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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 September 30, 1999

                                       OR

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

     For the Transition Period From ___________ To _______________

                        Commission file number 333-38673

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

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


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

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


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



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



The  number  of  shares  of the  Registrant's  Common  Stock,  $.01  par  value,
outstanding as of November 15, 1999 was  7,100,000.  The number of shares of the
Registrant's 15% Non-cumulative  Perpetual  Preferred Stock,  Series A, $.01 par
value, outstanding as of November 15, 1999 was 937,777.

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<PAGE>




                                 RB ASSET, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999




                                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
                       September 30, 1999 (unaudited) and June 30, 1999..................  1

                       Consolidated  Statements  of  Operations  for  the  three
                       months    ended    September    30,    1999    and   1998
                       (unaudited).......................................................  2

                       Consolidated   Statements  of  Changes  in  Stockholders'
                       Equity for the three months ended  September 30, 1999 and
                       1998 (unaudited) .................................................  3

                       Consolidated  Statements  of Cash  Flows  for  the  three
                       months    ended    September    30,    1999    and   1998
                       (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 ................................................ 19
          Item 3.  Defaults Upon Senior Securities ...................................... 20
          Item 4.  Submissions 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................................................................................ 22

</TABLE>

                                       -i-
<PAGE>






PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

                                 RB ASSET, INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                      September 30, 1999 and June 30, 1999
                             (Dollars in Thousands)

                                     Assets
<TABLE>
<CAPTION>

                                                                                   (Unaudited)
                                                                                   September 30,             June 30,
                                                                                       1999                    1999
                                                                                   -------------             --------
<S>                                                                           <C>                               <C>
         Real estate assets:
         Real estate held for investment, net of accumulated
            depreciation of $3,840 and $3,264, respectively                   $             92,151              $   92,438

         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

         Real estate loans receivable:
               Secured by real estate                                                       30,242                  53,697
               Allowance for possible credit losses                                       (15,518)                (15,815)
                                                                              ---------------------   ---------------------
                    Total loans receivable, net                                             14,724                  37,882

         Investments in joint ventures                                                       1,512                   1,536
                                                                              ---------------------   ---------------------
              Total real estate assets                                                     110,387                 133,856

         Cash, due from banks and cash equivalents                                          13,891                  14,780
         Cash, due from banks - restricted                                                  36,414                  13,355
         Investment securities available for sale                                            1,147                   1,294
         Commercial and consumer loans                                                      10,306                  10,314
           Allowance for possible credit losses                                            (2,340)                 (2,340)
                                                                              ---------------------   ---------------------
         Commercial and consumer loans, net                                                  7,966                   7,974
         Other assets                                                                        3,721                   3,147
                                                                              --------------------    ---------------------
                 Total Assets                                                 $            173,526    $            174,406
                                                                              =====================   =====================

                      Liabilities and Stockholders' Equity

         Increasing Rate Junior Subordinated Notes due 2006                   $             11,903    $             11,375
         Borrowed funds                                                                     50,557                  50,557
         Other liabilities                                                                  15,368                  15,957
                                                                              ---------------------   ---------------------
                 Total Liabilities                                                          77,828                  77,889
                                                                              ---------------------   ---------------------

         Stockholders' equity:
         15% non-cumulative perpetual preferred stock, series A par value $1,
         liquidation value $25 (1,400,000 shares authorized, 937,777
         issued and outstanding at September 30, 1999 and June 30, 1999)                       938                     938

         Common stock par value $1 (30,000,000 shares authorized,
         7,100,000 shares issued and outstanding at September 30,
         1999 and June 30, 1999)                                                             7,100                   7,100

         Additional paid in capital                                                        100,439                 100,439
         Accumulated deficit                                                              (11,628)                (10,956)
         Accumulated comprehensive income                                                  (1,151)                 (1,004)
                                                                              ---------------------   ---------------------
                 Total Stockholders' Equity                                                 95,698                  96,517

                                                                              ---------------------   ---------------------
         Total Liabilities and Stockholders' Equity                           $            173,526    $            174,406
                                                                              =====================   =====================

</TABLE>

See notes to Consolidated Financial Statements



                                       1
<PAGE>



                                 RB ASSET, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 Three months ended September 30, 1999 and 1998
                  (dollars in thousands, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                            Three months ended September 30,
                                                                       -------------------------------------------
                                                                              1999                   1998
                                                                       -------------------   ---------------------
<S>                                                                     <C>                            <C>
      Revenue:
      Rental revenue and operations:
               Rental income and other property revenue                 $           4,031              $    3,770
               Property operating and maintenance expense                         (2,714)                 (2,564)
               Depreciation - real estate held for investment                       (571)                   (577)
                                                                       -------------------   ---------------------
           Net  rental operations                                                     746                     629

      Net gain on sale of real estate assets                                            -                     488

      Other income:
            Interest income:
               Loans receivable                                                       569                     640
               Money market investments and other                                     172                     227
                                                                       -------------------   ---------------------
                    Total interest income                                             741                     867

            Realization of contingent participation revenues                            -                   1,000
                                                                       -------------------   ---------------------
           Total other income                                                           -                   1,867

                                                                       -------------------   ---------------------
               Total revenues                                                       1,487                   2,984
                                                                       -------------------   ---------------------

      Expenses:
         Interest expense:
               Increasing Rate Junior Subordinated Notes due 2006                     288                       -
               Borrowed funds                                                         659                   1,426
               Other                                                                   22                       5
                                                                       -------------------   ---------------------
                    Total interest expense                                            969                   1,431

         Other expenses:
               Salaries and employee benefits                                          51                      50
               Legal and professional fees                                            202                     202
               Management fees                                                        578                     617
               Other                                                                  177                      65
                                                                       -------------------   ---------------------
                    Total other expenses                                            1,008                     934

