Greene County Bancorp Inc – ‘424B3’ on 11/25/98

As of:  Wednesday, 11/25/98   ·   Accession #:  1047469-98-42343   ·   File #:  333-63681

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Prospectus   —   Rule 424(b)(3)
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 1: 424B3       Prospectus                                           125    704K 

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PROSPECTUS                                                                      
Up to 1,096,958 shares of common stock               GREENE COUNTY BANCORP, INC.
                                                                 425 Main Street
                                                   Catskill, New York 12414-1300
                                                                  (518) 943-3700

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     Greene County Savings Bank, a New York-chartered savings bank (the "Bank"),
is reorganizing from a mutual savings bank to the mutual holding company form of
organization (the "Reorganization"). As part of the Reorganization, the Bank    
will convert to stock form, change its name to "The Bank of Greene County," and 
become a wholly owned subsidiary of Greene County Bancorp, Inc., a Delaware     
corporation (the "Company"). The Company will become the majority-owned         
subsidiary of Greene County Bancorp, MHC, a New York-chartered mutual holding   
company (the "Mutual Company"). Concurrently with the Reorganization, the       
Company is offering for sale shares of its common stock, par value $.10 per     
share (the "Common Stock"), to depositors (pursuant to subscription rights), the
Bank's tax-qualified employee benefit plans including its employee stock        
ownership plan, and to employees, officers and trustees of the Bank. Any        
unsubscribed shares of Common Stock may be offered for sale to the public in a  
community offering or syndicated community offering (the subscription and       
community offerings are referred to collectively as the "Offering"). The        
Reorganization and the Offering are being made pursuant to the terms of a plan  
of reorganization which must be approved by the depositors of the Bank and by   
federal and state banking regulators. The Reorganization will not go forward if 
the Bank does not receive these approvals, or if the Company does not sell at   
least a minimum number of the shares of Common Stock offered.                   

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TERMS OF OFFERING 

  An independent appraiser has estimated the pro forma market value of the
Company to be between $15.8 million and $21.4 million. Based on this estimate,  
the Company will issue between 1,584,009 and 2,143,071 shares of Common Stock.  
The Company is selling between 705,039 and 953,877 shares to depositors and the 
public, and is issuing between 847,878 and 1,147,128 shares to the Mutual       
Company. The Company may increase the shares issued in the Reorganization to up 
to 2,464,532 shares and increase the shares sold in the Offering to up to       
1,096,958 shares, subject to regulatory approvals. As part of the               
Reorganization, 2.0% of the shares issued in the Reorganization (36,579 shares  
at the mid-point of the estimated valuation range) along with $100,000 in cash, 
are being issued to a Charitable Foundation. Consequently, following completion 
of the Reorganization and the Offering, the Mutual Company will own 53.5% of the
outstanding Common Stock, stockholders who purchase Common Stock in the Offering
will own 44.5% of the outstanding Common Stock and the Charitable Foundation    
will own 2.0% of the Common Stock. Based on these estimates, the Company is     
making the following offering of shares of Common Stock:                        

                                                                [Download Table]

                                                                        Adjusted  
                                   Minimum      Midpoint    Maximum      Maximum  
                                -----------  -----------  -----------  -----------
                                                                                  

o Price per share ............. $     10.00  $     10.00  $     10.00  $     10.00
o Number of shares ............     705,039      829,458      953,877    1,096,958
o Reorganization expenses...... $   560,000  $   560,000  $   560,000  $   560,000
o Net proceeds ................ $ 6,493,090  $ 7,734,580  $ 8,978,770  $10,409,580
o Net proceeds per share....... $      9.21  $      9.32  $      9.41  $      9.49


Please refer to Risk Factors beginning on page 13 of this Prospectus. 

These securities are not deposits or accounts, are not insured or     
guaranteed by the Federal Deposit Insurance Corporation (the "FDIC") or any     
other government agency, and are subject to investment risk, including loss of  
principal.                                                                      

  Neither the Securities and Exchange Commission (the "SEC"), the New York
State Banking Department (the "Department"), the FDIC, nor any state securities 
regulator has approved or disapproved these securities or determined if this    
Prospectus is accurate or complete. Any representation to the contrary is a     
criminal offense.                                                               

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    Friedman, Billings, Ramsey & Co., Inc. will use its best efforts to assist
the Company in selling at least the minimum number of shares but does not       
guarantee that this number will be sold. All funds received from subscribers    
will be held in an interest-bearing savings account at the Bank until the       
completion or termination of the Reorganization. The Company has applied for    
approval to list the Common Stock on the Nasdaq SmallCap Market under the symbol
"GRNB."                                                                         

For information on how to subscribe, call the Stock Center at (518)   
943-7515.                                                                       

FRIEDMAN, BILLINGS, RAMSEY & CO., INC.

