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                                  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 March 31, 2001
                                        --------------

                                       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 May 11, 2001 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 May 11, 2001 was 937,277.


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<PAGE>




                                 RB ASSET, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                    FOR THE NINE MONTHS ENDED MARCH 31, 2001

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                             PAGE
                                                                                                             ----
INDEX

PART I.   FINANCIAL INFORMATION

          Item 1.   Financial Statements

<S>       <C>                                                                                                <C>
                        Consolidated Statements of Financial Condition as of March 31, 2001
                        (unaudited) and June 30, 2000............................................            1

                        Consolidated Statements of Operations for the three and nine months ended
                        March 31, 2001 and 2000 (unaudited)......................................            2

                        Consolidated Statements of Changes in Stockholders' Equity for the nine
                        months ended March 31, 2001 and 2000 (unaudited) ........................            3

                        Consolidated Statements of Cash Flows for the nine months ended March
                        31, 2001 and 2000 (unaudited)............................................            4

                        Notes to the Consolidated Financial Statements ..........................            6


          Item 2.   Management's Discussion and Analysis of Financial Condition
                    and the Results of Operations ...............................................           12

          Item 3.   Quantitative and Qualitative Disclosures About Market Risk...................           18

PART II. OTHER INFORMATION

          Item 1.   Legal Proceedings ..........................................................            19
          Item 2.   Changes in Securities ......................................................            20
          Item 3.   Defaults Upon Senior Securities ............................................            20
          Item 4.   Submission of Matters to a Vote of Securities Holders ......................            20
          Item 5.   Other Information ..........................................................            20
          Item 6.   Exhibits and Reports on Form 8-K ...........................................            20

SIGNATURE.......       ...       ...............................................................            21

</TABLE>


                                       -i-

<PAGE>




PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements

                                 RB ASSET, INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                        March 31, 2001 and June 30, 2000
                             (dollars in thousands)

<TABLE>
<CAPTION>

                                     Assets
                                                                              (Unaudited)
                                                                               March 31,           June 30,
                                                                                 2001               2000
                                                                                ------              ----
<S>                                                                      <C>                   <C>
Real estate assets:
Real estate held for investment, net of accumulated
   depreciation of $7,076 and $5,550, respectively                       $        106,886      $        99,321

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

Investments in joint ventures                                                       1,454                1,454
                                                                         -----------------    -----------------
     Total real estate assets                                                     110,340              102,775

Loans receivable:
      Secured by real estate                                                       32,284               32,339
      Commercial and consumer                                                       3,916                7,247
      Allowance for possible credit losses                                         (9,694)             (13,341)
                                                                         -----------------    -----------------
           Total loans receivable, net                                             26,506               26,245

Cash, due from banks and cash equivalents                                          32,390               33,666
Cash, due from banks - restricted                                                   7,500                7,500
Investment securities available for sale                                            1,125                1,170
Other assets                                                                        2,525                2,425
        Total Assets                                                     $        180,386      $       173,781
                                                                         =================     ================

                      Liabilities and Stockholders' Equity

Increasing Rate Junior Subordinated Notes due 2006                       $         13,735      $       12,527
Borrowed funds                                                                     54,274               52,033
Other liabilities                                                                  12,172               12,379
        Total Liabilities                                                          80,181               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, 937,277
issued and outstanding at March 31, 2001 and 937,777 issued and                       937                  938
outstanding at June 30, 2000)

Common stock par value $1 (30,000,000 shares authorized,
7,100,000 shares issued and outstanding at March 31, 2001
and June 30, 2000)                                                                  7,100                7,100

Additional paid in capital                                                        100,428              100,439
Accumulated deficit                                                                (7,087)             (10,507)
Accumulated comprehensive loss                                                     (1,173)              (1,128)
                                                                         -----------------    -----------------
        Total Stockholders' Equity                                                100,205               96,842

Total Liabilities and Stockholders' Equity                               $        180,386     $        173,781
                                                                         =================    =================

</TABLE>

See notes to Consolidated Financial Statements




                                        1

<PAGE>





                                 RB ASSET, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
              Three and Nine Months Ended March 31, 2001 and 2000
                 (dollars in thousands, except per share data)
                                  (Unaudited)