                                                                       -------------------   ---------------------
               Total expenses                                                       1,977                   2,365
                                                                       -------------------   ---------------------

                                                                       -------------------   ---------------------
      (Loss) income before provision for income taxes                               (490)                     619
                                                                       -------------------   ---------------------

      Provision for income taxes                                                      182                     169

      Net (loss) income                                                             (672)                     450

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

      Net (loss) income applicable to common stock                      $           (672)     $               450
                                                                       ===================   =====================
      Basic and diluted (loss) income per common share                  $          (0.09)     $              0.06
                                                                       ===================   =====================


</TABLE>


See notes to Consolidated Financial Statements


                                       2
<PAGE>





                                 RB ASSET, INC.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                 Three months ended September 30, 1999 and 1998
                             (dollars in Thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>

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

<S>                                          <C>          <C>         <C>           <C>          <C>            <C>
Balances at June 30, 1998                    $   1,400    $   7,100   $  111,170    $ (11,561)   $    (926)     $  107,183
Net income for the three months
ended September 30, 1998                           -            -          -              450          -               450

Preferred stock dividends payable                  -            -          -               -           -                -

Change  in  comprehensive income
resulting from changes in unrealized
loss on securities available-for-sale              -            -          -               -          (112)           (112)
                                             -----------  ----------  ------------  -----------  -------------  ---------------
Balances at September 30, 1998               $   1,400    $   7,100   $  111,170    $  (11,111)  $  (1,038)     $  107,521
                                             ===========  ==========  ============  ===========  =============  ===============


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

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

Preferred stock dividends payable                   -           -          -                 -          -              -

Change in comprehensive income
resulting from changes in unrealized
loss on securities available-for-sale               -           -          -                 -        (147)           (147)
                                             -----------  ----------  ------------  -----------  -------------  ---------------
Balances at September 30, 1999                $      938  $   7,100   $    100,439  $  (11,628)  $  (1,151)     $   95,698
                                             ===========  ==========  ============  ===========  =============  ===============

</TABLE>


See notes to Consolidated Financial Statements


                                       3

<PAGE>



                                 RB ASSET, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                                   Three months ended
                                                                                                     September 30,
                                                                                        ----------------------------------------
                                                                                                 1999                1998
                                                                                        -------------------- -------------------
<S>                                                                                     <C>                  <C>
  Operating Activities:
  Cash flows (used in) provided by Operating Activities:
    Net (loss) income                                                                   $      (672)         $       450
    Adjustments to reconcile net (loss) income to cash
     used in operating activities:
        Net gain on sale of real estate assets                                                    -               (488)
        Depreciation and amortization                                                           571                 577
        Amortization of capitalized  issuance costs and accretion of
  issuance discount - Increasing Rate Junior Subordinated Notes due 2006
                                                                                                 40                   -
    Change in operating assets and liabilities:
        Net decrease (increase) in accrued interest  receivable                                  85                (11)
        Net (decrease) increase in accrued interest payable, net of
        accrued interest payable capitalized as additional principal -
  Increasing Rate Junior Subordinated Notes due 2006                                            166                  15
        Net (decrease) increase in accrued income taxes                                       (180)                 505
        Net (decrease) increase in accrued expenses
              and other liabilities                                                           (179)                (34)
        Net (increase) decrease in prepaid expenses and other assets                          (659)                  67
        Cash effect of increases in allowance for possible credit losses                          -                  86
                                                                                -------------------- -------------------
              Net cash (used in) provided by operating activities                             (828)               1,167
                                                                                -------------------- -------------------

  Investing Activities:
  Cash flows provided by Investing Activities:
    Net repayment (origination) of loans secured by real estate, net                         23,279               3,164
    Net repayment (reacquisition) of commercial and consumer loans                                8                  59
     Proceeds from partnership distributions - investments in joint ventures                     25                   -
    Proceeds related to sales of real estate held                                                 -               1,344
   Additional fundings on real estate held                                                    (314)               (309)
                                                                                -------------------- -------------------
              Net cash provided by investing activities                                      22,998               4,258
                                                                                -------------------- -------------------

</TABLE>

(Continued on next page)




See notes to Consolidated Financial Statements


                                       4


<PAGE>


                                 RB ASSET, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)
                                   (Unaudited)


(Continued from previous page)

<TABLE>
<CAPTION>

                                                                                   Three months ended September 30,
                                                                                ---------------------------------------
                                                                                        1999               1998
                                                                                ------------------- -------------------
<S>                                                                                       <C>                  <C>
  Financing Activities:
  Cash flows used in Financing Activities:
    Increase in restricted cash                                                           (23,059)             (6,662)
                                                                                ------------------- -------------------
              Net cash used in financing activities                                       (23,059)             (6,662)
                                                                                ------------------- -------------------

  Net decrease in cash, due from banks and cash equivalents                                  (889)             (1,237)

  Cash, due from banks and cash equivalents - June 30, 1999                                 14,780              12,532
                                                                                ------------------- -------------------

  Cash, due from banks and cash equivalents - September 30, 1999                 $          13,891   $          11,295
                                                                                =================== ===================



  Supplemental Disclosure of Cash Flow Information
  Cash paid for:
        Interest                                                                 $           1,251   $           1,416
        Federal, state and local taxes                                                         387                 152

  Supplemental Disclosure of Non-cash Transactions
  Accrued interest capitalized as additional principal - Increasing Rate
  Junior Subordinated Notes due 2006                                             $             487   $             -

</TABLE>






See notes to Consolidated Financial Statements

                                       5

<PAGE>






                                 RB Asset, Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
                             (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 three months ended September 30, 1999.