Prospectus dated November 12, 1998

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 TABLE OF CONTENTS

                                                        [Enlarge/Download Table]

                                                                                   Page
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QUESTIONS AND ANSWERS ABOUT THE OFFERING..............................................1
SUMMARY AND OVERVIEW..................................................................4
SELECTED FINANCIAL INFORMATION.......................................................11
RISK FACTORS ........................................................................13
RECENT DEVELOPMENTS..................................................................19
GREENE COUNTY BANCORP, INC...........................................................22
GREENE COUNTY SAVINGS BANK...........................................................22
MARKET AREA..........................................................................23
REGULATORY CAPITAL COMPLIANCE........................................................23
USE OF PROCEEDS......................................................................24
DIVIDEND POLICY......................................................................25
MARKET FOR COMMON STOCK..............................................................25
CAPITALIZATION.......................................................................26
PRO FORMA DATA.......................................................................27
COMPARISON OF VALUATION AND PRO FORMA INFORMATION WITH AND WITHOUT                     
     FOUNDATION .....................................................................30
PARTICIPATION BY MANAGEMENT..........................................................31
THE REORGANIZATION AND OFFERING......................................................31
GREENE COUNTY SAVINGS BANK STATEMENTS OF INCOME......................................48
MANAGEMENT'S DISCUSSION  AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS               
      OF OPERATIONS .................................................................49
BUSINESS OF GREENE COUNTY BANCORP, INC...............................................60
BUSINESS OF THE BANK.................................................................61
FEDERAL AND STATE TAXATION...........................................................79
REGULATION ..........................................................................81
MANAGEMENT OF GREENE COUNTY BANCORP, INC.............................................90
MANAGEMENT OF THE BANK...............................................................91
RESTRICTIONS ON ACQUISITION OF THE COMPANY...........................................99
DESCRIPTION OF CAPITAL STOCK OF THE COMPANY.........................................101
TRANSFER AGENT AND REGISTRAR........................................................101
LEGAL AND TAX MATTERS...............................................................102
EXPERTS.............................................................................102
ADDITIONAL INFORMATION..............................................................102
FINANCIAL STATEMENTS................................................................F-1
GLOSSARY............................................................................G-1


   This document contains forward-looking statements which involve risks and
uncertainties. The Company's actual results may differ significantly from the   
results discussed in the forward-looking statements. Factors that might cause   
such a difference include, but are not limited to, those discussed in "Risk     
Factors" beginning on page 13 of this Prospectus.                               

Please see the Glossary beginning on page G-1 for the meaning of capitalized    
terms that are used in this Prospectus.                                         

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QUESTIONS AND ANSWERS ABOUT THE OFFERING

Q:   What is the Mutual Company?                                                

A:   Greene County Bancorp, MHC (the "Mutual Company") is a New York-chartered  
    mutual corporation that is being established in connection with the mutual
holding company reorganization (the "Reorganization") of Greene County
   Savings Bank (the "Bank"). The Mutual Company will be chartered under the
   laws of the State of New York and will be regulated by the New York State
 Banking Department (the "Department") and the Board of Governors of the
  Federal Reserve System (the "Federal Reserve Board"). The Mutual Company
  will own 53.5% of the outstanding Common Stock of Greene County Bancorp,
  Inc. (the "Company"), or 997,503 shares at the midpoint of the valuation
    range established by the independent appraisal. The remaining 46.5% of the
  Common Stock of the Company will be owned by persons who purchase Common
    Stock in the Offering, and The Bank of Greene County Charitable Foundation
(the "Charitable Foundation").                                        

Q:   Who will be the minority stockholders of the Company?                      

A:   All persons who purchase Common Stock in the Offering, including the       
employee stock ownership plan ("ESOP") of the Bank and the Charitable 
     Foundation, will be the minority stockholders (the "Minority Stockholders")
    of the Bank, and will own 46.5% of its Common Stock upon completion of the
     Offering. The 46.5% of the Common Stock owned by purchasers in the Offering
 and the Charitable Foundation is referred to as the "Minority Ownership
 Interest." The Mutual Company will own 53.5% of the Common Stock of the
 Company, and will remain its majority stockholder as long as the Mutual
Company remains in existence.                                         

Q:   What is the purpose of the Reorganization and the Offering?                

