does not have a significant effect on the
Company's results of operations or its financial condition.

Other Pronouncements.  In December, 1999, the Securities and Exchange Commission
(the "SEC") released Staff  Accounting  Bulletin No. 101,  "Revenue  Recognition
("SAB No.  101"),  to provide  guidance  on the  recognition,  presentation  and
disclosure  of  revenue  in  financial  statements.  Specifically,  SAB No.  101
provides  guidance on  lessors'  accounting  for  contingent  rent.  SAB No. 101
explains the SEC staff's general framework for revenue recognition.  SAB No. 101
does not change existing literature on revenue recognition, but rather clarifies
the SEC's  position on preexisting  literature.  SAB No. 101 did not require the
Company to change  existing  revenue  recognition  policies and therefore had no
impact on the Company's financial position or results of operations at September
30, 2000.  From time to time the Financial  Accounting  Standards Board ("FASB")
adopts accounting  standards  (generally  referred to as Statements of Financial
Accounting  Standards,  or "SFASs") which set forth required  generally accepted
accounting principles.



                                       18

<PAGE>


Impact of Inflation

The consolidated  financial  statements and related  consolidated data presented
herein have been  prepared in  accordance  with  generally  accepted  accounting
principles,  which require the  measurement of financial  position and operating
results in terms of historical  dollars  without  considering the changes in the
relative  purchasing  power of dollars over time due to  inflation.  The primary
impact of inflation on the  operations  of the Company is reflected in increased
operating  costs and,  generally,  increases in interest  rates paid on borrowed
funds. Over any given term,  however,  interest rates do not necessarily move in
the same  direction or in the same  magnitude as changes in prices for goods and
services.


Risks Associated with Forward-Looking Statements

This  Form  10-Q,  together  with  other  statements  and  information  publicly
disseminated by the Company, contains certain forward-looking  statements within
the  meaning of Section  27A of the  Securities  Act of 1933,  as  amended,  and
Section 21E of the  Securities  Exchange Act of 1934, as amended.  Such forward-
looking  statements  involve  known and unknown  risk,  uncertainties  and other
factors which may cause the actual  results,  performance or achievements of the
Company or industry results to be materially  different from any future results,
performance  or  achievements  expressed  or  implied  by  such  forward-looking
statements.  Such  factors  include,  among  others,  the  following,  which are
discussed  in greater  detail in the "Risk  Factors"  section  of the  Company's
Registration   Statement  on  Form  S-4  (File  No.   333-386730  and  File  No.
333-386730-01)  filed  with the  Securities  and  Exchange  Commission  ("SEC"),
general economic  conditions,  which will among other things,  affect demand for
commercial and residential  properties,  availability  and credit  worthiness of
prospective tenants,  lease rents and the availability of financing:  difficulty
of locating suitable investments; competition; risks of real estate acquisition,
development,  construction  and  renovation;  vacancies  at existing  commercial
properties; dependence on rental income from real property; adverse consequences
of debt financing; risks of investments in debt instruments,  including possible
payment  defaults and reductions in the value of  collateral;  liquidity of real
estate investments; lack of prior operating history; and other risks listed from
time to time in the  Company's  reports  filed with the SEC.  Therefore,  actual
results could differ materially from those projected in such statements.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

The primary market risk facing the Company is interest rate risk on its borrowed
funds, mortgage notes and notes receivable.  The Company does not hedge interest
rate risk using  financial  instruments  nor is the  Company  subject to foreign
currency risk.

The Company has assessed the market risk for its variable rate debt and believes
that a 1% increase in interest  rates (as measured by changes in the LIBOR rate)
would result in an approximate  $476,000  increase in interest  expense based on
approximately  $47.6 million  outstanding  at September  30, 2000.  See Note 14,
"Borrowed Funds," contained within the Consolidated Financial Statements at June
30, 2000.

In addition, the Company has issued $13.5 million in Increasing Rate Junior
Subordinated Notes due 2006. The Subordinated Notes provide for a steadily
increasing interest cost after December 15, 2001. A substantial increase in
general interest rates would potentially prevent the Company from refinancing
the Subordinated Notes at a rate favorable to the Company. See Note 24,
"Preferred Stock Exchange Offer," contained within the Consolidated Financial
Statements at June 30, 2000.

The fair value of the Company's long term debt, mortgage notes, notes receivable
and other financial  assets is estimated based on discounting  future cash flows
at interest rates that  management  believes  reflect the risks  associated with
long term debt,  mortgage notes,  notes receivable and other financial assets of
similar risk and duration.  See Note 22, "Fair Value of Financial  Instruments,"
within the Consolidated Financial Statements at June 30, 2000.



                                       19

<PAGE>



 PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

The Company is involved in various legal  proceedings  occurring in the ordinary
course  of  business.  Management  of the  Company,  based on  discussions  with
litigation  counsel,  believes  that such  proceedings  will not have a material
adverse  effect on the financial  condition or operations of the Company.  There
can be no assurance that any of the outstanding  legal  proceedings to which the
Company is a party will not be decided adversely to the Company's  interests and
have a material adverse effect on the financial  condition and operations of the
Company.