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

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

On June 28, 1996, the Predecessor  Bank had consummated  the  transactions  (the
"Branch Sale")  contemplated by the Purchase of Assets and Liability  Assumption
Agreement (the "Branch  Agreement") by and between the Predecessor Bank and HSBC
Bank USA ("HSBC"),  a banking corporation formerly known as Marine Midland Bank.
Following  consummation of the Branch Sale, all retail banking operations of the
Predecessor  Bank ceased.  Pursuant to the terms of the Branch  Agreement,  HSBC
assumed  $1,159.6 million of deposit  liabilities  (the "Assumed  Deposits") and
acquired  assets  with an  aggregate  carrying  value of $1,066.6  million  (the
"Transferred  Assets").  The  Transferred  Assets  consisted  primarily of loans
secured by real estate,  mortgage-backed and investment securities,  and 11 bank
branch offices,  inclusive of the name East River Savings Bank.  Included in the
Transferred  Assets  was  approximately  $32.4  million  of loans  in which  the
Predecessor Bank was granted subordinated participation interests. Also included
in the Transferred Assets were the proceeds of dispositions from five individual
asset sale transactions with parties other than HSBC, aggregating $60.4 million,
composed of real estate  assets,  loans and other  receivables  (the "Asset Sale
Transactions").  The Asset Sale  Transactions were structured to include ongoing
recourse  to, and  participation  by, the  Predecessor  Bank with respect to the
assets sold,  based upon the net proceeds  realized on  disposition of assets by
the purchasers. See Note 11 to the Consolidated Financial Statements at June 30,
1999.

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
                               September 30, 1999
                             (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 39.0% of the outstanding Common Stock of the Company.

At the time of the closing of the Branch Sale,  the  Predecessor  Bank  obtained
from HSBC a loan facility  (the  "Facility")  consisting  of eleven  independent
mortgage  loans  with  additional   collateral,   in  an  aggregate   amount  of
approximately  $100.0  million.  The  Facility  has been  reduced  by  repayment
activity to $50.6 million at September 30, 1999.

The Company  has  requested  that HSBC  reactivate  the  Facility to provide the
Company  with  access to  fundings  to be secured by assets from new lending and
real  estate   transactions.   The  Company  has  requested  that  HSBC  provide
availability  up to the initial  amount of the HSBC  Facility  of  approximately
$100.0 million,  or approximately  $50.0 million in availability  under the HSBC
Facility.  Availability  under the HSBC Facility  would be used, in  combination
with the  restricted  and  unrestricted  cash of the  Company  to  invest in new
lending, investment and real estate activities, subject to the prior approval of
HSBC  pursuant to a business  plan  intended to improve the future  earnings and
cash flow of the Company.

The Predecessor Bank had previously received notice that the approvals necessary
to declare or pay dividends on the Predecessor  Bank's outstanding shares of 15%
noncumulative  perpetual  Preferred  Stock,  Series A, par value $1.00 per share
("Predecessor  Preferred  Stock")  would  not be  provided.  In June  1996,  the
Predecessor  Bank's Board of Directors  declared a Predecessor  Preferred  Stock
dividend for the quarter  ending June 30, 1996,  payment of which was subject to
the receipt of required  approvals from the FDIC and the NYSBD (the  Predecessor
Bank's regulators at the time), as well as HSBC (the Predecessor  Bank's and the
Company's  principal  lender).  Primarily as a result of the above,  neither the
Company's or the  Predecessor  Bank's  Board of Directors  have taken any action
regarding  a  quarterly  dividend  on the  Predecessor  Preferred  Stock  or the
Company's 15% noncumulative perpetual preferred stock, Series A, $1.00 par value
("Company  Preferred  Stock")  for  any  of the  quarterly  periods  ended  from
September 30, 1996 through September 30, 1999. Although the Company is no longer
subject to the  jurisdiction  of either the FDIC or the  NYSBD,  declaration  or
payment of future  dividends on the Company  Preferred Stock will continue to be
subject to the approval of HSBC for so long as the Facility remains outstanding.
The Company has received notice from HSBC that the approval necessary to declare
or pay  dividends  on the Company  Preferred  Stock will not be provided at this
time.  There can be no assurance that the Board of Directors of the Company will
deem it appropriate  to pay dividends on the Company  Preferred  Stock,  even if
permitted to do so by HSBC.


2.  Presentation of Interim Financial Statements

The  accompanying  unaudited  consolidated  financial  statements of the Company
include  all  adjustments  which  management   believes  necessary  for  a  fair
presentation  of the Company's  financial  condition at September 30, 1999,  the
results of its operations for the three months ended September 30, 1999 and 1998
and the  statements  of changes in  stockholders'  equity and cash flows for the
three  months ended  September  30, 1999 and 1998.  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 June 30, 1999, 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, 1999.

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

                                       7
<PAGE>


                                 RB Asset, Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
                             (dollars in thousands)
                                   (Unaudited)


In the opinion of management,  the accompanying unaudited consolidated financial
statements  contain  all  adjustments   (consisting  of  only  normal  recurring
accruals) necessary for a fair presentation of the Company's financial condition
as of September 30, 1999,  the results of operations  for the three months ended
September 30, 1999 and 1998, and changes in stockholders'  equity and cash flows
for the three months ended September 30, 1999 and 1998.