<TABLE>
<CAPTION>

                                                                    Three months ended                   Nine months ended
                                                                           March 31,                          March 31,
                                                                --------------------------------   --------------------------------
                                                                      2001              2000             2001             2000
                                                                ---------------   --------------   ---------------  ---------------
<S>                                                            <C>           <C>                  <C>             <C>
Revenue:
Rental revenue and operations:
         Rental income and other property revenue              $    4,772    $       3,698        $      13,211   $       11,493
         Property operating and maintenance expense                (2,836)          (2,682)              (8,489)          (8,181)
         Depreciation - real estate held for investment              (567)            (568)               (1,748)         (1,708)
                                                              ------------   --------------      ---------------  ---------------
     Net  rental operations                                          1,369              448                2,974            1,604

Net Gain on Sale of Real Estate                                        929              725                4,908            1,688

Interest income:
         Loans receivable                                              391              962                1,128            1,769
         Money market investments and other                            142              157                  524              503
                                                              ------------   --------------      ---------------  ---------------
              Total interest income                                    533            1,119                1,652            2,272

Other Income
      Gain on settlement of Branch Sale contingencies, net              --              500                   --              500
      Loss on satisfaction of loan assets                               --           (1,272)                  --            (841)
      Realization of contingent participation revenues                  --            2,400                   --            2,400
                                                              ------------   --------------      ---------------  ---------------
     Total other income                                                 --            1,628                   --            2,059
                                                              ------------   --------------      ---------------  ---------------
         Total revenues                                              2,831            3,920                9,534            7,623
                                                              ------------   --------------      ---------------  ---------------

Expenses:
   Interest expense:
         Increasing Rate Junior Subordinated Notes due 2006            317              299                  956              879
         Borrowed funds                                                437              558                1,649            1,762
         Other                                                           5              (10)                   8               --
                                                              ------------   --------------      ---------------  ---------------
              Total interest expense                                   759              847                2,613            2,641

   Other expenses:
         Salaries and employee benefits                                 74               61                  197              160
         Legal and professional fees                                   211              340                  871              883
         Management fees                                               597              579                1,783            1,735
         Other                                                          47              113                   125             350
                                                              ------------   --------------      ---------------  ---------------
              Total other expenses                                     929            1,093                2,976            3,128

         Total expenses                                              1,688            1,940                5,589            5,769
                                                              ------------   --------------      ---------------  ---------------


Income (loss) before provision for income taxes                      1,143             1980                3,945            1,854

Provision for income taxes                                             175              348                  525              711
                                                              ------------   --------------      ---------------  ---------------

Net income (loss)                                                      968            1,632                3,420            1,143

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

Net income (loss) applicable to common stock                   $       968     $      1,632        $       3,420    $      1,143
                                                              ============   ==============      ===============  ===============

Basic and diluted income (loss) per common share               $      0.14     $       0.23        $        0.48    $       0.16
                                                              ============   ==============      ===============  ===============

</TABLE>

See notes to Consolidated Financial Statements


                                        2

<PAGE>




                                 RB ASSET, INC.
                      CONSOLIDATED STATEMENTS OF CHANGES IN
                        STOCKHOLDERS' EQUITY Nine months
                          ended March 31, 2001 and 2000
                             (dollars in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                       Series A
                                       Non-
                                       cumulative
                                       Perpetual                Additional                      Accumulated           Total
                                       Preferred      Common      Paid-in       Retained       Comprehensive     Stockholders'
                                       Stock          Stock       Capital       Earnings       Income (Loss)        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 income for the nine months
ended March 31, 2000                           --         --            --         1,143               --            1,143

Preferred stock dividends payable              --         --            --            --               --               --


Change in comprehensive income
resulting from changes in unrealized
loss on securities available-for-sale          --         --            --            --              (34)             (34)
                                       -----------  ---------  ------------  -------------   --------------    -------------
Balances at March 31, 2000             $      938   $  7,100   $   100,439   $    (9,814)     $    (1,038)      $   97,625
                                       ===========  =========  ============  =============   ==============     ============

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

Net income for the nine months
ended March 31, 2001                           --         --            --         3,420               --            3,420

Reduction in Stockholders' Equity              (1)        --           (11)           --               --              (12)
resulting from Preferred Stock
Exchange Offer

Change in comprehensive income
resulting from changes in unrealized
loss on securities available-for-sale          --         --            --            --              (45)             (45)
                                       -----------  ---------  ------------  -------------   --------------    -------------
Balances at March 31, 2001             $      937   $  7,100   $   100,428   $    (7,087)     $    (1,173)      $  100,205
                                       ===========  =========  ============  =============   ==============    ============

