UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, DC  20549


                                  FORM 10-Q


          [  X  ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                     For the quarterly period ended: May 31, 1997

                                      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  0-17709


                             RCSB FINANCIAL, INC.
            (Exact name of registrant as specified in its charter)


           DELAWARE                                   16-1484699
(State or other jurisdiction of         (I.R.S. employer identification number)
incorporation or organization)


235 EAST MAIN STREET, ROCHESTER, NEW YORK                  14604
 (Address of principal executive offices)                (Zip Code)


                               (716) 423-7270
             (Registrant's telephone number including area code)


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

Number of shares of common stock outstanding on June 30, 1996: 14,693,163
                                                               ----------


                                      -1- 




<PAGE>
                    RCSB FINANCIAL, INC. AND SUBSIDIARIES

                                  FORM 10-Q

                            For the Quarter Ended
                                 May 31, 1997

                                    INDEX
<TABLE>
<CAPTION>



                                                                         Page
                                                                         ----
<S>         <C>                                                          <C>

PART I -    FINANCIAL INFORMATION

ITEM 1 -    FINANCIAL STATEMENTS

            Consolidated Balance Sheets as of
            May 31, 1997 and November 30, 1996                              3

            Consolidated Statements of Income for the three and six
            months ended May 31, 1997 and 1996                              4

            Consolidated Statements of Changes in Shareholders' Equity
            for the three and six months ended May 31, 1997 and 1996        5

            Consolidated Statements of Cash Flows for the six months
            ended May 31, 1997 and 1996                                     6

            Notes to Consolidated Financial Statements                      8

ITEM 2 -    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS                                      12

PART II -   OTHER INFORMATION

ITEM 4 -    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS            23

ITEM 6 -    EXHIBITS AND REPORTS ON FORM 8-K                               24

SIGNATURES                                                                 25
</TABLE>



                                      -2-

<PAGE>

<TABLE>
<CAPTION>


                            RCSB FINANCIAL, INC. AND SUBSIDIARIES
                                 CONSOLIDATED BALANCE SHEETS
                                         (Unaudited)
                                         (thousands)


                                                                   MAY 31,       November 30,
                                                                    1997             1996
                                                               ---------------  --------------
<S>                                                            <C>              <C>
ASSETS 
Cash and due from banks                                        $       75,916   $      56,639 
Interest-bearing deposits in banks                                      3,767           7,654 
Securities available for sale, at fair value (amortized cost
  $20,486 in 1997 and $21,093 in 1996)                                 18,171          18,797 
Securities held to maturity, at amortized cost (fair value
  $1,524,609 in 1997 and $1,634,422 in 1996)                        1,544,612       1,639,021 
Loans receivable:
  Residential mortgage                                                705,853         763,112 
  Automobile                                                        1,241,943         994,749 
  Commercial mortgage                                                  12,739          55,229 
  Consumer and other                                                   92,740          85,334 
  Residential mortgage held for sale                                  169,769         150,437 
                                                               ---------------  --------------
     Total loans receivable                                         2,223,044       2,048,861 
  Allowance for loan losses                                           (26,337)        (28,190)
                                                               ---------------  --------------
     Net loans receivable                                           2,196,707       2,020,671 

Premises and equipment                                                 39,528          39,583 
Federal Home Loan Bank stock                                           41,568          34,650 
Loan servicing assets                                                  93,206         118,442 
Other real estate                                                       6,111           6,212 
Other assets                                                           84,781          72,648 
                                                               ---------------  --------------

       Total assets                                            $    4,104,367   $   4,014,317 
                                                               ===============  ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits                                                       $    2,342,879   $   2,368,650 
Federal Home Loan Bank:
  Repurchase agreements                                               695,193         390,571 
  Other borrowings                                                    112,150         232,450 
Other repurchase agreements and borrowings                            418,754         484,834 
Mortgagors' deposits under escrow agreements                           92,061          66,205 
Other liabilities                                                     130,753         147,744 
                                                               ---------------  --------------

       Total liabilities                                            3,791,790       3,690,454 
                                                               ---------------  --------------

Commitments and contingent liabilities
SHAREHOLDERS' EQUITY:
  Common stock, at par value                                           15,538          15,388 
  Paid-in capital in excess of par value                              161,024         159,485 
  Surplus fund                                                         51,070          51,070 
  Undivided profits                                                   120,415         106,910 
  Loans to employee stock plan                                         (2,805)         (3,180)
  Net unrealized holding loss on securities, net of taxes              (3,753)         (4,159)
  Treasury stock, at cost (947 and 57 shares in
     1997 and 1996, respectively)                                     (28,912)         (1,651)
                                                               ---------------  --------------

       Total shareholders' equity                                     312,577         323,863 
                                                               ---------------  --------------

       Total liabilities and shareholders' equity              $    4,104,367   $   4,014,317 
                                                               ===============  ==============

</TABLE>


                                      -3-

<PAGE>
<TABLE>
<CAPTION>


                                         RCSB FINANCIAL, INC. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF INCOME
                                                      (Unaudited)
                                         (thousands, except per share amounts)


                                                        Three Months Ended        Six Months Ended
                                                               May 31,                 May 31,
                                                        1997          1996         1997        1996
                                                     -----------  -----------  -----------  -----------
<S>                                                  <C>          <C>          <C>           <C>

 Interest income: 
  Interest and fees on loans                         $    47,645   $   44,348  $    92,581   $   87,948
  Interest on mortgage-backed and other securities        28,382       30,098       57,651       57,525
  Other interest income                                      131           67          222          263
                                                     -----------  -----------  -----------  -----------
 
        Total interest income                             76,158       74,513      150,454      145,736
                                                     -----------  -----------  -----------  -----------

Interest expense:
  Interest on deposits                                    26,024       25,103       51,558       50,056
  Interest on FHLB borrowings and
    repurchase agreements                                 10,200        9,944       20,424       18,350
  Interest on other repurchase agreements
    and borrowings                                         6,562        6,457       12,870       12,598
                                                     -----------  -----------  -----------  -----------

         Total interest expense                           42,786       41,504       84,852       81,004
                                                     -----------  -----------  -----------  -----------

Net interest income                                       33,372       33,009       65,602       64,732
  Provision for loan losses                                4,092        3,478        8,092        6,220
                                                     -----------  -----------  -----------  -----------

Net interest income after
  provision for loan losses                               29,280       29,531       57,510       58,512
                                                     -----------  -----------  -----------  -----------

Noninterest income:
  Mortgage banking                                        13,938       12,131       29,917       22,389
  Retail banking                                           2,092        2,711        3,871        5,075
  Automobile loan banking                                     62        1,116          113        1,585
  Net securities sale gains                                    -          995           85          995
  Other                                                     (302)          29         (296)          66
                                                     -----------  -----------  ------------  ----------
  Total noninterest income                                15,790       16,982       33,690       30,110
                                                     -----------  -----------  ------------  ----------