A:   The primary purpose of the Reorganization and the Offering is to raise     
    additional equity capital to support the growth and expansion of the Bank.
  The increased capital also will be used to expand the Bank's lending and
     investment activities. The Reorganization will create a holding company and
   a stock charter, which is the corporate form used by all commercial banks
and an increasing number of savings institutions. The holding company 
structure will expand the investment and operating authority currently
   available to the Bank. The Offering also will provide depositors with the
opportunity to become stockholders of the Company. The Bank also is   
   establishing the Charitable Foundation that will be dedicated exclusively
     to supporting charitable causes and community development activities in its
market area.                                                          

Q:   Why is the Bank conducting a minority stock offering instead of selling all
of its stock in the Offering?                                         

A:   At the present time, the Bank does not need all of the capital that would  
be raised in a "standard" or "full" stock conversion, where all of a  
converting institution's common stock is offered for sale. A savings  
  institution that converts to stock form using the mutual holding company
   structure sells only a minority of its shares to the public. By doing so,
    the converting institution raises less than half the capital that would be
raised in a full conversion. However, with the mutual holding company 
structure, the Company will have the flexibility to raise additional  
capital in the future by selling the unsold shares held by the Mutual 
 Company. Moreover, the Bank's Board of Trustees intends to maintain the
  independence and community focus of the Bank. Because the Mutual Company
   will control a majority of the Company's Common Stock, the Reorganization
will permit the Bank to achieve the benefits of being a stock company 
without the loss of control by the Bank's Board of Trustees.          

Q:   How do I order the Common Stock?                                           

A:   You must complete and return the stock order form and certification form   
(together, the "Order Form") to the Bank, together with your payment, 
 before 12:00 noon New York time on December 17, 1998. Please review the
 Order Form and Stock Order Form Instructions when filling out the Order
Form and before sending any payment to the Bank.                      

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Q:   How much stock may I order?                                                

A:   The minimum order is 25 shares (or $250). The maximum order for any        
  individual person or persons ordering through a single account is 10,000
shares (or $100,000). In certain instances, your order may be grouped 
    together with orders by other persons who are associated with you (such as
 your spouse, children or relatives living in your home or corporations,
    partnerships and trusts of which you are an officer, director or trustee),
   or with whom you are acting in concert, and, in that event, the aggregate
order may not exceed 20,000 shares (or $200,000). The maximum purchase
     limitation may be decreased or increased without notifying you. However, if
     the maximum purchase limitation is increased, and you previously subscribed
    for the maximum number of shares, you will be notified of the increase, as
well as the opportunity to subscribe for additional shares.           

Q:   Who has subscription rights and what are the subscription priorities?      

A:   Subscription orders to purchase Common Stock will be filled on a priority  
basis as follows:                                                     

   o    First, to persons who had one or more deposit accounts with the Bank
aggregating at least $100 on June 30, 1997.                 

    o    Second, up to 10% of the Minority Ownership Interest may be purchased
     by the Bank's tax-qualified employee benefit plans, including the
       Bank's ESOP (which is expected to purchase up to 8% of the Minority
        Ownership Interest). In addition, participants in the Bank's Savings
          and Profit Sharing Plan will be given the opportunity to subscribe for
shares of Common Stock through that plan.                   

   o    Third, to persons who had one or more deposit accounts with the Bank
aggregating at least $100 on September 30, 1998.            

o    Fourth, to employees, officers and trustees of the Bank.         

Q:   What will happen to my subscription funds if the Offering is not completed?

A:   If the minimum number of shares to be sold in the Offering (705,039 shares)
    is not sold by December 17, 1998, the Bank may: (i) terminate the Offering
  and promptly refund all payments for Common Stock, including interest on
such payments at the Bank's passbook rate of 3.25%; or (ii) extend the
     Offering for an additional 45 days (to January 29, 1999) or, if approved by
   the Superintendent, for an additional period after such 45-day extension.
    The Bank is not required to give purchasers notice of any extension unless
the expiration date is later than January 29, 1999, in which event    
purchasers will be "resolicited" (i.e., given the right to increase,  
decrease, confirm or rescind their orders). - Purchasers who fail to  
respond to the resolicitation within 20 days will have their orders   
rescinded and their subscription funds returned promptly.             