</TABLE>


See notes to Consolidated Financial Statements



                                        3

<PAGE>




                                 RB ASSET, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        Nine Months Ended March 31, 2001
                             (dollars in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                    Nine months ended
                                                                                        March 31,
                                                                            --------------------------------
                                                                                   2001            2000
                                                                            ----------------  --------------
<S>                                                                          <C>                <C>
Operating Activities:
Cash flows provided by Operating Activities:
  Net income                                                                 $        3,420     $     1,143
  Adjustments to reconcile net income to cash provided by/(used in)
         operating activities:
      Net gain on sale of real estate assets                                         (4,908)         (1,688)
      Net loss on satisfaction of loan assets                                            --             841
      Depreciation and amortization                                                   1,748           1,708
      Amortization of capitalized issuance costs and accretion of
         issuance discount - Increasing Rate Junior Subordinated Notes
         due 2006                                                                       136             116
  Change in operating assets and liabilities:
      Net increase in accrued interest receivable                                       (74)           (293)
      Increase in accrued interest payable, net of accrued interest
         payable capitalized as additional principal - Increasing Rate                  878             683
         Junior Subordinated Notes due 2006
      Net increase/(decrease) in accrued income taxes                                   208              (3)
      Net decrease in accrued expenses and other liabilities                           (422)         (2,643)
      Net (increase)/decrease in prepaid expenses and other assets                      (26)          1,546
      Cash effect of increases in allowance for possible credit losses                   --              74
                                                                            ----------------  --------------
            Net cash provided by operating activities                                   960           1,484
                                                                            ----------------  --------------

Investing Activities:
Cash flows (used in)/provided by Investing Activities:
  Net repayment of loans secured by real estate                                          51          16,397
  Net (origination)/repayment of commercial and consumer loans                         (367)            508
   Proceeds from partnership distributions - investments in
     joint ventures                                                                      --              82
  Proceeds related to sales of real estate held for investment                       11,621           2,478
  Additional fundings on real estate held for investment                            (15,781)         (6,335)
                                                                            ----------------  --------------
            Net cash (used in)/provided by investing activities                      (4,476)         13,130
                                                                            ----------------  --------------

</TABLE>


(Continued on next page)


See notes to Consolidated Financial Statements



                                        4

<PAGE>





                                 RB ASSET, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        Nine Months Ended March 31, 2001
                             (dollars in thousands)
                                   (Unaudited)

(Continued from previous page)

<TABLE>
<CAPTION>

                                                                                    Nine months ended
                                                                                        March 31,
                                                                            --------------------------------
                                                                                   2001            2000
                                                                            ----------------  --------------
<S>                                                                          <C>                <C>
Financing Activities:
Cash flows provided by Financing Activities:
  Decrease in restricted cash                                                        --              5,855
  Proceeds from borrowed funds                                                     8,719                --
  Repayment of borrowed funds                                                     (6,479)           (1,928)
                                                                           --------------   --------------
            Net cash provided by financing activities                              2,240             3,927
                                                                           --------------   ---------------

Net (decrease)/increase in cash, due from banks and cash                          (1,276)           18,541
equivalents

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

Cash, due from banks and cash equivalents, end of period                    $     32,390     $      33,321
                                                                           ==============   ===============



Supplemental Disclosure of Cash Flow Information
Cash paid for:
      Interest                                                              $      1,669     $       2,829
      Federal, state and local taxes                                                 439               758

Supplemental Disclosure of Non-cash Transactions
Accrued interest capitalized as additional principal - Increasing
Rate Junior Subordinated Notes due 2006                                     $      1,060     $         994



</TABLE>




See notes to Consolidated Financial Statements

                                        5

<PAGE>


                                 RB ASSET, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2001
                              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 fiscal year ended June 30, 1998, 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 nine months ended March 31, 2001

On May 22, 1998, under a plan that was approved by its 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.





                                        6

<PAGE>


                                 RB ASSET, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2001
                              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.
The  Management  Company was engaged  pursuant to a  Management  Agreement  (the
"Management  Agreement")  with an initial  term  expiring on June 30,  2001.  In
December  2000,  the Board of  Directors of the Company  renewed the  Management
Agreement for an additional  term of five years on essentially  similar terms as
the initial Management Agreement.