Operating expenses:
  Salaries, commissions and benefits                      20,010       18,633       38,563       34,318
  Occupancy                                                5,451        5,236       10,681       10,147
  Marketing                                                  980        1,047        1,667        1,226
  Other                                                    6,061        7,007       11,832       13,441
                                                     -----------  -----------  -----------  -----------

        Total operating expenses                          32,502       31,923       62,743       59,132
                                                     -----------  -----------  -----------  -----------
Income before income taxes                                12,568       14,590       28,457       29,490
  Provision for income taxes                               4,332        5,106       10,529       10,322
                                                     -----------  -----------  -----------  -----------

Net income                                           $     8,236  $     9,484  $    17,928  $    19,168
                                                     ===========  ===========  ===========  ===========

Net income per common share (fully diluted)          $      0.55  $      0.54  $      1.18  $      1.07
                                                     ===========  ===========  ===========  ===========

Net income applicable to common shares               $     8,236  $     8,176  $    17,928  $    16,552
                                                     ===========  ===========  ===========  ===========

Net income per common share (primary)                $      0.55  $      0.63  $      1.18  $      1.24
                                                     ===========  ===========  ===========  ===========

</TABLE>


                                      -4-

<PAGE>
<TABLE>
<CAPTION>


                                RCSB FINANCIAL, INC. AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENTS OF CHANGES
                                       IN SHAREHOLDERS' EQUITY
                                             (Unaudited)
                                 (thousands, except per share amounts)

 
                                                                           Three Months Ended
                                                                                 May 31,

                                                                          1997              1996
                                                                    ----------------  ----------------
<S>                                                                 <C>               <C>
 
 Shareholders' equity at beginning of period                        $       316,440   $       371,295 

Net income                                                                    8,236             9,484 
Repurchase of RCSB common stock                                             (11,683)          (27,890)
Common stock options exercised                                                1,366               990 
Dividends declared on preferred stock                                             -            (1,308)
Dividends declared on common stock ($0.15 and
   $0.24 per share in 1997 and 1996, respectively)                           (2,171)           (3,055)
Loan repayments from employee stock plan                                        190               383 
Change in net unrealized holding loss on securities, net of taxes               199              (309)
                                                                    ----------------  ----------------

Shareholders' equity at end of period                               $       312,577   $       349,590 
                                                                    ================  ================


 
                                                                            Six Months Ended
                                                                                 May 31,
                                                                           1997             1996 
                                                                    ----------------  ----------------

Shareholders' equity at beginning of period                         $       323,863   $       375,927 

Net income                                                                   17,928            19,168 
Repurchase of RCSB common stock                                             (27,261)          (40,857)
Common stock options exercised                                                1,689             1,826 
Dividends declared on preferred stock                                             -            (2,616)
Dividends declared on common stock ($0.30 and
   $0.36 per share in 1997 and 1996, respectively)                           (4,423)           (4,711)
Loan repayments from employee stock plan                                        375               760 
Change in net unrealized holding loss on securities, net of taxes               406                93 
                                                                    ----------------  ----------------

Shareholders' equity at end of period                               $       312,577   $       349,590 
                                                                    ================  ================

</TABLE>


                                      -5-

<PAGE>

<TABLE>
<CAPTION>

                            RCSB FINANCIAL, INC. AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                         (Unaudited)
                                         (thousands)

                                                                         Six Months Ended
                                                                             May 31,
                                                                        1997          1996
                                                                    ------------  ------------
<S>                                                                 <C>           <C>

OPERATING ACTIVITIES: 
    Net income                                                      $    17,928   $    19,168 
    Adjustments to reconcile net income to net
       cash provided (used) by operating activities:
        Provision for loan losses                                         8,092         6,220 
        Amortization of loan servicing rights                             6,782         6,779 
        Net gains on the sale of loans, securities, loan
          servicing rights and other real estate                         (6,086)         (870)
        Amortization of intangible assets, hedging gains
          or losses, and securities premiums or discounts                 2,455         2,150 
        Depreciation and other amortization                               4,057         3,800 
        Deferred income tax provision (benefit)                           6,700        (1,500)
        Decrease in allowance for foreclosed real estate                 (1,000)            - 
        Increase in mortgage loans held for sale                        (19,332)      (33,621)
        (Increase) decrease in other assets, net                        (20,956)       66,876 
        Decrease in accrued expenses                                     (1,034)       (4,795)
        Decrease in loans to employee stock plan                            376           760 
                                                                    ------------  ------------

           Net cash provided (used) by operating activities              (2,018)       64,967 
                                                                    ------------  ------------

INVESTING ACTIVITIES:
    Decrease in interest-bearing deposits in banks                        3,887         3,267 
    Purchases of:
       Securities available for sale                                    (24,685)            - 
       Securities held to maturity                                      (25,744)     (358,346)
       Loans                                                                  -           (92)
       Premises and equipment, net                                       (4,002)       (6,897)
       Loan servicing rights, including those on originated loans       (11,465)      (28,379)
    Loan originations:
       Residential mortgage                                              (4,170)       (4,114)
       Automobile                                                      (489,474)     (322,282)
       Other                                                             (7,180)       (8,175)
    Proceeds from sales of:
       Securities available for sale                                     24,707        60,517 
       Commercial mortgage loans                                         38,923             - 
       Loan servicing rights                                             35,708             - 
       Other real estate                                                  5,900         3,019 
    Principal repayments on:
       Securities available for sale                                        649         3,114 
       Securities held to maturity                                      120,265       139,490 
       Loans                                                            292,518       286,941 
    Increase in FHLB stock                                               (6,918)            - 
                                                                    ------------  ------------

        Net cash used by investing activities                           (51,081)     (231,937)
                                                                    ------------  ------------
</TABLE>


                                      -6-

<PAGE>

<TABLE>
<CAPTION>

                             RCSB FINANCIAL, INC. AND SUBSIDIARIES
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                          (Unaudited)
                                          (thousands)

                                                                          Six Months Ended
                                                                              May 31,
                                                                         1997          1996
                                                                     ------------  ------------
(Continued)
<S>                                                                  <C>           <C>

FINANCING ACTIVITIES: 
    Increase (decrease) in deposits                                      (25,771)      114,914 
    Increase in FHLB borrowings
       and repurchase agreements                                         184,322           700 
    Increase (decrease) in other repurchase agreements
       and borrowings                                                    (66,080)      151,252 
    Increase in mortgagors' escrow deposits                               25,856        20,250 
    Decrease in other liabilities                                        (15,956)      (80,234)
    Net proceeds from exercise of stock options                            1,689         1,826 
    Purchase of RCSB common stock                                        (27,261)      (40,857)
    Dividends paid on preferred stock                                          -        (2,616)
     Dividends paid on common stock                                       (4,423)       (3,224)
                                                                     ------------  ------------

        Net cash provided by financing activities                         72,376       162,011 
                                                                     ------------  ------------
 