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

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

Management  determines  the  appropriate   classification  of  debt  and  equity
securities  (collectively,  "marketable" securities) at the time of purchase and
reevaluates such  designation as of each balance sheet date.  Available-for-sale
securities are stated at estimated fair value, with unrealized gains and losses,
net of tax, reported in a separate  component of stockholders'  equity. The cost
of  marketable  securities  classified  as  available-for-sale  is adjusted  for
amortization   of  premiums  and  accretion  of  discounts  to  maturity.   Such
amortization  is included in interest  income  from  investments.  Interest  and
dividends are included in interest income from  investments.  Realized gains and
losses, and declines in value judged to be other-than-temporary  are included in
net  securities  gains and losses.  The cost of securities  sold is based on the
specific   identification   method.  At  September  30,  1999,  the  balance  of
stockholders'  equity  included  a  cumulative  $1,151,000  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.  At
September  30, 1999 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,  1999.  As a  result  of this  analysis,  the  Company
recognized  income tax  expense in the amount of  $182,000,  during the  quarter
ending September 30, 1999.

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

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


3.  Commitments, Contingencies and Other

As of  September  30,  1999,  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


                                        8

<PAGE>


                                 RB Asset, Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
                             (dollars in thousands)
                                   (Unaudited)


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 7.


4.  Regulatory capital requirements

Subsequent to the  termination  of the  Predecessor  Bank's status as an insured
nonmemeber bank by the FDIC and the  reorganization of the Predecessor Bank into
a  Delaware  corporation,  the  Company is no longer  subject to the  regulatory
capital requirements of either the FDIC or the Banking Department.


5.  Earnings per share

Earnings per share were based upon 7,100,000  weighted  average shares of Common
Stock  outstanding  during the three months ended  September  30, 1999 and 1998,
respectively. The Company had no securities outstanding that were convertible to
common stock at September 30, 1999 or 1998.


6.  Comprehensive Income

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

During the  quarters  ended  September  30, 1999 and 1998,  total  comprehensive
(loss) income was ($819) and $338,  respectively.  The following table describes
the components of comprehensive income and accumulated  comprehensive income for
the dates indicated:


                                        9

<PAGE>


                                 RB Asset, Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
                             (dollars in thousands)
                                   (Unaudited)



    Components of Comprehensive Income
    (Unaudited):

<TABLE>
<CAPTION>

                                                  Three months ended September 30,
                                                   1999                         1998
                                            --------------------        ---------------------
<S>                                                   <C>                <C>
    Net (loss) income                                 $   (672)          $               450
    Unrealized losses on securities                       (147)                        (112)
                                            --------------------        ---------------------
    Comprehensive (loss) income               $           (819)          $               338
                                            ====================        =====================

    Components of Accumulated
    Comprehensive Income:
                                                 (Unaudited)
                                                September 30,                 June 30,
                                                    1999                        1999
                                            --------------------        ---------------------

    Unrealized losses on securities                 $   (1,151)                  $   (1,004)
                                            --------------------        ---------------------
    Accumulated comprehensive income                $   (1,151)                  $   (1,004)
                                            ====================        =====================

</TABLE>

7.  Legal Proceedings

On November 25, 1998,  the Company  offered  upon the terms and  conditions  set
forth in its Offering  Circular  and the related  Letter of  Transmittal  (which
together  constituted the "Exchange Offer"), to exchange $25.94 principal amount
of its Increasing  Rate Junior  Subordinated  Notes due 2006 (the  "Subordinated
Notes") for each outstanding share of its 15% Non-Cumulative Preferred Perpetual
Stock,  Series A, par value  $1.00 (the  "Series A Preferred  Stock"),  of which
1,400,000 shares were outstanding on that date.

By letter,  dated May 22,  1998,  counsel for  certain  holders of shares of the
Company  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 believes such allegations are without merit.  However,  in an effort
to resolve these claims on an amicable basis, representatives of the Company and
such holders 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. Such proposal was not acceptable
to such holders and, on October 27, 1998, 11 holders of Company  Preferred Stock
who claim to beneficially own, in the aggregate,  849,000 shares  (approximately
60.6% of the then 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


                                       10
<PAGE>



                                 RB Asset, Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
                             (dollars in thousands)
                                   (Unaudited)


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.  The
motion was  argued  before  the court on March 23,  1999 and the court  reserved
decision. The motion remains pending before the court.





                                       11

<PAGE>



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

Financial Condition:

At September  30, 1999 the  consolidated  assets of the Company  totaled  $173.5
million, a decrease of $880,000,  or 0.50% as compared with total assets at June
30, 1999.

Real estate  held for  investment,  net of  accumulated  depreciation,  declined
$287,000,  or 0.31%,  from $92.4  million at June 30,  1999 to $92.1  million at
September  30,  1999.  The decline in real estate  held for  investment,  net of
accumulated  depreciation  at September 30, 1999 as compared with the balance at
June 30, 1999, was primarily  attributable to depreciation  charges of $571,000,
partially offset by fundings for capital improvements of $314,000.

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  September  30,  1999 from the  balance  of $2.0  million  at June 30,  1999.
Apartment  units  categorized  as real estate held for disposal at September 30,
1999 are expected to be sold within the next twelve months.

Total loans  secured by real estate,  net of the related  allowance for possible
credit losses,  declined $23.2 million, or 61.1%, from $37.9 million at June 30,
1999 to $14.7 million at September 30, 1999.  The $23.2 million  decline in real
estate loans,  net,  during the quarter ended  September 30, 1999, was primarily
attributable  to the full  satisfaction  of three loans  secured by real estate,
totaling $23.2 million and the effects of normal scheduled principal repayments,
partially  offset by a decline in the  related  allowance  for  possible  credit
losses of $297,000.