By letter,  dated May 22,  1998,  counsel for  certain  holders of shares of the
Company's  Preferred Stock advised the Company that such holders objected to the
Reorganization.  Specifically,  such counsel alleged that the Reorganization (I)
constituted a  "liquidation"  of River Bank America in violation of the terms of
the certificate of designations of the Predecessor Preferred Stock by failing to
provide for the payment to the holders of the Predecessor Preferred Stock of the
liquidating  distribution  required by the certificate of designations of $25.00
per share, plus all accrued,  undeclared and unpaid dividends thereon,  (ii) was
illegal under the New York Banking Law (the "NYBL") which provides,  in the case
of a voluntary  liquidation,  that the liquidating  corporation shall distribute
its remaining assets among its shareholders according to their respective rights
and interests, (iii) violated a commitment made in River Bank's proxy statement,
dated May 13, 1996, to retire the Predecessor Preferred Stock following approval
and  finalization  of the sale of certain of its branches and assets to HSBC and
(iv) constituted a breach of duty owed by River Bank's Board of Directors to the
holders of the Predecessor Preferred Stock.

The Company believed such allegations were without merit.  However, in an effort
to resolve these claims on an amicable basis, representatives of the Company and
such  holders  had  discussed  from time to time since the date of such  letter,
certain proposals under which the Company would offer to exchange a new security
for the Company  Preferred  Stock.  In October,  1998,  the Company  proposed to
representatives  of such holders to effect an exchange offer upon  substantially
the terms and conditions of the Exchange  Offer. On October 27, 1998, 11 holders
of Company  Preferred Stock who claimed to  beneficially  own, in the aggregate,
849,000  shares  (approximately  60.6% of the  outstanding  shares)  of  Company
Preferred  Stock (the  "Organized  Group")  commenced a lawsuit  entitled Strome
Global  Income Fund et al. v. River Bank America et. al. ( the  "Complaint" ) in
Supreme Court of the State of New York,  County of New York, Index No. 605226198
(the "Action" ), against the Company, certain of its predecessors and certain of
its  directors  (collectively,  the  "Defendants").  The complaint in the Action
alleged  (the  "Allegations"),  among  other  things,  that  (i) the  Defendants
breached the certificate of designations  relating to the Predecessor  Preferred
Stock  by  fraudulently  transferring  assets  of River  Bank  and by  illegally
amending the  certificate  of  designations,  (ii) the  Defendants  fraudulently
conveyed  the  assets  of  River  Bank,  thereby  depriving  the  holders  of  a
liquidating distribution,  (iii) the Defendants violated the NYBL by liquidating
River Bank without making the liquidating  distribution required by the NYBL and
by denying  holders  appraisal  rights to which they were  entitled by the NYBL,
(iv) the Defendants  breached their  fiduciary duty to holders by depriving them
of their  liquidating  distribution,  (v) the defendants  breached their duty of
disclosure  by omitting from the Proxy  Statement  dated March 27, 1998 material
facts  relating to the holders'  rights to receive a  liquidating  distribution,
their appraisal rights for their shares and the requirement that holders vote as
a class with respect to the amendment of the certificate of  designations,  (vi)
the  Defendants'  implementation  of the  liquidation  of  River  Bank  and  the
amendment  of the  certificate  of  designations  were ultra vires and should be
declared void and (vii) the  intentionally  tortious  nature of the  Defendants'
conduct bars them from seeking indemnification for their actions and, therefore,
the Defendants  should be enjoined from seeking  indemnification  for damages or
attorney's fees relating to the action.

The Company  believes  that the  Allegations  are  without  merit and intends to
vigorously oppose the Action. Consequently, the Company and the other defendants
responded to the Action by filing a motion to dismiss on December 21, 1998 which
was argued before the court on March 23, 1999.  The court issued its decision on
December 2, 1999.  The court granted in part the Company's  motion and dismissed
the causes of action based upon fraudulent conveyance, breach of fiduciary duty,
breach of duty of  disclosure  and ultra vires acts and ordered the remainder of
the Action to continue.  Both the Plaintiffs  and the Defendants  have completed
discovery and filed motions for summary  judgement on June 29, 2000. The motions
remain pending before the court.

                                       20

<PAGE>





Item 2.   Changes in Securities

None.


Item 3.   Defaults Upon Senior Securities

None.


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

None.


Item 5.   Other Information

None.


Item 6.   Exhibits and Reports on Form 8-K

None.



































                                       21

<PAGE>


 SIGNATURES

Pursuant to the requirements of Section 15(d) of the Securities  Exchange Act of
1934,  the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                            RB ASSET, INC.
                                           (Registrant)


Date: November 13, 2000     By:  /s/ Nelson L. Stephenson
      -----------------          ----------------------------

                                Nelson L. Stephenson
                                President and Chief Executive Officer (principal
                                executive and principal financial officer)






                                       22