        Increase (decrease) in cash and cash equivalents                  19,277        (4,959)

 Cash and cash equivalents at beginning of period                         56,639        78,877 
                                                                     ------------  ------------

Cash and cash equivalents at end of period                           $    75,916   $    73,918 
                                                                     ============  ============



Supplemental cash flow disclosures:
    Cash paid during the period for:
        Interest                                                     $    86,657   $    81,787 
        Income taxes                                                       7,440        12,887 
    Non-cash activities:
        Additions to other real estate through foreclosure                 4,224         4,446 


</TABLE>


                                      -7-

<PAGE>
                    RCSB FINANCIAL, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONDENSED)
                                 MAY 31, 1997
                                 (Unaudited)

1.     BASIS OF PRESENTATION

The accompanying consolidated financial statements, which include the accounts
of  RCSB Financial, Inc. and its subsidiaries (RCSB or the Company), have been
prepared  in accordance with the instructions for Form 10-Q, and therefore, do
not   include  all   information  and   footnotes  necessary  for  a  complete
presentation  of  financial  position, results of operations and cash flows in
accordance  with  generally  accepted  accounting  principles.  The  financial
statements  and the information under the heading "Management's Discussion and
Analysis  of Financial Condition and Results of Operations" are prepared under
the presumption that the interim consolidated financial statements are read in
conjunction  with  the Company's Annual Report on Form 10-K for the year ended
November 30, 1996.

In  the  opinion  of management, the unaudited, consolidated interim financial
statements  of  RCSB  Financial, Inc. and subsidiaries reflect all adjustments
(consisting of normal recurring accruals) necessary for a fair presentation of
the  statements.  The  results  of  operations  for the interim period are not
necessarily  indicative of the results of operations which may be expected for
the entire year.  For consistency among the periods presented, certain amounts
in  the  prior year's consolidated financial statements have been reclassified
to conform with the 1997 presentation.

2.     PENDING MERGER WITH CHARTER ONE FINANCIAL, INC.

On  May  21,  1997,  the  Board  of  Directors  of RCSB announced a definitive
agreement  to  merge  the  Company  with  Charter  One  Financial,  Inc.  in a
stock-for-stock  exchange.    Terms  of  the  agreement  call for the tax-free
exchange  of  0.91  shares  of  Charter  One common stock for each RCSB common
share.    The  merger,  which  is intended to be accounted for as a pooling of
interests,  is  expected  to  be  completed  in  the  fourth  quarter of 1997.
Approval  to  merge  is  required from banking regulatory authorities and both
companies'  shareholders.    In accordance with the merger agreement, RCSB has
agreed  to   abide  by  certain   covenants  regarding   operations  prior  to
consummation  of the merger.  Charter One has announced that after-tax charges
in  connection  with  the  merger  are  expected to approximate $50.0 to $60.0
million.

Concurrent  with  signing  the  definitive  merger  agreement, Charter One was
granted  an  option to purchase, under certain circumstances, 2.9 million RCSB
common  shares  at  $37.50  per  share.  Circumstances  rendering  the  option
exercisable  generally  include  (a)  actions  by RCSB designed to result in a
merger  with  or  sale  of  significant  assets  to  a  third  party,  (b) the
acquisition  of  20%  or  more  of  RCSB's  common stock by a third party, (c)
withdrawal  by  RCSB's  Board of Directors of the recommendation to merge with
Charter  One  or (d) failure of RCSB's shareholders to approve the Charter One
merger.   The option agreement carries certain other features applicable under
indicated  circumstances,  such  as  the  requirement that RCSB repurchase the
unexercised  portion  of  the  option  and securities purchased by Charter One
pursuant to the option at a specified price.

3.     ACCOUNTING CHANGES

RCSB  adopted  Financial  Accounting  Standards Board (FASB) Statement No. 121
entitled  "Accounting  for  the  Impairment  of  Long-Lived  Assets   and  for
Long-Lived  Assets  to  Be  Disposed


                                      - 8 -

<PAGE>

Of"  on December 1, 1996.  The statement requires  that long-lived  assets and
certain identifiable  intangibles to  be held   and  used  by  a  company   be
reviewed for impairment whenever events or changes  in  circumstances indicate
the    carrying      amount      of      an      asset     may     not      be
recoverable.    In  performing  the  review  for recoverability, companies are
required  to estimate the future cash flows expected to result from the use of
the  asset  and  its eventual disposition.  Under Statement 121, an impairment
loss  is  recognized  if the sum of the undiscounted future cash flows is less
than  the  carrying  amount  of  the  asset.    The statement also establishes
standards  for  recording  an  impairment  loss  for certain assets subject to
disposal.  Excluded from the scope of the statement are financial instruments,
mortgage and other loan servicing assets, deposit intangibles and deferred tax
assets.    Implementing the provisions of Statement 121 had no material impact
on the Company's consolidated financial statements on the date of adoption.

RCSB  adopted  the  disclosure requirements of FASB Statement No. 123 entitled
"Accounting for Stock-Based Compensation" effective December 1, 1996.  Related
disclosures  will  be  included  in the Company's financial statements for the
full  year  ending  November  30,  1997.   Statement 123 permits, but does not
require,  companies  to  use  a  fair-value-based  method  of  accounting  for
stock-based  compensation plans including stock options and stock appreciation
rights.   Under the fair value method, compensation cost is measured as of the
date stock awards are granted based on the value of the awards, and expense is
generally  recognized  over  the  vesting  period. Companies such as RCSB that
elect  to  continue  using  the  intrinsic-value-based method under Accounting
Principles  Board  (APB)  Opinion  No.  25,  are required to provide pro forma
disclosures  of  net  income  and  net  income  per  share in annual financial
statements  to show the effect of applying the fair-value-based method.  Under
the  intrinsic  method, compensation cost is the excess, if any, of the market
price  of the stock as of the grant date over the amount employees must pay to
acquire the stock or over the price established for determining  appreciation.
Under  RCSB's  compensation  policies, there is no such excess on the dates of
grant.

On  January  1, 1997, RCSB adopted FASB Statement No. 125 entitled "Accounting
for  Transfers  and  Servicing  of  Financial  Assets  and  Extinguishments of
Liabilities,"  which  provides   guidance  for  distinguishing   transfers  of
financial  assets  that are sales from transfers that are  secured borrowings.
The  statement  requires  the  application  of a financial-components approach
which,  following  a  transfer, results in recognizing in financial statements
the assets an entity controls and removing from financial statements assets it
no longer controls.  A transferor has surrendered control, in general, only if
the  transferred  assets  have  been legally isolated from the transferor, the
transferee  obtains the right to pledge or exchange the assets and there is no
agreement that entitles or obligates the transferor  to repurchase the assets.
Liabilities  are  eliminated  from  financial  statements  only  when they are
extinguished.    The  new standard applies to all transactions occurring after
December  31,  1996,  except those involving collateral pledges and securities
repurchase  agreements  for   which  the  rule  change  is  delayed  one year.
Application  of  the  pronouncement had no material effect on the consolidated
financial position of RCSB.