The Company's  allowance for possible  credit losses related to loans secured by
real estate decreased by $297,000, or 1.9%, from $15.8 million, at June 30, 1999
to $15.5 million at September 30, 1999. The decrease resulted from chargeoffs of
$297,000 for asset disposition  transactions previously provided for at June 30,
1999.  The  Company's  allowance  for possible  credit losses is maintained at a
level which  management  considers  adequate based on its periodic review of the
Company's loans secured by real estate portfolios and certain  individual loans,
taking into consideration,  among other things, the likelihood of repayment, the
diversity of the  borrowers,  the type of loan,  the quality of the  collateral,
current market  conditions and the associated  risks. At September 30, 1999, the
allowance for possible  credit losses was 51.3% of real estate loans as compared
to 29.5% at June 30, 1999.

Cash, due from banks and cash equivalents  decreased by $889,000,  or 6.0%, from
$14.8 million at June 30, 1999 to $13.9 million at September 30, 1999. Additions
to  restricted  cash,  scheduled  asset  fundings  and the payment of  operating
expenses  exceeded  the total  operating  revenues  and  available  asset  sales
proceeds,  resulting  in the  decrease in  unrestricted  cash during the quarter
ended September 30, 1999.

At  September  30, 1999,  HSBC had  restricted  a total of  approximately  $36.4
million in funds,  held on deposit at HSBC, in accordance  with the terms of the
Branch Sale and the Facility agreements. HSBC had restricted approximately $13.4
million at June 30, 1999. 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.

Commercial  and consumer  loans,  net of the related  allowance for loan losses,
totaled $8.0 million at September 30, 1999, a decrease of $8,000,  or 0.1%, from
the June 30,  1999.  This  decrease was  primarily  the result of the effects of
normal amortization and repayment of individual loans in the portfolio.

Other  liabilities  totaled  $15.4  million at September 30, 1999, a decrease of
$589,000,  or 3.7%,  from the June 30, 1999  balance of $16.0  million.  The net
decrease in other  liabilities  during the quarter ended  September 30, 1999 was
primarily related to the  capitalization of $487,000 in accrued interest payable
as additional  principal  Increasing Rate Junior  Subordinated Noted due 2006 on
July 15, 1999, in accordance with the terms of the Notes.  Primarily as a result
of this accrued interest  capitalization,  at September 30, 1999, the balance of
the Company's  Increasing Rate Junior  Subordinated  Notes due 2006 increased by
$528,000, or 4.6%, to $11.9 million, as compared with a balance of $11.4 million
at June 30, 1999.


                                       12

<PAGE>



During the three months ended  September 30, 1999,  total  stockholders'  equity
decreased by $819,000, or 0.9%, to $95.7 million, as compared with $96.5 million
at June 30, 1999.  This  decrease was due to the net loss recorded for the three
months ended  September 30, 1999 in the amount of $672,000 and a decrease in the
securities  valuation  account  (allowance for  unrealized  losses on marketable
securities) of $147,000.

The following  table  summarizes the calculation of the Company's book value per
share at September 30, 1999 and June 30, 1999.
<TABLE>
<CAPTION>

                                                            September 30,                   June 30,
                                                                1999                          1999
                                                      --------------------          --------------------

<S>                                                           <C>                           <C>
  Total stockholders' equity                                  $95,698,000                   $96,517,000

     Less: liquidation value of preferred stock
        ($25 per share issued and outstanding)                 23,444,000                    23,444,000
                                                      --------------------          --------------------
  Net stockholders' equity                                    $72,254,000                   $73,073,000
                                                      ====================          ====================

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

             Book value per share                       $           10.18              $          10.30
                                                      ====================          ====================

</TABLE>


Results of Operations:

General.  The  Company  reported  a net loss  attributable  to common  shares of
$672,000,  or $(0.09) per basic and diluted  share,  for the three  months ended
September  30,  1999,  a decrease of $1.1  million as  compared  with net income
attributable  to common  shares of $450,000,  or $0.06 per share,  for the three
month period ended September 30, 1998.

The primary  reason for the decrease in the Company's net operating  results for
the quarter  ended  September  30, 1999,  as compared to the same quarter in the
previous year, was the positive income effects of  nonrecurring  transactions in
the quarter ended  September 30, 1998,  which resulted in the recording of gains
on asset sales and loan participations totaling $1.5 million. During the quarter
ended September 30, 1998, the Company recognized $1.0 million in contingent loan
participation  revenues and $488,000 in gains on the sale of real estate assets,
that were  nonrecurring in nature.  During the quarter ended September 30, 1999,
the Company recognized no contingent loan participation revenues and no gains on
the sale of real estate assets.

In  addition to the effects of the  nonrecurring  transactions  on income in the
quarter  ended  September  30, 1998,  total income also  declined in the quarter
ended  September  30,  1999,  as compared  with the same quarter of the previous
year, due to a decline in interest income. Interest income declined $126,000, or
14.5%, from $867,000 in the quarter ended September 30, 1998, to $741,000 during
the same quarter of the current year,  primarily as a result of loan  repayments
which occurred during the quarter ended September 30, 1999.

Partially offsetting the decreases in income, cited above, for the quarter ended
September 30, 1999, as compared to the same quarter of the previous  year, was a
reduction in interest  expense of $462,000.  Interest expense declined from $1.4
million in the quarter  ended  September  30,  1998 to $969,000  during the same
quarter of the  current  year,  primarily  as the  result of the  effects of the
compensating  balance  agreement  renegotiated  with HSBC in December  1998 (see
"Interest Expense," below).

Net Rental Operations. For the three months ended September 30, 1999, net rental
operations  resulted in income of $746,000,  an increase of $117,000,  or 18.6%,
from  $629,000  for the same  three  month  period in the  previous  year.  This
increase was due to various, individually immaterial operating factors affecting
aggregate rental income and expenses within the Company's rental properties.