Q:   What happens if there are not enough shares to fill all orders?  

     A:   If the Offering is oversubscribed, shares will be allocated based upon
        a deposit formula set forth in the Plan of Reorganization. There can
          be no assurance that a subscriber in the Offering will have his or her
   subscription filled. If insufficient shares of Common Stock are
        available in the first category, the Company will allocate shares in
         such a manner that will allow Eligible Account Holders to purchase at
          least the lesser of 100 shares or the amount subscribed for. Likewise,
     if insufficient shares of Common Stock are available in the third
         category, the Company will allocate shares in such a manner that will
        allow Supplemental Eligible Account Holders to purchase at least the
          lesser of 100 shares or the amount of stock subscribed for. All orders
       must be received by 12:00 noon, New York time on December 17, 1998.

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Q:   Will shares be offered to anyone other than persons with subscription      
rights?                                                               

A:   If persons with subscription rights do not subscribe for all of the shares 
 offered, the remaining shares will be offered to certain members of the
general public in a community offering, with a preference for natural 
persons residing in the Bank's community of Greene County, New York.  

Q:   May I transfer my subscription rights?                                     

A:   No. Transferring subscription rights or entering into an agreement or      
understanding for the transfer of subscription rights is prohibited.  

Q:   What particular factors should I consider when deciding whether or not to  
buy Common Stock?                                                     

A:   Before you decide to purchase Common Stock, you should read this entire    
  Prospectus, including the Risk Factors section on pages 13 to 18 of this
Prospectus.                                                           

Q:   Who can help answer any other questions I may have about the Offering?     

A:   In order to make an informed investment decision, you should read this     
 entire Prospectus. This question and answer section highlights selected
     information and may not contain all of the information that is important to
you. In addition, you may contact:                                    

Stock Center
 430 Main Street
 Catskill, New York 12414-1303
P.O. Box 546
 Catskill, New York 12414-0546
(518) 943-7515

Selling or assigning your subscription rights is illegal. All persons 
exercising their subscription rights will be required to certify that they are  
purchasing shares solely for their own account and that they have no agreement  
or understanding regarding the sale or transfer of such shares. The Bank intends
to pursue any and all legal and equitable remedies in the event it becomes aware
of the transfer of subscription rights. Orders known to involve the transfer of 
subscription rights will not be honored. In addition, persons who violate the   
purchase limitations may be subject to sanctions and penalties imposed by the   
New York Banking Department and/or the Federal Deposit Insurance Corporation.   

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SUMMARY AND OVERVIEW

    This summary highlights selected information from this Prospectus and does
not contain all the information that you need to know before making an informed 
investment decision. To understand the Offering fully, you should read this     
entire Prospectus carefully, including the financial statements and the notes to
the financial statements of the Bank. Certain financial information contained in
this Prospectus has been derived from the audited financial statements of the   
Bank.                                                                           

     You should note as you read this Prospectus that at times capitalized terms
are used. These capitalized terms are generally defined in the glossary that is 
at the end of this Prospectus. Defined terms are used to help you differentiate 
between the various components of the transaction, to simplify the discussion   
and to avoid unnecessary repetition by not having to define or describe a term  
each time it is used. For example, to avoid confusion, all of the steps that are
part of the transactions described in this Prospectus are referred to as the    
"Reorganization," and the offer and sale of 44.5% of the Company's Common Stock 
is referred to as the "Offering". References to the "Bank" refer to Greene      
County Savings Bank, which is changing its name to "The Bank of Greene County"  
concurrently with the Reorganization and the Offering. References to the        
"Company" refer to Greene County Bancorp, Inc., and references to the "Mutual   
Company" refer to Greene County Bancorp, MHC. To further assist you in reading  
this Prospectus, in addition to including a glossary, each term defined in the  
glossary is also defined the first time that it is used in this Prospectus.     

The Company                                                                     

 Greene County Bancorp, Inc.
 425 Main Street
 Catskill, New York 12414-1317
(518) 943-3700

  The Company is a Delaware corporation that was formed recently to become
the holding company of the Bank. Accordingly, the Company has no results of     
operations. After the Reorganization, the Company will own all of the Bank's    
common stock. Purchasers in the Offering will own 44.5% of the Company's Common 
Stock, the Charitable Foundation will own 2.0% of the shares of the Company's   
Common Stock, and the Mutual Company will own 53.5% of the shares of the        
Company's Common Stock. Although these percentages may change in the future, the
Mutual Company must always own a majority of the Company's Common Stock.        