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.

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.  The  Facility  has been  reduced by  repayment  activity to $38.2
million at March 31, 2001.

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  March 31,  2001.  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,  until otherwise  notified,  the
approval  necessary to declare or pay dividends on the Company  Preferred  Stock
will not be provided.  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 nine months  ended March 31,  2001,  the Company  reported net income
applicable  to common  shares of $3.4  million or $0.48 per  share.  Significant
factors  contributing to the Company's  operating results during this nine month
period  include  rental income from real estate  operations of $13.2 million and
gains on the sale of real  estate  of $4.9  million,  partially  offset  by real
estate  property and maintenance  expenses of $8.5 million,  a net interest loss
(interest expense on borrowed funds in excess of interest income



                                        7

<PAGE>


                                 RB ASSET, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2001
                              dollars in thousands)
                                   (Unaudited)


from  loan  assets)  of  $521,000,   other   operating   expenses  of  $125,000,
depreciation  expenses  of $1.7  million  and  provision  for  income  taxes  of
$525,000.


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 March 31, 2001, the results
of its  operations  for the three and nine months  ended March 31, 2001 and 2000
and the statements of changes in stockholders'equity and cash flows for the nine
months  ended March 31,  2001 and 2000.  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 March
31, 2001,  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,  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 position
as of March 31, 2001,  the results of  operations  for the three and nine months
ended March 31,  2001 and 2000,  and  changes in  stockholders'  equity and cash
flows for the nine months ended March 31, 2001 and 2000.

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 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, where applicable,  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 March 31, 2001, the balance of stockholders'
equity  included  a  cumulative  $1.17  million  unrealized  loss on  marketable
securities classified as available-for-sale.

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.



                                        8

<PAGE>


                                 RB ASSET, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2001
                              dollars in thousands)
                                   (Unaudited)


At March 31,  2001,  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  $175,000,  during the  quarter
ending March 31, 2001.

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,
which have a maturity date of three months or less from the date of purchase.

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


3.  Commitments and Contingencies

At March 31,  2001,  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.


4.  Earnings per share

Earnings per share were based upon 7,100,000  weighted  average shares of Common
Stock  outstanding  during the three and nine  months  ended  March 31, 2001 and
2000,  respectively.  The  Company  had  no  securities  outstanding  that  were
convertible to common stock at March 31, 2001 or 2000.



                                        9

<PAGE>


                                 RB ASSET, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2001
                              dollars in thousands)
                                   (Unaudited)


5.  Comprehensive Income

During the three  months  ended  March 31,  2001 and 2000,  total  comprehensive
income was $833,000 and $1.7 million, respectively. During the nine months ended
March 31, 2001 and 2000,  total  comprehensive  income was $3.4 million and $1.1
million,   respectively.   The  following  table  describes  the  components  of
comprehensive  income  and  accumulated   comprehensive  income  for  the  dates
indicated:


         Components of Comprehensive Income (Loss)
         (Unaudited):
<TABLE>
<CAPTION>

                                                                       Three months ended March 31,
                                                                        2001                     2000
                                                                  -----------------        ----------------
<S>                                                               <C>                       <C>
         Net income                                                 $          968          $        1,632
         Unrealized (loss)/gain on securities                                 (135)                    135
                                                                  -----------------        ----------------
         Comprehensive income                                       $          833          $        1,767
                                                                  =================        ================

                                                                        Nine months ended March 31,
                                                                        2001                     2000
                                                                  -----------------        ----------------

         Net income                                                 $        3,420          $        1,143
         Unrealized losses on securities                                       (45)                    (34)
                                                                  -----------------        ----------------
         Comprehensive income                                       $        3,375          $        1,109
                                                                  =================        ================

         Components of Accumulated Comprehensive
         Income (Unaudited):
                                                                      March 31,               March 31,
                                                                        2001                     2000

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

         Unrealized loss on securities                              $       (1,173)         $       (1,038)
                                                                  -----------------        ----------------
         Accumulated comprehensive loss                             $       (1,173)         $       (1,038)
                                                                  =================        ================

</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 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



                                       10

<PAGE>


                                 RB ASSET, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2001
                              dollars in thousands)
                                   (Unaudited)


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.





                                       11

<PAGE>



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

Financial Condition:

At March 31,  2001,  the  consolidated  assets  of the  Company  totaled  $180.4
million,  an increase of $6.6  million,  or 3.8%, as compared with the Company's
total assets at June 30, 2000.