                                       13

<PAGE>



Net (Loss)  Gain on the Sale of Real  Estate  Assets.  A net loss on the sale of
real estate of $31,000 was recorded for the quarter ended  September 30, 1999, a
decrease of  $519,000,  as  compared  with net income of $488,000 in the quarter
ended  September 30, 1998. For the quarter ended September 30, 1999, the $31,000
net loss was  attributable  to  adjustments  made  related to the final  closing
prices of certain residential unit sales, which were sold in prior periods.  For
the quarter  ended  September  30, 1998,  the $488,000  gain on the sale of real
estate  assets  was  primarily  attributable  to the  recognition  of a gain  of
$500,000  resulting  from  the  full  satisfaction  of  a  junior   subordinated
participation  loan secured by real estate which had been fully  reserved for in
prior periods.

Interest  Income.  For the three months ended September 30, 1999, total interest
income was $741,000,  a decline of $126,000,  from $867,000 for the same quarter
in the previous year. Loan interest declined  $71,000,  or 11.1%, in the quarter
ended  September  30,  1999,  as compared  with the same quarter in the previous
year,  due  to  reduced  average   balances  for  loan  assets   resulting  from
satisfactions and the effects of normal amortization and repayment activity.  In
addition,  other interest  income  decreased  $55,000,  or 24.3%, in the quarter
ended  September 30, 1999 as compared with the quarter ended September 30, 1998.
The decrease in other interest  income in the quarter ended  September 30, 1999,
as compared with the same quarter in the previous year, was primarily due to the
effects of a renegotiation of the HSBC Facility  agreement which occurred in the
quarter ended December 31, 1998. Under the renegotiated agreement, funds held on
deposit at HSBC no longer earn interest income,  but are,  instead,  now used to
reduce the interest expense for funds borrowed from HSBC under the Facility. See
"Interest Expense," below.

Contingent  Loan  Participation   Revenues.   The  Company  realized  contingent
participation  revenues of $0 and $1.0 million in the quarters  ended  September
30, 1999 and 1998,  respectively.  During the quarter ended  September 30, 1998,
contingent  loan  participation  revenues of $1.0 million were recognized on one
subordinated  participation loan and one junior subordinated  participation loan
made to the same  borrower  with a combined  principal  balance of $1.3 million.
These loans were paid in full during the quarter  ended  September  30,  1998. A
portion of the subordinated participation loan and the junior participation loan
had been sold to HSBC on June 28, 1996 and the junior subordinated participation
loan was fully  reserved for on the Company's  books  following the Branch Sale.
The full repayment of the junior subordinated participation loan resulted in the
recognition of an additional  gain in the amount of $500,000  during the quarter
ended September 30, 1998.

At September 30, 1999,  the Company had a remaining  contingent  interest in two
junior subordinated participation loans in which the Company retains an interest
of approximately $2.4 million in principal amount,  which are fully reserved for
(100%) by the Company.  All of such loans have been modified  since  origination
and are currently performing in accordance with their terms.


Interest Expense.  During the three months ended September 30, 1999, the Company
recorded interest expenses in the amount of $969,000, a decline of $462,000,  or
32.3%, as compared with interest expenses of $1.4 million in the same quarter of
the previous year.  These reductions in interest expense for borrowed funds were
partially  offset by the recognition of $288,000 in interest  expense related to
the Company's  Increasing Rate Junior  Subordinated  Notes due 2006,  which were
initially issued in December 30, 1998.

Interest  expenses  paid on  borrowed  funds  declined  $767,000,  or 53.8%,  to
$659,000 in the quarter  ended  September  30, 1999,  as compared  with interest
expense of $1.4  million  recorded  the same  quarter in 1998.  This  decline in
interest  expense  recorded for borrowed funds was the result of declines in the
average amount  borrowed by the Company from HSBC and reductions in the interest
rate paid by the Company on borrowed funds,  under the renegotiated terms of the
Facility.

During the quarter ended September 30, 1999, the Company  borrowed an average of
$50.6 million,  a decline of $18.2 million,  or 26.5%,  as compared with average
borrowings of $68.8 million  during the quarter  ended  September 30, 1998.  The
decline  in the  average  amount  of  borrowed  funds  was  attributable  to the
repayment of outstanding  obligations  which occurred in fiscal 1999,  primarily
funded by asset sales and loan repayments.

The average  interest rate paid to HSBC on borrowed  funds declined from 8.5%for
the three  months  ended  September  30,  1998 to 5.21% for the same three month
period in the current year. The decline in rates paid to HSBC in the three month
period  ended  September  30,  1999,  as compared  with the same  periods in the
previous year, was primarily due to a  renegotiation  of the Company's  interest
ratewith HSBC. Under the


                                       14
<PAGE>


terms of the  renegotiated  interest  rate  agreements  with HSBC,  which became
effective  October 1, 1998, the Company  receives  interest rate  reductions for
borrowed funds,  calculated using a formula that considers certain  compensating
balances held in bank accounts with HSBC. The interest  expense rate  reductions
received under the new rate schedule agreement with HSBC are in lieu of interest
income that had been earned on those  deposited  funds.  See "Interest  Income,"
above. This new interest rate agreement with HSBC reduced the Company's interest
earned on  deposits  with  HSBC  approximately  $137,000  in the  quarter  ended
September  30, 1999,  as compared  with the same quarter in 1998.  This was more
than  offset  by  a  reduction  in  interest   expense  on  borrowed   funds  of
approximately  $434,000,  as compared with the interest  expense that would have
been paid to HSBC under the interest rate agreement in effect during the quarter
ended September 30, 1998.