The Bank                                                                        

Greene County Savings Bank
 425 Main Street
 Catskill, New York 12414-1317
(518) 943-3700

The Bank was organized in 1889 as The Building and Loan Association of
Catskill, a New York-chartered savings and loan association. In 1974, the Bank  
converted to a New York mutual savings bank under the name Greene County Savings
Bank. In conjunction with the Reorganization and the Offering, the Bank is      
changing its name to The Bank of Greene County. At June 30, 1998, the Bank had  
total assets of $140.3 million, total deposits of $122.3 million, and retained  
earnings of $15.7 million. The Bank is a community- and customer-oriented bank  
that operates from its main office and three branch locations in Catskill, West 
Coxsackie, Cairo and Greenville, New York. Historically, the Bank's principal   
business has been making home mortgage loans and offering various savings and   
other deposit accounts to the public. At June 30, 1998, the Bank's loan         
portfolio consisted of $64.7 million, or 79.7%, of loans secured by one- to     
four-family residential mortgage loans, $9.4 million, or 11.6%, of consumer     
loans, $4.5 million, or 5.6%, of commercial real estate loans and $1.3 million, 
or 1.7%, of commercial business loans. The Bank also invests in investment      
securities, mortgage-backed securities and asset-backed securities. At June 30, 
1998, investment securities totaled $36.3 million, mortgage-backed securities   
totaled $5.2 million, and asset-backed securities totaled $6.3 million. At June 
30, 1998, such securities comprised 34.1% of total assets.                      

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The following are highlights of the Bank's operating strategy:        

    o    Community Banking. Since its establishment in 1889, the Bank has been
         committed to meeting the financial needs of the community in which it
         operates and to providing quality service for its customers. This has
     enabled the Bank to maintain a high level of core deposits, which
        comprised 54.5% of total deposits at June 30, 1998. In addition, the
        Bank intends to use the mutual holding company structure to maintain
the Bank as an independent community bank.                  

  o    Emphasis on Residential Real Estate Lending. Historically, the Bank
    has emphasized one- to four-family residential lending, which is
        generally considered to involve less risk than consumer and business
       lending. At June 30, 1998, one- to four-family residential mortgage
     loans comprised 79.7% of the loan portfolio, substantially all of
which were secured by real estate located in Greene County. 

    o    Maintaining High Levels of Liquid Investments. To better position the
Bank to reinvest assets profitably in a rising interest rate
        environment, the Bank invests a significant portion of its assets in
         short-term U.S. Government and agency securities and other short-term
        interest-earning assets. At June 30, 1998, 26.8% of the Bank's total
          assets were U.S. Government and agency securities, municipal bonds due
       in five years or less, federal funds sold, and cash due from banks.

     o    Maintaining Asset Quality. The Bank tries to maintain asset quality by
         having conservative underwriting and investing standards. At June 30,
      1998, the Bank's ratio of nonperforming assets to total assets was
          0.72% (compared to the median ratio of the Bank's peer group of 0.34%)
  and its ratio of non-performing loans to total loans was 1.09%
     (compared to the median ratio of the Bank's peer group of 0.40%).

The Reorganization                                                              

 The Reorganization involves a number of steps, including the following:

     o    The Bank will establish the Company and the Mutual Company, neither of
which will have any assets prior to the completion of the   
Reorganization.                                             

o    The Bank will convert from the mutual form of organization to the
          capital stock form of organization and issue 100% of its capital stock
to the Company.                                             

o    The Company will issue between 1,584,009 and 2,143,071 shares of 
  Common Stock in the Reorganization (or 2,464,532 shares at the
    adjusted maximum). 53.5% of these shares (or between 847,878 and
          1,147,128 shares, or 1,319,198 shares at the adjusted maximum) will be
       issued to the Mutual Company; 44.5% (or between 705,039 and 953,877
        shares, or 1,096,958 shares at the adjusted maximum) will be sold to
          depositors and the public; and 2.0% of these shares (or between 31,092
        and 42,066 shares, or 48,376 shares at the adjusted maximum) will be
issued to a newly formed Charitable Foundation.             

     o    Interests that depositors had in the Bank will become interests in the
         Mutual Company, which will own 53.5% of the shares of Common Stock of
the Company and indirectly of the Bank.                     