Real estate held for investment, net of accumulated depreciation, increased $7.6
million, or 7.6%, from $99.3 million at June 30, 2000 to $106.9 million at March
31, 2001.  The increase in real estate held for  investment,  net of accumulated
depreciation  at March 31, 2001,  as compared with the balance at June 30, 2000,
is primarily due to asset fundings for capital improvements and/or developmental
activities of $13.2  million,  partially  offset by reductions in carrying value
attributable to sales of $3.9 million and depreciation charges of $1.7 million.

Real estate held for  disposal,  net of allowance  for fair market value reserve
under Statement of Accounting  Standards No. 121 (SFAS-121),  remained unchanged
at March 31,  2001,  from the  balance  of $2.0  million at June 30,  2000.  The
balance  categorized  as real  estate  held for  disposal  at March 31, 2001 are
apartment  units and 1-4 family  housing  units  which are  expected  to be sold
within the next twelve months.

Total loans, net of related  allowance for possible credit losses,  increased by
$261,000,  or 1%, from $26.24 million at June 30, 2000 to $26.5 million at March
31, 2001. The $261,000 increase in loans secured by real estate, during the nine
months ended March 31, 2001, was primarily  attributable to the origination of a
$900,000  commercial  real estate  loan,  offset by normal  scheduled  principal
repayments.

The Company's allowance for possible credit losses decreased by $3.6 million, or
27.34%,  from $13.3  million at June 30, 2000 to $9.7 million at March 31, 2001.
This decrease in loan loss  reserves was  proportionate  with the  corresponding
decrease in Commercial and Consumer loans,  which represented the write off of a
fully  reserved  Commercial  Loan 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 March 31, 2001,  the allowance for possible  credit losses was 26.8% of loans
outstanding, as compared to 33.7% at June 30, 2000.

Cash, due from banks and cash equivalents  decreased by $1.28 million,  or 3.8%,
from $41.2  million at June 30,  2000 to $39.9  million at March 31,  2001.  The
decrease in cash, due from banks and cash equivalents was primarily attributable
to the  voluntary  debt  reduction  payment to HSBC of $7.5 million  offset by a
positive  cash flow from total  operating  revenues  and  available  asset sales
proceeds less scheduled asset fundings and the payment of operating expenses.

At March 31, 2001, HSBC had restricted a total of approximately  $7.5 million in
funds,  held on deposit at HSBC,  in  accordance  with the terms of the modified
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 $2.2 million or 4.31% from $52 million at June 30,
2000  to  $54.2  million  at  March  31,  2001.   This  increase  was  primarily
attributable  to the additional  borrowing of $12.4 million on the  construction
loan  facility,  partially  offset by regular  scheduled  debt  payments of $2.6
million and a voluntary debt reduction payment of $7.6 million.

The carrying amount of the Company's  Increasing Rate Junior  Subordinated Notes
due 2006  increased $1.2 million,  or 9.64%,  to $13.7 million at March 31, 2001
from $12.5  million at June 30, 2000.  This  increase was  primarily  due to the
addition of $1.1 million in accrued interest payable to the principal balance of
the Subordinated Notes during the nine months ended March 31, 2001.



                                       12

<PAGE>



During  the nine  months  ended  March  31,  2001,  total  stockholders'  equity
increased by $3.3 million,  or 3.5%, to $100.2  million,  as compared with $96.8
million at June 30, 2000.  This  increase was due to the net income for the nine
months  ended March 31, 2001 in the amount of $3.4 million and a decrease in the
securities  valuation  account  (allowance for  unrealized  losses on marketable
securities) of $45,000.


The following  table  summarizes the calculation of the Company's book value per
share at March 31, 2001 and June 30, 2000.