Other  Expenses.  During the  quarter  ended  September  30,  1999,  the Company
recorded total other expenses in the amount of $977,000, an increase of $43,000,
or 4.6%, as compared with other  expenses of $934,000 in the same quarter of the
previous year. Other expenses increased in the quarter ended September 30, 1999,
as compared with the quarter ended September 30, 1998,  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 39.0% of
the outstanding Common Stock of the Company.  During the quarter ended September
30,  1999,  the  Company  accrued  $754,000  in fees  payable to the  Management
Company,  of  which  $176,000  related  to  fees  incurred  for  the  successful
disposition of assets.  During the quarter ended September 30, 1998, the Company
accrued  $664,000 in fees payable to the  Management  Company,  of which $46,000
related to fees incurred for the successful  disposition of assets. At September
30, 1999 the Company had accrued fees payable to the Management  Company and its
affiliate,  Fintek,  Inc.,  aggregating  $247,000.

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

The high  levels  of loan  charge-offs  and other  losses,  which  were  largely
responsible for losses during the periods, effectively eliminated federal income
tax liability for the quarters ended  September 30, 1998 and 1997. The Company's
income tax provision  includes  state and local taxes on the greater of combined
entire net income,  combined  alternative  entire net income or combined taxable
assets.  Certain  subsidiaries  provide  for state and local taxes on a separate
company basis on income, capital, assets or an alternative minimum tax.

The provision for income taxes differs from the amount  computed by applying the
statutory  Federal income tax rate of 35% to the reported loss before  provision
for income taxes primarily due to state and local income and franchise taxes and
limitations on the recognition of tax benefits of net operating  losses.  During
the  quarters  ended  September  30, 1999 and 1998,  the Company  recorded a net
provision for income taxes of $182,000 and $169,000, respectively,  primarily to
reflect the effects of  operations  on its  current  state and local  income tax
liability at September 30, 1999 and 1998, 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.



                                       15
<PAGE>




At  September  30,  1999,  the  Company  had $50.6  million  in  borrowed  funds
outstanding  under the  Facility  provided by HSBC Bank.  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  has  requested  that HSBC  reactivate  the  Facility to provide the
Company  with  access to  fundings  to be  secured by assets  from new  lending,
investment  and real estate  transactions.  The Company has requested  that HSBC
provide  availability  up  to  the  initial  amount  of  the  HSBC  Facility  of
approximately  $100.0 million,  or  approximately  $50.0 million in availability
under the HSBC Facility.  Availability under the HSBC Facility would be used, in
combination with the restricted and  unrestricted  cash of the Company to invest
in new  lending,  investment  and real estate  activities,  subject to the prior
approval of HSBC.

The  Company  seeks to maintain  liquidity,  in the form of  unrestricted  cash,
within a range of 5% to 10% of total  assets.  At June 30, 1999,  the  Company's
liquidity  ratio,  as so  defined,  amounted  to  8.0%,  which  was  within  the
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. FASB  Interpretation  No. 43, "Real Estate Sales,"
interprets  and amends  Statement  of  Financial  Accounting  Standards  No. 66,
"Accounting for Sales of Real Estate." FASB  Interpretation No. 43 clarifies the
sales and income  recognition  criteria  for sales  involving  real  estate with
property  improvements or integral  equipment such as manufacturing  facilities.
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 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.

Impact of Year 2000

General  Description  of the Year 2000 Issue and the  Nature and  Effects of the
Year 2000 on Information Technology (IT) and Non-IT Systems. The Year 2000 issue
is the result of computer  programs  being  written using two digits rather than
four  digits  to define  the  applicable  year.  Any of the  Company's  computer
programs or hardware that have date-sensitive software or embedded computer chip
technology may recognize a date using "00" as the year 1900 rather than the Year
2000.  This  could  result  in  a  system  failure  or  miscalculations  causing
disruptions of operations,  including, among other things, a temporary inability
to process transactions or engage in similar normal business activities.

The Company believes that  modifications to existing software and conversions to
new software, the Year 2000 issue will not pose significant operational problems
for its computer systems.  Further,  due to the limited number of assets managed
by the Company and the limited  scope of the  Company's  continuing  operations,
which could be managed and  accounted for by methods not relying on the computer
systems currently  employed by the Company,  if such modifications are not made,
or if such  modifications  and conversions are not completed in a timely manner,
the Year 2000 issue is  unlikely  to have a material  impact


                                       16
<PAGE>



on the operations,  liquidity or capital resources of the Company.  In addition,
the Company believes that the  implementation  of modifications to components of
the  building  systems,  affecting  the  operations  of its  properties  held as
investments  in real  estate,  is  unlikely  to have a  material  affect  on the
operations, liquidity or capital resources of the Company.

Status of Progress in Becoming  Year 2000  Compliant,  Including  Timetable  for
Completion of Each Remaining  Phase. The Company's plan to resolve the Year 2000
issue  involves  four  phases:  assessment,  and where  necessary,  remediation,
testing and implementation

To date,  the Company has completed  the  assessment,  remediation,  testing and
implementation  of all internal systems that could be significantly  affected by
the Year 2000.  The  Company's  costs have been  minimal,  since all  accounting
software use by the Company is maintained and supported by a third party.

In addition,  the Company has completed the assessment of all systems related to
the  operations  of its  properties  held as  investments  in real estate.  Such
assessments  were  performed to ensure that  remediation  of building  equipment
(such as security  systems and elevators) could be completed and tested prior to
the year 2000. The Company's completed  assessment  indicated the need to modify
or  replace  portions  of its  buildings'  systems so that  these  systems  will
function  properly  with respect to dates in the year 2000 and  thereafter.  All
necessary  remediation  is  expected  to be  completed  as an  integral  part of
regularly scheduled building maintenance and repair activities. As a result, the
cost of  such  remediation  is  expected  to be  immaterial  to the  operations,
liquidity or capital resources of the Company.