The Mutual Holding Company Structure                                            

     The mutual holding company structure differs in significant respects from a
stock holding company structure that is used in a "standard" mutual-to-stock    
conversion. A savings bank that converts to the stock form using the mutual     
holding company structure sells only a minority of its shares and raises less   
proceeds than would be raised in a standard mutual- to-stock conversion in which
100% of the shares are sold to depositors and the public. If additional capital 
is needed in the future, the unsold shares that are issued to the Mutual Company
may be offered for sale by the Company. See "Regulation--Holding Company        
Regulation--Mutual Holding Company Regulation." In addition, because the Mutual 
Company controls a majority of the Company's Common Stock, the structure will   
permit the Bank to achieve                                                      

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the benefits of a stock company without a loss of control that often follows a  
complete conversion from mutual to stock form.                                  

   In making business decisions, the Mutual Company's Board of Trustees will
consider a variety of constituencies, including the depositors and employees of 
the Bank, and the community in which the Bank operates. As the majority         
stockholder of the Company, the Mutual Company is also interested in the        
continued success and profitability of the Bank and the Company. Consequently,  
the Mutual Company will act in a manner that furthers the general interest of   
all of its constituencies, including the interest of the stockholders of the    
Company. The Mutual Company believes that the interests of the stockholders of  
the Company, and those of the Mutual Company's other constituencies, are in many
circumstances the same, such as the increased profitability of the Company and  
the Bank and continued service to the community in which the Bank operates.     

The Stock Offering                                                              

    The Company is offering for sale between 705,039 and 953,877 shares of its
Common Stock, for a price per share of $10.00. The Offering may be increased to 
up to 1,096,958 shares. If the minimum number of shares to be sold in the       
Offering (705,039 shares) is not sold by December 17, 1998, the Bank may: (i)   
terminate the Offering and promptly refund all payments for Common Stock,       
including interest on such payments at the Bank's passbook rate of 3.25%; or    
(ii) extend the Offering for an additional 45 days (to January 29, 1999) or, if 
approved by the Superintendent, for an additional period after such 45-day      
extension. The Bank is not required to give purchasers notice of any extension  
unless the expiration date is later than January 29, 1999, in which event       
purchasers will be "resolicited" (i.e., given the right to increase, decrease,  
confirm or rescind their orders). Purchasers who fail to respond to the         
resolicitation within 20 days will have their orders rescinded and their        
subscription funds returned promptly.                                           

Stock Purchase Priorities                                                       

The Common Stock is being offered for sale in the following order of  
priority in a Subscription Offering:                                            

(i)  the Bank's Eligible Account Holders (holders of deposit accounts 
totaling $100 or more as of June 30, 1997);                 

    (ii) the Bank's tax-qualified employee benefit plans, including the Bank's
          ESOP (which is expected to purchase up to 8% of the Minority Ownership
Interest);                                                  

    (iii) the Bank's Supplemental Eligible Account Holders (holders of deposit
 accounts totaling $100 or more as of September 30, 1998); and

(iv) employees, officers and trustees of the Bank.                    

 Any shares not subscribed for will be offered to certain members of the
general public in a community offering, with preference given first to natural  
persons residing in Greene County, New York. The Company has engaged Friedman,  
Billings, Ramsey & Co., Inc. to assist it on a best efforts basis in selling the
Common Stock in the Offering. See pages 33 to 38.                               

Stock Pricing and Number of Shares to be Issued                                 

  The Company's Board of Directors has set the purchase price per share of
Common Stock at $10.00, the price most commonly used in stock offerings         
involving mutual-to-stock conversions of mutual savings institutions. The number
of shares of Common Stock issued in the Offering is based on the independent    
valuation prepared by FinPro, Inc. ("FinPro"), an appraisal firm experienced in 
appraisals of savings institutions. The independent valuation states that as of 
October 7, 1998, the estimated pro forma market value of the Company ranged from
a minimum of $15.8 million to a maximum of $21.4 million, with a midpoint of    
$18.6 million. Based on this valuation and the $10.00 per share price, the      
number of shares of Common Stock that the Company will issue will range from    
1,584,009 to 2,143,071 shares. The Company and the Bank have decided to offer   
for sale 44.5% of such shares, or between 705,039 and 953,877 shares, to        
depositors and the public. In addition, the Company will issue between 31,092   
and 42,066 shares                                                               