4.     CERTAIN COMMON STOCK TRANSACTIONS

Commencing  in  October  1996,  RCSB's  Board  of  Directors   authorized  the
repurchase  of  up  to  1.5   million  shares  of  the Company's common stock.
Repurchases had been terminated as a result of the pending merger with Charter
One  Financial,  Inc.    Prior  to  such  termination, 947,100 shares had been
repurchased at a cost of $28.9 million.

On June 25, 1997, the Board of Directors declared a cash dividend of $0.15 per
common  share,  payable  August  1, 1997 to shareholders of record on July 15,
1997.


                                      -9-

<PAGE>

5.     NET INCOME PER SHARE

Primary net income per common share amounts for the three and six months ended
May  31,  1997  and  1996  were  computed  by  dividing net income, reduced by
preferred  stock  dividends  in 1996, by the weighted average number of common
shares and, in 1997, common stock equivalents  outstanding during the periods.
The  weighted  average  number  of  common  shares utilized in the calculation
totaled  14,941,966 and 12,921,063 for the three months ended May 31, 1997 and
1996, respectively, and 15,182,961 and 13,324,966 for the six months ended May
31,  1997  and  1996,  respectively.    The  1997 second quarter and six-month
amounts  included  common  stock  equivalents  totaling  404,469  and 411,787,
respectively, relating to outstanding stock options.

Fully  diluted  net income per common share for the three and six months ended
May  31,  1997  was  computed  by  dividing net income by the weighted average
number  of  common  and  common  equivalent  shares outstanding.  For the 1996
periods,  net  income was divided by the sum of the weighted average number of
common  shares  outstanding  and the common shares issuable if all outstanding
preferred shares were converted to common at the beginning of the period.  The
weighted  average  number  of  common  shares  utilized totaled 14,998,306 and
17,590,969  for  the  three months ended  May 31, 1997 and 1996, respectively,
and  15,248,258 and 17,994,894 for the six months ended May 31, 1997 and 1996,
respectively.   Common stock equivalents of 460,809 and 477,084, respectively,
were included in the 1997 second quarter and six-month amounts.  There were no
materially dilutive common stock equivalents in 1996.

6.     RECENTLY ISSUED ACCOUNTING STANDARDS

In  February  1997,  the  FASB issued Statement No. 128 entitled "Earnings per
Share."  The  statement  revises  standards  for  computing and presenting net
income  per share by (a) replacing primary net income per share with basic net
income  per  share,  (b)  requiring dual presentation of basic and diluted net
income  per  share  for  entities  with  complex  capital  structures  and (c)
requiring  a reconciliation of the basic net income per share computation with
diluted  net  income  per  share.  Basic net income per share is calculated by
dividing  net  income available to common shareholders by the weighted-average
number  of  common  shares outstanding for the period, without considering the
dilutive effect of potentially issuable common shares.  Diluted net income per
share includes the effect of potential dilution that could occur if securities
or  other  contracts  to  issue  common stock were exercised or converted into
common  shares.    This statement is effective beginning in RCSB's 1998 fiscal
year,  and  all  prior earnings per share data will be restated at the time of
adoption.    Under the provisions of Statement 128, earnings per share for the
periods ending May 31, 1997 would be as follows.

<TABLE>
<CAPTION>

                               May 31, 1997
                               ------------
                      Three Months   Six Months
                             Ended        Ended
                            ------       ------
<S>                         <C>          <C>

Basic earnings per share    $ 0.57       $ 1.21
Diluted earnings per share    0.55         1.18
</TABLE>


                                      -10-
<PAGE>

In  June  1997,  the  FASB  issued  Statement  No.  130  entitled   "Reporting
Comprehensive  Income."  The statement establishes standards for the reporting
and  display  of  comprehensive income and its components (revenues, expenses,
gains   and  losses)  in  a  full set of general purpose financial statements.
Comprehensive  income  is  defined  as  the  change  in  equity  of a business
enterprise   during  a  period  from   transactions   and  other   events  and
circumstances  from  nonowner  sources.  The impact of adopting Statement 130,
which is effective for RCSB's 1999 fiscal year, has not been determined.

In  June  1997,  the  FASB also issued Statement No. 131 entitled "Disclosures
about  Segments  of  an  Enterprise  and  Related Information."  The statement
requires  publicly-held  companies  to  report financial and other information
about  key revenue-producing segments of the entity for which such information
is  available and is utilized by the chief operating decision maker.  Specific
information  to  be  reported for individual segments includes profit or loss,
certain  revenue  and  expense  items  and  total assets.  A reconciliation of
segment  financial information to amounts reported in the financial statements
would  be  provided.  Statement 131 is  effective for RCSB's 1998 fiscal year.
At  the  present  time,  the  effect  of  adopting  the statement has not been
determined.


                                      -11-

<PAGE>

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

RESULTS OF OPERATIONS

RCSB  Financial,  Inc.  and  subsidiaries earned net income of $8.2 million or
$.55 per fully diluted share for the three months ended May 31, 1997, compared
to  $9.5  million  or  $.54  per share in the second quarter of 1996.  For the
first six months of 1997, RCSB's net income totaled $17.9 million or $1.18 per
share  compared  to  $19.2  million  or $1.07 per share in 1996.  Earnings per
fully diluted share in the 1997 second quarter and six-month periods increased
by  1.9%  and  10.3%,  respectively.  Common stock repurchases during 1996 and
1997  favorably  affected  earnings  per  share while resulting in incremental
interest  expense.    RCSB's  earnings in the three and six month periods were
affected by higher stock-based compensation costs attributable to the recently
announced  merger  and the attendant increase in market price of the Company's
common stock.

Earnings  in  the  second  quarter  were also influenced by a higher loan loss
provision  and  greater operating expenses relating to the expansion of RCSB's
lending networks.  Partially offsetting the higher level of expenditures was a
rise in mortgage banking revenues generated by a $2.2 million gain on the sale
of mortgage servicing rights.

On  May  21,  1997,  the  Board  of  Directors  of RCSB announced a definitive
agreement  to  merge  the  Company  with  Charter  One  Financial,  Inc.  in a
stock-for-stock  exchange.    Terms  of  the  agreement  call for the tax-free
exchange  of  0.91  shares  of  Charter  One common stock for each RCSB common
share.    The  merger,  which  is intended to be accounted for as a pooling of
interests,  is  expected  to  be   completed  in  the  fourth quarter of 1997.
Approval  to  merge  is  required from banking regulatory authorities and both
companies'  shareholders.    In accordance with the merger agreement, RCSB has
agreed  to  abide  by   certain  covenants   regarding   operations  prior  to
consummation  of the merger.  Charter One has announced that after-tax charges
in  connection  with  the  merger  are  expected to approximate $50.0 to $60.0
million.