<TABLE>
<CAPTION>


                                                            March 31,                 June 30,
                                                              2001                      2000
                                                        -----------------         ----------------

<S>                                                     <C>                       <C>
Total stockholders' equity                              $     100,205,000         $     96,842,000

   Less: liquidation value of preferred stock
      ($25 per share issued and outstanding)                   23,432,000               23,444,000
                                                        -----------------         ----------------
Net stockholders' equity                                $      76,773,000         $     73,073,000
                                                        =================         ================

Total shares of Common Stock issued and
     outstanding                                                7,100,000                7,100,000
                                                        =================         ================

     Book value per share                                 $         10.81           $        10.30
                                                        =================         ================


</TABLE>





Results of Operations:

General.  The  Company  reported  net income  attributable  to common  shares of
$968,000, or $0.14 per basic and diluted share, for the three months ended March
31, 2001, a decrease of $670,000,  compared with the net income  attributable to
common  shares of $1.6  million,  or $.23 per share,  for the three month period
ended March 31, 2000.  The Company  reported net income  attributable  to common
shares of $3.4  million,  or $0.48 per basic  and  diluted  share,  for the nine
months  ended March 31,  2001,  an increase of $2.3  million  compared  with net
income  attributable to common shares of $1.14 million,  or $0.16 per share, for
the nine month period ended March 31, 2000.

The primary reasons for the decrease in the Company's net operating  results for
the  quarter  ended  March 31,  2001,  as  compared  to the same  quarter in the
previous  year,  were (1) the  realization  of $2.4 million in  contingent  loan
participation  revenues  during the quarter  ended March 31,  2000,  and (2) the
recognition  of a $500,000 net gain on settlement  of Branch Sale  contingencies
and the  Company's  compensating  balance  interest  claims with HSBC which were
offset by a $1.3 million loss on  satisfaction of loan assets during the quarter
ended March 31, 2000.  In addition,  there was a decrease in interest  income of
$590,000 for the quarter ended March 31, 2001 as compared to the same quarter in
the previous year.  Partially offsetting these reasons for a reduction in income
for the quarter  ended March 31, 2001 as compared  with the same  quarter of the
previous  year is an increase in net income from rental  operations  of $900,000
and an increase  in net gain on the sale of real  estate of $200,000  during the
quarter  ended March 31, 2001.  In  addition,  there was a reduction in interest
expense of $90,000,  a decrease in other expenses of $160,000 and a reduction in
the  provision for income taxes of $170,000 for the quarter ended March 31, 2001
as compared with the same quarter in the previous year.

The primary reasons for the increase in the Company's net operating  results for
the nine months ended March 31, 2001,  as compared to the same nine month period
of the previous  year were an increase in net revenue from rental  operations of
$1.4 million and the effects of increased sales and net gains on dispositions of
Real Estate held for sale which  increased  $3.2 million.  Partially  offsetting
these  factors is a decrease of  $600,000 in interest  income for the nine month
period  ended  March 31,  2001 to $1.6  million  from $2.2  million for the same
period of the  previous  year.  Other  expenses  were  reduced by  $152,000  and
provision for income taxes

                                       13

<PAGE>



was reduced by $186,000  for the nine month period  ending  March 31,  2001,  as
compared  with the same quarter of the  previous  year.  In addition,  there was
other income of $2 million  recognized in the nine month period ending March 31,
2000 and none in the nine month period ending March 31, 2001.

Net Rental  Operations.  For the three months  ended March 31, 2001,  net rental
operations  resulted in income of $1.3  million,  an increase of $912,000,  from
$448,000  for the same three month  period in the  previous  year.  For the nine
months ended March 31, 2001,  net rental  operations  resulted in income of $2.9
million, an increase of $1.3 million from the $1.6 million recorded for the same
nine month period in the  previous  year.  The increase in net rental  operating
revenue for the three and nine month  periods  ended March 31, 2001, as compared
with the same periods in the previous  year,  were due to various,  individually
immaterial  operating  factors  affecting  aggregate  rental income and expenses
within the Company's rental properties.

Net Gain on the Sale of Real Estate. Net gain on sale of real estate of $929,000
was realized for the quarter ended March 31, 2001,  an increase of $204,000,  or
28.2%,  as  compared  with net gains on sale of real  estate of  $725,000 in the
quarter ended March 31, 2000. For the quarter ended March 31, 2001, the $929,000
net gain was  attributable  to sales of  apartment  units,  categorized  as real
estate held for disposal,  in the amount of $1.2 million,  for which the gain of
$929,000 was recognized.