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(together with $100,000 in cash) to the Charitable Foundation. The Board of     
Trustees determined to sell 44.5% of the Common Stock to depositors and the     
public in order to raise the maximum amount of proceeds while permitting the    
Company to issue additional shares to the Charitable Foundation and additional  
shares of Common Stock in the future pursuant to a stock award plan and stock   
option plan that the Company intends to adopt after the Reorganization and the  
Offering. The 53.5% of the shares of the Common Stock that are not sold in the  
Offering or issued to the Charitable Foundation will be issued to the Mutual    
Company. The establishment of the Charitable Foundation had the effect of       
reducing the valuation of the Company. See "Comparison of Valuation and Pro     
Forma Information without Foundation."                                          

    Changes in market and financial conditions and demand for the Common Stock
may cause the estimated valuation range to increase by up to 15%, to up to $24.6
million. If this occurs, the maximum number of shares that can be sold to       
depositors and the public can increase to up to 1,096,958 shares, and the number
of shares to be issued to the Charitable Foundation can increase to 48,376. The 
Company will not notify subscribers if the maximum number of shares to be sold  
increases by 15% or less. The Company, however, will notify subscribers if the  
estimated valuation range and the maximum number of shares to be sold is        
increased by more than 15% or if the minimum of the estimated valuation range is
decreased. The independent valuation is not a recommendation as to the          
advisability of purchasing shares, and you should not buy Common Stock based on 
the independent valuation.                                                      

     Payment for shares may be made by (i) cash (except by mail), check or money
order, or (ii) authorization of withdrawal from a deposit account maintained    
with the Bank. Payments made by check or money order will be placed in a        
segregated escrow account and will be paid interest at the Bank's passbook rate 
from the date payment is received until the Offering is completed or terminated.

Deadline of the Offering                                                        

The offering to depositors will end at 12:00 noon, New York time, on  
December 17, 1998. The community offering may end on or after December 17, 1998,
but in any event, no later than January 29, 1999, without regulatory approvals. 
If the Reorganization and Offering are not completed by January 29, 1999, all   
subscribers will be notified and will be given the opportunity to cancel or     
modify their orders.                                                            

Benefits to Management from the Offering                                        

The Company intends to implement for the benefit of the employees,    
directors/trustees and officers of the Company and the Bank, the ESOP, a stock  
option plan ("Stock Option Plan") and a stock award plan ("Stock Award Plan").  
These benefit plans would result in employees, officers and directors being     
eligible to receive in the aggregate up to 190,528 shares of Common Stock (at   
the midpoint of the Offering Range). Assuming that the Stock Option Plan and    
Stock Award Plan were funded from shares purchased in the open market,          
employees, directors/trustees and officers would own 22% of the Minority        
Ownership Interest, inclusive of ESOP shares but exclusive of other shares such 
persons may have acquired individually.                                         

     ESOP. Full-time employees of the Bank will participate in an ESOP, which is
a form of retirement plan, that will purchase shares of Common Stock. The ESOP  
intends to purchase up to 8% of the Minority Ownership Interest. The estimated  
cost to fund the ESOP is $588,900 at the minimum of the Offering Range and      
$796,750 at the maximum of the Offering Range. A portion of the net proceeds of 
the Offering will be used to fund the purchase of shares for the ESOP. For      
further information, see "Executive Compensation--Employee Stock Ownership Plan 
and Trust."                                                                     

Stock Option Plan. The Stock Option Plan will provide for the grant of
options to purchase Common Stock equal to 10% of the Minority Ownership         
Interest. The exercise price of each option will be equal to the closing price  
of the Common Stock on the date the option is granted. No options will be       
granted until after stockholders approve the Stock Option Plan. For further     
information, see "Executive Compensation--Stock Option Plan." The Board of      
Trustees has not yet determined how many options each individual officer,       
director/trustee or employee will receive.                                      

     Stock Award Plan. The Stock Award Plan will provide for the award of shares
of Common Stock equal to up to 3% of the Minority Ownership Interest to         
officers, employees and directors/trustees of the Bank, if the Stock Award Plan 
is implemented within one year after the completion of the Offering. If the     
Stock Award Plan is                                                             

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implemented later than one year after the completion of the Offering, up to 5%  
of the Minority Ownership Interest may be granted, subject to stockholder       
approval. Shares of Common Stock awarded under the Stock Award Plan will be at  
no cost to the recipient, and in the aggregate will have a value of $294,452 at 
the minimum of the Offering Range and $398,377 at the maximum of the Offering   
Range, assuming a value of $10.00 per share and assuming a 4% plan. For further 
information, see "Executive Compensation--Stock Award Plan." The Board of       
Trustees has not yet determined how many shares of Common Stock will be awarded 
to officers, directors or employees of the Bank.                                