Concurrent  with  signing  the  definitive  merger  agreement, Charter One was
granted  an  option to purchase, under certain circumstances, 2.9 million RCSB
common  shares  at  $37.50  per  share.  Circumstances  rendering  the  option
exercisable  generally  include  (a)  actions  by RCSB designed to result in a
merger  with  or  sale  of  significant  assets  to  a  third  party,  (b) the
acquisition  of  20%  or  more  of  RCSB's  common stock by a third party, (c)
withdrawal  by  RCSB's  Board of Directors of the recommendation to merge with
Charter  One  or (d) failure of RCSB's shareholders to approve the Charter One
merger.   The option agreement carries certain other features applicable under
indicated  circumstances,  such  as  the  requirement that RCSB repurchase the
unexercised  portion  of  the  option  and securities purchased by Charter One
pursuant to the option at a specified price.


                                      -12-

<PAGE>

Second Quarter Review

Net  interest  income  grew  by 1.1% to $33.4 million in the second quarter of
1997  from $33.0 million in 1996.  A 27.9% increase in average automobile loan
outstandings,  combined with a widening of the average spread between interest
rates  on  RCSB's  asset and liability portfolios, produced greater amounts of
net  interest  income.    Loan  growth was funded by higher levels of customer
deposits and repayments received on the Company's portfolio of mortgage-backed
securities.    Net  interest  income  was also affected by interest expense on
borrowings utilized by RCSB to repurchase common stock.

Automobile  loan  originations  rose  74.0%  to  $315.2  million in the second
quarter  of  1997  from  $181.1  million  in  1996.   Higher originations were
achieved  both  in  existing markets and by entering new markets.  In December
1996,  American Credit Services, Inc. (ACSI), the Company's automobile lending
subsidiary,  expanded  into  the  mid-Atlantic  market  with  the opening of a
regional  office  in  Baltimore,  Maryland.    Opportunities for expansion are
considered by ACSI on an ongoing basis.

The  growth in RCSB's overall interest rate spread to 3.43% in 1997 from 3.25%
in  1996   resulted  from   a   0.18%  increase  in  the  average   yield   on
interest-earning  assets  without  any  increase   in  the   average  rate  on
interest-bearing  liabilities.    Relatively  stable interest rates during the
past year coupled with an increase in the portion of RCSB's assets invested in
automobile  loans  have  resulted  in  the  Company's  greater overall spread.
Automobile loans, which have carried wider spreads over the cost of funds than
residential mortgage-related assets, totaled 31.5% of average interest-earning
assets  in  the  second  quarter of 1997, up from 24.6% in 1996.  Net interest
margin,  which  is  influenced  by  the  overall  interest rate spread and the
relationship  of  interest-earning  asset  volumes  to  interest-bearing
liabilities, rose to 3.56% in 1997 from 3.52% in 1996.

The  following  table  presents information for the second quarter of 1997 and
1996  regarding interest yields and rates, average earning asset and liability
volumes,  and  the allocation of interest variations between amounts caused by
volumes and amounts attributable to rates.  No tax equivalent adjustments have
been made for minor amounts of tax-exempt income earned by RCSB.


                                      -13-

<PAGE>

<TABLE>
<CAPTION>


                         AVERAGE BALANCES, YIELDS AND RATES AND CHANGES IN INTEREST INCOME AND EXPENSE
                                                    (dollars in thousands)

                                                       Three Months Ended
                                 --------------------------------------------------------------
                                          MAY 31, 1997                     May 31, 1996
                                 --------------------------------------------------------------
                                                                                                   Change
                                  Average               Yield/    Average               Yield/       in       Change due to
                                  Balance    Interest    Rate     Balance    Interest    Rate     Interest    Volume     Rate
                                 ----------  ---------  -------  ----------  ---------  -------  ----------  --------  --------
<S>                              <C>         <C>        <C>      <C>         <C>        <C>      <C>         <C>       <C>

INTEREST-EARNING
 ASSETS:
 Federal funds and
   interest-bearing  deposits    $    3,952  $     131   13.26%  $   13,064  $      67    2.05%  $      64   $   (76)  $   140 
 Mortgage-backed and
  other securities                1,642,975     28,382    6.91    1,723,727     30,098    6.98      (1,716)   (1,398)     (318)
 Loans receivable, net            2,099,360     47,645    9.08    2,013,599     44,348    8.81       3,297     1,922     1,375 
                                 ----------  ---------           ----------  ---------           ----------  --------  --------
  Total interest-
    earning assets               $3,746,287     76,158    8.13   $3,750,390     74,513    7.95       1,645       448     1,197 
                                 ==========  ---------           ==========  ---------           ----------  --------  --------

INTEREST-BEARING
 LIABILITIES:
 Transaction, money market
  and savings deposits           $1,096,462      6,577    2.38   $1,057,130      6,195    2.33         382       234       148 
 Term deposits                    1,357,972     19,447    5.68    1,309,334     18,908    5.74         539       696      (157)
                                 ----------  ---------           ----------  ---------           ----------  --------  --------
   Total deposits                 2,454,434     26,024    4.21    2,366,464     25,103    4.22         921       930        (9)

 FHLB borrowings
   and repurchase agreements        702,131     10,200    5.76      692,364      9,944    5.71         256       141       115 
 Other repurchase agreements
   and borrowings                   456,343      6,562    5.70      456,417      6,457    5.63         105        (1)      106 
                                 ----------  ---------           ----------  ---------           ----------  --------  --------
  Total interest-
    bearing liabilities          $3,612,908     42,786    4.70%  $3,515,245     41,504    4.70%      1,282     1,070       212 
                                 ==========  ---------           ==========  ---------           ----------  --------  --------

 Net interest income                         $  33,372                       $  33,009           $     363   $  (622)  $   985 
                                             =========                       =========           ==========  ========  ========

Excess of interest-earning
   assets over interest-bearing
   liabilities                   $  133,379                      $  235,145

RATIOS:
 Interest rate spread                                     3.43%                           3.25%
 Net interest margin                                      3.56                            3.52 

</TABLE>



RCSB's  provision  for  loan  losses was $4.1 million in the second quarter of
1997,  compared to $3.5 million in the prior year.  The increased provision in
1997  was  primarily  due to growth in the automobile loan portfolio resulting
from  higher volumes of loan originations in the quarter, and higher levels of
auto  loan charge offs.  Nationwide trends in the collection of consumer loans
have  affected  the Company's automobile loan portfolio, resulting in somewhat
higher  delinquencies  and  charge  offs  compared  with  the year ago period.
Delinquency  trends  in the Company's automobile loan portfolio have improved,
however, since the first quarter of 1997.