Net gain on the sale of real estate was $4.9  million for the nine months  ended
March 31, 2001,  an increase of $3.3 million as compared with a net gain of $1.6
million in the nine months ended March 31, 2000. For the nine month period ended
March 31,  2001,  there was a gain on real  estate held for  investment  of $7.5
million,  offset by the cost of a $2.5 million  construction  warranty liability
settlement,  net of recoveries for related insurance coverage. The resulting net
gain of $5 million was primarily attributable to the sale of $11 million of real
estate held for investment which had a carrying value of $3.6 million.  Included
in the sale of $11  million  was $3  million  which was  related  to the sale of
cooperative and condominium units at two of the Company's  multi-family  housing
projects  with a carrying  value of $600,000,  for which a gain in the amount of
$2.4 million was recognized and the sale of one of three  buildings of an office
complex real estate investment in Atlanta, GA for approximately $8 million which
had a  carrying  value  of $3  million  for  which  a  gain  of $5  million  was
recognized.

Interest  Income.  For the three  months ended March 31,  2001,  total  interest
income was  $533,000,  a  decrease  of  $586,000,  or 52.4%,  from $1.1  million
recorded for the same  quarter in the previous  year.  Loan  interest  decreased
$571,000,  or 59.4%,  from  $962,000  in the  quarter  ended  March 31,  2000 to
$391,000 for the same quarter in the current year. This decline in loan interest
income  was due to reduced  average  balances  for loan  assets  resulting  from
satisfactions and the effects of normal amortization and repayment activity.

For the nine  months  ended  March 31,  2001,  total  interest  income  was $1.6
million, a decrease of $620,000,  or 27.29%,  from the $2.3 million recorded for
the same nine months in the previous year. Loan interest decreased $641,000,  or
36.24%,  from $1.8  million  in the nine  months  ended  March 31,  2000 to $1.1
million for the same quarter in the current year.  This decline in loan interest
income  is due to  reduced  average  balances  for loan  assets  resulting  from
satisfactions and the effects of normal amortization and repayment activity.

Partially  offsetting  the decrease in loan  interest  income in the nine months
ended  March  31,  2001,  as  compared  with the same nine  month  period in the
previous year,  there was an increase in other interest  income to $524,000,  an
increase  of  $21,000,  or 4.17%,  as  compared  with other  interest  income of
$503,000 recorded in the nine month period ended March 31, 2000. The increase in
other  interest  income was due to an increase  in the average  balance of funds
held in  interest-bearing  money  market  accounts  during the nine month period
ended March 31, 2001 as compared with the same period in the previous year.

Interest  Expense.  During the three months  ended March 31,  2001,  the Company
recorded interest expense in the amount of $759,000,  a decrease of $88,000,  or
10.4%, as compared with interest  expense of $847,000 in the same quarter of the
previous year. Interest expense for borrowed funds decreased $121,000, or 21.6%,
from  $558,000  in the quarter  ended  March 31,  2000 to $437,000  for the same
quarter in the current  year.  During the nine months ended March 31, 2001,  the
Company recorded interest expense in the amount of $2.61 million,  a decrease of
$28,000 as  compared  with  interest  expense of $2.64  million in the same nine
month period of the previous year. Interest expense for borrowed funds decreased
$113,000,  or 6.4%,  from $1.76  million in the quarter  ended March 31, 2000 to
$1.65 million for the same quarter in the current year.

                                       14

<PAGE>



The decrease in interest expense on borrowed funds for both the quarter and nine
month period ending March 31, 2001 was primarily  attributable  to the declining
principal  balance due to regular loan  repayments,  repayments  funded by asset
sales and a voluntary loan repayment of $7.5 million.  This decrease in interest
expense on  borrowed  funds was  partially  offset by an  increase  in  interest
expense on  Increasing  Rate Junior  Subordinated  Notes,  due to an  increasing
principal balance.

During the three months ended March 31, 2001, the Company borrowed an average of
$38.7  million,  a decline of $10.9  million,  or 22%, as compared  with average
borrowings of $49.6 million  during the three month period ended March 31, 2000.
During the nine months ended March 31, 2001, the Company  borrowed an average of
$42.1  million,  a decline of $8  million,  or 16%,  as  compared  with  average
borrowings of $50.1  million  during the nine month period ended March 31, 2000.
The decline in the  average  amount of borrowed  funds was  attributable  to the
regular loan repayments,  repayments  funded by asset sales and a voluntary loan
repayment of $7.5 million.

The average  interest rate paid to HSBC on borrowed funds was 3.55% and 4.2% for
the three and nine months  ended March 31,  2001,  respectively,  as compared to
4.50% and 4.69%, respectively,  for the same three and nine month periods of the
previous  year.  The  decline  in rates paid to HSBC in the three and nine month
periods  ended March 31, 2001, as compared with the same periods in the previous
year, was primarily due to the reduced  principal  balance along with a decrease
in prevailing interest rates.