Nature and Level of Third Parties and their Exposure to the Year 2000 Issue. The
Company has queried its significant  suppliers and  subcontractors  that provide
accounting or information  processing services to the Company (external agents).
To date,  the Company is not aware of any external  agent with a Year 2000 issue
that would materially impact the Company's  results of operations,  liquidity or
capital resources. However, the Company has no means of absolutely ensuring that
external  agents  will be Year 2000 ready.  Due to the limited  number of assets
managed  by the  Company  and the  limited  scope  of the  Company's  continuing
operations,  which could be managed and  accounted for by methods not relying on
the computer systems and services currently provided by external agents employed
by the Company, if such modifications are not made, or if such modifications and
conversions  are not  completed  in a  timely  manner,  the Year  2000  issue is
unlikely  to have a  material  impact on the  operations,  liquidity  or capital
resources of the Company.

Contingency   Plans.  The  Company  has  contingency   plans  for  all  critical
applications and systems.  These contingency plans involve,  among other planned
actions,  the  use  of  alternative  manual  procedures,  the  temporary  use of
increased or alternative third party services and adjusting staffing strategies.



                                       17
<PAGE>


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.

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  $506,000  increase in interest  expense based on
approximately $50.6 million outstanding at June 30, 1999. See Note 16, "Borrowed
Funds," contained within the Consolidated Financial Statements.

In addition,  the Company has issued $12.48  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  28,   "Increasing  Rate  Junior
Subordinated  Notes," contained within the Consolidated  Financial Statements at
June 30, 1999.

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 25, "Fair Value of Financial  Instruments,"
within the Consolidated Financial Statements at June 30, 1999.


                                     18


<PAGE>

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

On November 25, 1998,  the Company  offered  upon the terms and  conditions  set
forth in its Offering  Circular  and the related  Letter of  Transmittal  (which
together  constituted the "Exchange Offer"), to exchange $25.94 principal amount
of its Increasing  Rate Junior  Subordinated  Notes due 2006 (the  "Subordinated
Notes") for each outstanding share of its 15% Non-Cumulative Preferred Perpetual
Stock,  Series A, par value  $1.00 (the  "Series A Preferred  Stock"),  of which
1,400,000 shares were outstanding on that date.

By letter,  dated May 22,  1998,  counsel for  certain  holders of shares of the
Company  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 believes such allegations are without merit.  However,  in an effort
to resolve these claims on an amicable basis, representatives of the Company and
such holders 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. Such proposal was not acceptable
to such holders and, on October 27, 1998, 11 holders of Company  Preferred Stock
who claim to beneficially own, in the aggregate,  849,000 shares  (approximately
60.6% of the then 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.  The
motion was  argued  before  the court on March 23,  1999 and the court  reserved
decision. The motion remains pending before the court.

Item 2. Changes in Securities

None.


                                       19


<PAGE>


Item 3. Defaults Upon Senior Securities

None.


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

The Company held its annual  meeting of  stockholders  on October 20, 1999.  The
holders  of common  stock,  $1.00 par value,  of the  Company  ("Common  Stock")
considered proposals to:

1. elect Robin  Chandler  Duke and David A.  Shapiro as directors to serve for a
term of three years or until such  directors'  successors  are elected and shall
have qualified ("Proposal 1"); and

2.    ratify the appointment of Ernst & Young LLP as the independent auditors of
the Bank for fiscal year 2000 ("Proposal 2").

The holders of 15% non-cumulative preferred perpetual stock, series A, $1.00 par
value, of the Company ("Series A Preferred Stock") considered a proposal to:

1. elect David J. Liptak and Jeffrey E.  Susskind as directors for a term of one
year or until such  directors'  successors  are elected and have been  qualified
("Proposal 3").

According  to the  records of the Company and  American  Stock  Transfer & Trust
Company,  the Company's transfer agent ("AST"),  there were a total of 7,100,000
shares of Common Stock and 937,777 shares of Preferred Stock that could be voted
at the meeting. 5,217,716 shares of Common Stock and 852,020 shares of Preferred
Stock were represented at such meeting by the holders thereof or by proxy, which
constituted a quorum with respect to all proposals.

The following table sets forth the number of votes in favor, the number of votes
opposed,  and the number of  abstentions  (or votes  withheld in the case of the
election of directors) with respect to each of the foregoing proposals:

<TABLE>
<CAPTION>

                                                                                     Abstentions
Proposal                                  Votes in Favor       Votes Opposed         (Withheld)
---------------------------------------------------------------------------------------------------------

<S>                                          <C>                     <C>                   <C>
Proposal 1
Robin Chandler Duke                         5,217,716                --                    --
David A. Shapiro                            5,217,716                --                    --
---------------------------------------------------------------------------------------------------------
Proposal 2                                  5,217,716                --                    --
---------------------------------------------------------------------------------------------------------
Proposal 3
David J. Liptak                               852,020                --                    --
Jeffrey E. Susskind                           852,020                --                    --
---------------------------------------------------------------------------------------------------------
</TABLE>


Item 5. Other Information

None.

Item 6.   Exhibits and Reports on Form 8-K

(a)       Exhibits

          Exhibit Number                Description
          ---------------               --------------
          27.1                          Financial Data Schedule


                                       20

<PAGE>



(b)       Reports on Form 8-K

          During the fiscal quarter ended  September 30, 1999, the Company filed
          the following Current Reports on Form 8-K:

          None




                                       21


<PAGE>


                                   SIGNATURES

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


                                       RB ASSET, INC.
                                        (Registrant)


Date: November 15, 1999        By: /s/ Nelson L. Stephenson

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





                                       22