                                      -14-

<PAGE>

Also affecting the loan loss allowance in the second quarter was the sale of a
significant  portion  of  RCSB's  remaining commercial loan portfolio.  In May
1997,  the  Company sold $41.3 million of performing commercial mortgage loans
for  a  loss  of  $0.3  million,  after  deducting  $2.0  million of allocated
allowances from carrying value.  At May 31, 1997, RCSB allocated $18.9 million
of  its  allowance  for  loan  losses  to automobile loans and $1.6 million to
commercial  loans,  representing  1.52%   and  12.70%,  respectively,  of  the
outstanding loan portfolios.

The  adequacy of the Company's loan loss allowance is evaluated quarterly with
consideration  given  to  the  status  of  particular  loans, the general risk
characteristics  of the loan portfolio, historical charge-offs and recoveries,
the  regulatory  environment,  current  appraisals  and  economic  and  market
conditions.    As  of  May  31, 1997, RCSB's allowance for loan losses totaled
$26.3  million  or 104.2% of nonperforming loans, compared to $28.2 million or
116.7%  of  nonperforming  loans  at  November  30, 1996.  The average for all
publicly-held  thrift  institutions  was  approximately 72% as of December 31,
1996.

Mortgage  banking  noninterest  income  totaled  $13.9  million  in the second
quarter  of  1997,  compared  to $12.1 million in 1996.  The increase resulted
from  a  pretax  gain  of  $2.2  million generated by the sale of servicing on
$838.3  million  of  residential  mortgage  loans,  partially  offset by lower
revenue  from  the  sales  of loans originated for sale.  Residential mortgage
loan  originations  at  American  Home  Funding,  Inc.  (AHF), RCSB's mortgage
banking  subsidiary,  were  $419.0 million during the second quarter, slightly
lower than $421.6 million in the prior year. AHF's portfolio of loans serviced
for  others declined to $7.6 billion at May 31, 1997, compared to $9.0 billion
at November 30, 1996 and $9.4 billion at May 31, 1996.

RCSB's  retail  banking  unit,  Rochester  Community  Savings  Bank, generated
noninterest  income of $2.1 million in the second quarter of 1997, compared to
$2.7  million  in 1996.  The decrease in revenue relates to the September 1996
transfer  of  securities  brokerage  activities  to an independent third party
which  offers  securities  products and services through RCSB's retail banking
offices.  Earnings  in  this  category  represent  fees  and  service  charges
collected  for  various  deposit-related  activities, revenues from the bank's
insurance  sales  operation  and  prior  to  September  1996, commissions from
securities brokerage activities. Deposit-related fees and service charges rose
by  $0.2  million in the 1997 quarter due to the Company's continued expansion
in  the  Buffalo,  New  York  market.  One branch office was opened during the
first  quarter  of  1997, and in June 1997, RCSB opened two additional offices
bringing  the  total  number  in Buffalo to 17.  Revenues from insurance sales
activities  increased  by  $0.2  million in 1997 due to greater sales of fixed
annuity products.

Automobile  loan banking noninterest income was less than $0.1 million for the
second  quarter  of 1997, compared to $1.1 million in 1996.  While ACSI earned
loan servicing fees in 1996 from securitized automobile loans owned by others,
the securities matured in 1996.

There were no gains or losses from securities sales in the 1997 second quarter
compared  to $1.0 million in 1996.  RCSB sold $59.5 million of mortgage-backed
securities  from  the  available-for-sale  portfolio  in  1996  in response to
interest rate-related market opportunities.

Operating  expenses  in the second quarter of 1997 were $32.5 million compared
to $31.9 million in the prior year. The increase was primarily attributable to
higher  expenses  associated with the expansion of lending networks at AHF and
ACSI  and  incremental  accruals  for stock-based compensation costs resulting
from  a  21.7%  increase  in  RCSB's  stock  price  in the 1997 quarter. These
expenses  were  partially  offset  by  a  reduction  in  the  cost of carrying
foreclosed real estate.


                                      -15-

<PAGE>

The  Company's  effective  tax  rate  was 34.5% in the second quarter of 1997,
compared  to  35.0%  in  1996.    Reductions  in RCSB's deferred tax valuation
allowance  during  both  years  were  the  largest  factors accounting for the
difference from normal rates of approximately 41.0%.

Six Month Review

For  the  first  six  months  of  1997,  RCSB's  net interest income was $65.6
million,  compared  to  $64.7  million  in  the  prior year.  The increase was
largely  due  to  a  25.5%  rise in average automobile loans outstanding and a
wider  average  interest  rate  spread.   Automobile loan originations for the
first six months of 1997 totaled $489.5 million, up 51.9% from the prior year.
RCSB's  interest  rate  spread  climbed  to  3.31% in 1997 from 3.12% in 1996,
primarily  due to a widening of general marketplace spreads between short-term
and  intermediate-term  interest  rates  and  an increase in the percentage of
RCSB's  assets invested in automobile loans.  Net interest margin was 3.51% in
both 1997 and 1996.

The  following table presents information regarding interest yields and rates,
average  earning  asset  and liability volumes, and the allocation of interest
variations between amounts caused by volumes and amounts attributable to rates
for the six months ended May 31, 1997 and 1996.  No tax equivalent adjustments
have been made for minor amounts of tax-exempt income earned by RCSB.


                                      -16-

<PAGE>

<TABLE>
<CAPTION>

                         AVERAGE BALANCES, YIELDS AND RATES AND CHANGES IN INTEREST INCOME AND EXPENSE
                                                    (dollars in thousands)

                                                        Six Months Ended
                                 --------------------------------------------------------------
                                           MAY 31, 1997                    May 31, 1996
                                 --------------------------------------------------------------
                                                                                                   Change
                                  Average               Yield/    Average               Yield/       in        Change due to
                                  Balance    Interest    Rate     Balance    Interest    Rate     Interest    Volume     Rate
                                 ----------  ---------  -------  ----------  ---------  -------  ----------  --------  --------
<S>                              <C>         <C>        <C>      <C>         <C>        <C>      <C>         <C>       <C>

INTEREST-EARNING
 ASSETS:
 Federal funds and
   interest-bearing  deposits    $    5,974  $     222    7.43%  $   13,571  $     263    3.88%  $     (41)  $  (198)  $   157 
 Mortgage-backed and
  other securities                1,674,658     57,651    6.89    1,686,146     57,525    6.82         126      (393)      519 
 Loans receivable, net            2,060,013     92,581    8.99    1,990,589     87,948    8.84       4,633     3,103     1,530 
                                 ----------  ---------           ----------  ---------           ----------  --------  --------
  Total interest-
    earning assets               $3,740,645    150,454    8.04   $3,690,306    145,736    7.90       4,718     2,512     2,206 
                                 ==========  ---------           ==========  ---------           ----------  --------  --------

INTEREST-BEARING
 LIABILITIES:
 Transaction, money market
  and savings deposits           $1,076,962     12,949    2.41   $1,035,454     12,163    2.35         786       493       293 
 Term deposits                    1,363,179     38,609    5.68    1,298,199     37,893    5.84         716     1,853    (1,137)
                                 ----------  ---------           ----------  ---------           ----------  --------  --------
    Total deposits                2,440,141     51,558    4.24    2,333,653     50,056    4.29       1,502     2,346      (844)