Other  Expenses.  During the quarter ended March 31, 20001 the Company  recorded
total other expenses in the amount of $929,000, a decrease of $164,000,  or 15%,
as compared with the same quarter of the previous  year.  During the nine months
ended March 31, 2001, the Company recorded total other expenses in the amount of
$3.0 million, a decrease of $152,000,  or 4.86%, as compared with other expenses
of $3.1  million  in the same nine  month  period of the  previous  year.  Other
expenses decreased in the nine months ended March 31, 2001, as compared with the
nine months ended March 31, 2000,  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 three and nine months
ended  March  31,  2001,  the  Company   accrued   $611,000  and  $1.9  million,
respectively  in fees payable to the  Management  Company,  of which $13,400 and
$93,600,  respectively,  related to fees incurred for the successful disposition
of assets.  During the three and nine months ended March 31,  2000,  the Company
accrued  $657,000  and  $2.0  million,  respectively  in  fees  payable  to  the
Management Company, of which $78,000 and $269,000, respectively, related to fees
incurred for the successful disposition of assets.

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 three and nine months  ended  March 31,  2001,  the  Company  recorded a net
provision  for income taxes of $175,000 and $525,000,  respectively.  During the
three and nine months ended March 31, 2000, the Company recorded a net provision
for income taxes of $348,000 and $711,000, respectively. Income taxes

                                       15

<PAGE>



recorded by the Company  primarily  reflect  the  effects of  operations  on its
current  state and  local  income  tax  liability  at March  31,  2001 and 2000,
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 and 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.

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.

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
March  31,  2001,  approximately  $16.1  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  $670,000 during the nine months ended March 31,
2001  related to the  Construction  Loan,  which have been  accounted  for as an
additional investment in the office complex.

At March 31, 2001 the Company had $38.2  million in borrowed  funds  outstanding
under  the  Facility   provided  by  HSBC  Bank  and  $16.1  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 the range of 5% to 10% of total
assets, with amounts above that level considered necessary to meet the projected
cash  requirements  of  new  investments  and  endeavors  such  as  real  estate
developments.  Liquidity  for this purpose is defined as  unrestricted  cash. At
March 31,

                                       16

<PAGE>



2001,  the Company's  liquidity  ratio,  as so defined,  amounted to 18%,  which
exceeded the minimum requirements of the targeted maintenance range.


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.  Set forth  below is a  description  of  certain  of the
accounting  standards  recently  adopted  by the  FASB  which  are  relevant  to
financial institutions such as the Company.

FASB Interpretation No. 43, "Real Estate Sales," interprets and amends Statement
of Financial  Accounting  Standards No. 66 (SFAS-66),  "Accounting  for Sales of
Real  Estate."  FASB  Interpretation  No. 43 states  that the sales  recognition
criteria of SFAS-66 should apply to land and physical structures attached to the
land  (for  instance,  property  improvements  or  integral  equipment  such  as
manufacturing  facilities)  that cannot be removed and used  separately  without
incurring  significant  cost.  FASB  Interpretation  No. 43 is effective for all
sales of real estate with property  improvements or integral  equipment  entered
into after June 30,  1999.  Management  has  evaluated  the  provisions  of this
Interpretation and has concluded that the adoption of this  Interpretation  will
have no material  effect on the Company's  results of  operations  and financial
condition.



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;  illiquidity 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.




                                       17

<PAGE>




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  $382,600  increase in interest  expense based on
approximately  $38.2  million  outstanding  at  March  31,  2001.  See  Note 14,
"Borrowed Funds," contained within the Consolidated  Financial  Statements dated
June 30, 2000.

In addition,  the Company has issued  $14.1  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  27,
"Preferred   Stock  Exchange  Offer"  and  Note  24,   "Increasing  Rate  Junior
Subordinated  Notes," 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.



                                       18

<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.

                                       19

<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.


                                       20

<PAGE>


                                    SIGNATURE

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.

<TABLE>
<CAPTION>

                                                      RB ASSET, INC.
                                                      (Registrant)


<S>                                <C>
Date: May 11, 2001                  By:      /s/ Nelson L. Stephenson
      ------------                          ---------------------------------

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

</TABLE>





                                       21

<PAGE>