 FHLB borrowings
   and repurchase agreements        708,706     20,424    5.78      627,520     18,350    5.85       2,074     2,336      (262)
  Other repurchase agreements
   and borrowings                   447,621     12,870    5.77      429,458     12,598    5.87         272       523      (251)
                                 ----------  ---------           ----------  ---------           ----------  --------  --------
  Total interest-
     bearing liabilities         $3,596,468     84,852    4.73%  $3,390,631     81,004    4.78%      3,848     5,205    (1,357)
                                 ==========  ---------           ==========  ---------           ----------  --------  --------

Net interest income                          $  65,602                       $  64,732           $     870   $(2,693)  $ 3,563 
                                             =========                       =========           ==========  ========  ========

 Excess of interest-earning
   assets over interest-bearing
   liabilities                   $  144,177                      $  299,675

RATIOS:
 Interest rate spread                                     3.31%                           3.12%
 Net interest margin                                      3.51                            3.51 
</TABLE>



RCSB's  provision for loan losses totaled $8.1 million in the first six months
of  1997  compared  to  $6.2  million  in 1996.  Growth in the automobile loan
portfolio  and  higher  charge off levels produced a corresponding requirement
for  greater  loan  loss  provisions.    Partially  offsetting the increase in
automobile  loan  provisions  was  a  decrease  in requirements for commercial
mortgage allowances due to the reduced size of the portfolio.

Mortgage  banking  noninterest  income was $29.9 million in 1997 up 33.6% from
$22.4  million  in  the prior year.  The increase is primarily attributable to
two  sales  of  servicing  on residential mortgage loans which produced pretax
gains totaling $5.8 million.  Residential mortgage originations at AHF totaled
$741.0 million during the first six months of 1997, compared to $748.8 million
in 1996.



                                      -17-

<PAGE>

Retail  banking  fees  and  service charges earned for various deposit-related
activities  grew by $0.4 million in the first six months of 1997.  The overall
decline  in  retail  banking  noninterest  income  resulted from the late 1996
transfer  of  RCSB's  securities  brokerage  business  to an independent third
party.    In  1997,  the  Company  receives  expense  reimbursements  from the
independent third party which operates in RCSB's banking offices.

Operating  expenses  incurred  during  the first six months of 1997 were $62.7
million  compared  to $59.1 million in the prior year.  Higher expenses at AHF
and ACSI, resulting from the expansion of loan origination networks, and costs
associated with stock-based compensation were partially offset by a decline in
other real estate expenses.

The  Company's  effective  tax  rate  was 37% in 1997 compared to 35% in 1996,
reflecting  reductions  in  the  deferred  tax valuation allowance during both
years.


FINANCIAL CONDITION

At  May  31,  1997,  RCSB's  total assets were $4.10 billion compared to $4.01
billion  at  November  30,  1996.  Loans at the end of the 1997 second quarter
totaled  $2.20 billion compared to $2.02 billion at November 30, 1996.  Growth
in  the automobile loan portfolio, which increased to $1.24 billion at May 31,
1997  from  $994.7  million  at the end of the 1996 fiscal year, was partially
offset  by a decrease in residential mortgage loans and the sale of commercial
mortgage loans.

Securities  held  to  maturity  declined  to  $1.54  billion  at May 31, 1997,
compared  to $1.64 billion at November 30, 1996.  Deposits of $2.34 billion at
May  31, 1997 decreased from $2.37 billion at November 30, 1996.  Federal Home
Loan Bank borrowings, repurchase agreements and other borrowings totaled $1.23
billion at May 31, 1997, compared to $1.11 billion at November 30, 1996.

At  May 31, 1997, the Company's portfolios are liability sensitive to interest
rate changes in the one-year timeframe to the extent of 10.1% of total assets.
The  one-year gap was  liability sensitive to  the extent of 6.9% of assets at
November  30, 1996.  Shareholders' equity totaled $312.6 million or $21.42 per
common  share at May 31, 1997, compared to $323.9 million or $21.12 per common
share  at  November  30,  1996.  The decrease in shareholders' equity resulted
from purchases of RCSB's common stock.  The Company's stock repurchase program
was terminated in view of the pending merger  with Charter One Financial, Inc.
A  total of 0.9 million treasury shares with a cost of $28.9 million were held
by RCSB as of May 31, 1997.


                                      -18-

<PAGE>

In  accordance  with  requirements  of the FDIC and the New York State Banking
Department, the Company's subsidiary, Rochester Community Savings Bank and its
subsidiaries  (collectively,  the Bank), must meet certain measures of capital
adequacy  with respect to leverage and risk-based capital.  At March 31, 1997,
the  most recent FDIC reporting date, the Bank's capital ratios were in excess
of required levels as shown in the table below.

<TABLE>
<CAPTION>


                            BANK CAPITAL ADEQUACY
                                March 31, 1997


                                 Actual   Required   Excess
                                 --------------------------
<S>                              <C>      <C>        <C>


Core (Tier 1) leverage capital     7.25%      4.00%    3.25%

Risk-Based capital:
          Core (Tier 1) capital   10.52       4.00     6.52 
          Total capital           11.49       8.00     3.49 

</TABLE>



On June 30, 1997, the Board of Directors declared a cash dividend of $0.15 per
common  share,  payable  August  1, 1997 to shareholders of record on July 15,
1997.

Allowance for Loan Losses and Nonperforming Assets

The  determination  of  the  allowance  for  loan  losses  is based on ongoing
analyses  of  the loan portfolio and reflects an amount which, in management's
judgment,  is  adequate to provide for potential losses. While management used
all  currently  available  information  to  determine   the  adequacy  of  the
allowance,  future additions may be necessary based on changes in economic and
market  conditions, possible changes in strategies for resolving problem loans
and  specific  borrower situations.  In addition, various regulatory agencies,
as  an  integral  part  of  the  examination  process, periodically review the
Company's  allowance  for  losses  on  loans.    Such agencies may require the
Company to recognize additions to the allowance based on their judgments about
information available at the time of their examinations.  RCSB's allowance for
loan  losses  at  May  31,  1997  equaled 104.2% of nonperforming loans, which
exceeded  the average of approximately 72% for all publicly-held thrifts as of
December  31,  1996,  the  most  recent  date  for  which  such information is
available.  Activity in RCSB's loan loss allowance during the first six months
of  1997  and  1996 and the allocation of the allowance for loan losses at May
31, 1997 and November 30, 1996 are presented below.


                                      -19-

<PAGE>

<TABLE>
<CAPTION>

                          ALLOWANCE FOR LOAN LOSSES
                            (dollars in thousands)

                                              Six Months Ended
                                                  May 31,
                                             1997          1996
                                         ------------  ------------
<S>                                      <C>           <C>

Beginning balance                        $    28,190   $    26,091 

Provision for loan losses                      8,092         6,220 
Loan charge offs                             (10,191)       (8,090)
Loan recoveries                                2,294         2,646 
Allowances allocated to
  commercial mortgage loans sold              (2,048)            - 
                                         ------------  ------------
Ending balance                           $    26,337   $    26,867 
                                         ============  ============

Annualized net charge-offs as a percent
  of average loans:
     Residential mortgage                       0.23%         0.22%
     Automobile                                 1.17          0.68 
     Commercial mortgage                        0.10          2.75 
     Consumer and other                         1.19          1.34 
                                         ------------  ------------
            Total                               0.76%         0.54%
                                         ============  ============

Allowance as percent of:
     Nonperforming loans                       104.2%        102.7%
     Nonperforming assets                       83.9%         85.5%
     Total loans                                1.18%         1.30%

</TABLE>



                                      -20-

<PAGE>

<TABLE>
<CAPTION>

                   ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
                            (dollars in thousands)


                            MAY 31,         November 30,
                             1997               1996
                      -----------------  -------------------
                                     As                   As
                                Percent              Percent
                                     of                   of
                                Related              Related
                       Amount     Loans    Amount      Loans
                      --------  -------   --------   -------
<S>                   <C>       <C>       <C>        <C>

Residential mortgage  $  4,643     0.53%  $  4,345     0.48%
Automobile              18,865     1.52     11,261     1.13 
Commercial mortgage      1,618    12.70     11,190    20.26 
Consumer and other       1,211     1.31      1,394     1.63 
                      --------  --------  ---------  --------
     Total            $ 26,337     1.18%  $ 28,190     1.38%
                      ========  ========  ========   ========
</TABLE>


Following  the  May  1997  sale  of  commercial  mortgage  loans,  the Company
reallocated  a portion of its loan loss allowance from the commercial mortgage
loan  category to the automobile loan category.  RCSB's remaining portfolio of
commercial  mortgage  loans  declined  to $12.7 million at the end of the 1997
second  quarter,  compared  to $55.2  million as of the prior fiscal year end.
The portion of the Company's allowance for loan losses allocated to automobile
loans was $18.9 million or 1.52% of the outstanding portfolio at May 31, 1997,
while  annualized net automobile loan charge offs for the three and six months
ending May 31, 1997 totaled 1.07% and 1.17%, respectively, of average loans.


                                      -21-

<PAGE>

The  Company's  nonperforming  asset  disclosures  encompass nonaccrual loans,
loans past due 90 days and accruing, restructured loans and other real estate.
  Total  nonperforming  assets  at May 31, 1997 were $31.4 million compared to
$30.4  million  at  November  30,  1996.    The  following  table   summarizes
nonperforming  assets as of the end of the second quarter and the prior fiscal
year.

<TABLE>
<CAPTION>


                             NONPERFORMING ASSETS
                            (dollars in thousands)
 
                                         MAY 31,    November 30,
                                          1997          1996
                                      ------------  ------------

<S>                                   <C>             <C>

Nonaccrual loans                      $    18,968   $    19,545 
Loans past due 90 days and accruing         6,313         4,608 
                                      ------------  ------------
  Total nonperforming loans                25,281        24,153 
Other real estate, net of allowances        6,111         6,212 
                                      ------------  ------------
  Total nonperforming assets          $    31,392   $    30,365 
                                      ============  ============
 Nonperforming loans as percent of
   total loans                               1.14%         1.18%

 Nonperforming assets as percent of
   total assets                              0.76%         0.76%

</TABLE>



                                      -22-

<PAGE>

                    RCSB FINANCIAL, INC. AND SUBSIDIARIES

                        PART II - OTHER INFORMATION

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The  Annual  Meeting of Shareholders of RCSB Financial, Inc. was held on April
9,  1997.    Of  the 14,825,880 shares eligible to vote at the annual meeting,
12,383,500  shares  were represented in person or by proxy for the election of
directors,  approval  of  the 1997 Long-Term Incentive Plan and appointment of
independent auditors.  The following is a summary of matters voted upon at the
meeting.

<TABLE>
<CAPTION>

                                                  Number of Votes
                                    ---------------------------------------------

                                                               Broker
                                       For      Withheld    Non-Votes
                                    ----------  ---------   ----------       
<S>                                 <C>         <C>        <C>          <C>

Nominees for Director for Three-
Year Term Expiring in 2000:

   Matthew Augustine                12,257,932    124,400        1,168
   Karen D. Petrou                  12,257,575    124,757        1,168
   Leonard Schutzman                12,257,440    124,892        1,168
   John P. Tierney                  12,258,761    123,571        1,168

                                                                           Broker
                                        For      Against   Abstentions  Non-Votes
                                    ----------  ---------  -----------  ---------

Approval of the Company's 1997
Long-Term Incentive Plan            10,725,368  1,493,532      163,432      1,168

Ratification  of   Appointment  of
KPMG  Peat  Marwick   LLP   as
Independent Auditors                12,276,911     72,856       32,565      1,168
</TABLE>



                                      -23-

<PAGE>

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

     (A)     Exhibits

          Exhibit
          Number          Document
          -------         --------  
          2      Agreement and Plan of Merger and Reorganization dated May 21,
                 1997, by and among Charter One Financial, Inc., Charter
                 Michigan Bancorp, Inc., Charter One Bank, F.S.B., RCSB 
                 Financial, Inc. and Rochester Community Savings Bank

          10     Stock Option Agreement, dated May 21, 1997, between Charter
                 One Financial, Inc. and RCSB Financial, Inc.

          27     Article 9 Financial Data Schedule


     (B)     Reports on Form 8-K

     None


                                      -24-

<PAGE>

                                  SIGNATURES


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



                                             RCSB FINANCIAL, INC.
                                             --------------------
                                                 (registrant)




      July 14, 1997                          /s/ Leonard S. Simon
     ----------------                        --------------------
         Date                                Leonard S. Simon
                                             Chairman of the Board, President
                                             and Chief Executive Officer



      July 14, 1997                          /s/ Paul R. Wuest
     ----------------                        -----------------
         Date                                Paul R. Wuest
                                             Senior Vice President and
                                             Chief Financial Officer


                                      -25-

<PAGE>
                                EXHIBIT INDEX


     Regulation
     S-K Exhibit
     Number                    Document
     ------                    --------
     2          Agreement and Plan of Merger and Reorganization dated
                May 21, 1997, by and among Charter One Financial, Inc.,
                Charter Michigan Bancorp, Inc., Charter One Bank, F.S.B.,
                RCSB Financial, Inc. and Rochester Community Savings Bank

     10         Stock Option Agreement, dated May 21, 1997, between Charter
                One Financial, Inc. and RCSB Financial, Inc.

     27         Article 9 Financial Data Schedule


                                      -26-

<PAGE>