The Stock Award Plan and Stock Option Plan may not be adopted until at
least six months after the completion of the Reorganization, and are subject to 
shareholder approval. See pages 97 to 99.                                       

   The following table presents the dollar value of the shares to be granted
pursuant to the proposed stock benefit plans and the percentage of the Company's
outstanding Common Stock that will be represented by these shares.              

                                                                [Download Table]


                                                  Percentage of  
                             Value of             Outstanding    
                           Shares Granted(1)     Common Stock (3)
                           -----------------     ----------------
                                                                 
Benefit Plan:                                                    
ESOP ............ .......    $   692,830               3.72%     
Stock Option Plan .......            --  (2)           4.65      
Stock Award Plan ........        346,410               1.86      
                             -----------              -----      
                             $ 1,039,240              10.23%     
                             -----------              -----      
                             -----------              -----      

-------------------------                                                       
(1)  Assumes shares are granted at $10.00 per share and that shares are sold in 
the Offering at the midpoint of the Offering Range.                   

(2)  Recipients of stock options realize value only in the event of an increase 
     in the price of the Common Stock of the Company following the date of grant
    of the stock options. Options to purchase 86,604 shares at the midpoint of
   the Offering Range may be granted if the Stock Option Plan is approved by
stockholders.                                                         

(3)  Assumes shares for the Stock Award Plan and Stock Option Plan are funded by
open-market repurchases, and not from authorized-but-unissued shares. 

     In addition, the Bank intends to enter into an employment agreement with J.
Bruce Whittaker, its President and Chief Executive Officer. The agreement       
provides that if Mr. Whittaker resigns from the Bank upon certain events,       
including a change in control of the Bank or the Company, then Mr. Whittaker    
will be entitled to severance pay equal to three times the highest base salary  
and highest bonus paid during the prior three years (or $375,000, based upon Mr.
Whittaker's current level of compensation). See "Executive Compensation -       
Employment Agreement."                                                          

The Charitable Foundation                                                       

To further its commitment to the local community, the Bank intends to 
establish the Charitable Foundation as part of the Reorganization. The Company  
will contribute to the Charitable Foundation 2.0% of the shares of Common Stock 
issued in the Reorganization plus $100,000 in cash. The Charitable Foundation   
will be dedicated exclusively to supporting charitable causes and community     
development activities in the Bank's market area. Due to the issuance of        
additional shares of Common Stock to the Charitable Foundation, the ownership   
and voting interests of all stockholders of the Company will be diluted by 2.0%.
The Company will incur an expense equal to the full amount of the contribution  
to the Charitable Foundation, offset in part by a corresponding tax benefit,    
during the quarter in which the contribution is made. Such expense will reduce  
the Company's earnings. See "Risk Factors--The Expense and Dilutive Effect of   
the Contribution of Shares and Cash to the Charitable Foundation," "Pro Forma   
Data," and "The Reorganization and Offering--Establishment of the Charitable    
Foundation." As a condition to issuing their non-objection to the               
Reorganization, the FDIC and the Department have required the Charitable        
Foundation to commit that all shares of Common Stock held by the Charitable     
Foundation will be voted in the same ratio as all other shares of the Company's 
Common Stock (other than shares held by the Mutual Company) on all proposals    
considered by stockholders of the Company, subject to certain waivers of this   
commitment.                                                                     

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Use of the Proceeds Raised from the Sale of Common Stock                        

The Company will use the proceeds from the Offering as follows. The   
percentages used are estimates:                                                 

o    50% will be used to buy all the capital stock of the Bank.       
  o    8% will be loaned to the ESOP to fund its purchase of Common Stock.
    o    42% will be retained as a possible source of funds for the payment of
      dividends to stockholders, the repurchase of Common Stock, and for
other general corporate purposes.                           

The proceeds to be received by the Bank will be available for general 
corporate purposes, the opening of new branches, renovation of existing         
facilities, branch or whole bank acquisitions, new loan originations, and the   
purchase of investment and mortgage-backed securities.                          

See pages 24 and 25 for a fuller description of the use of proceeds.  

Procedure for Purchasing Common Stock                                           

To ensure proper identification of stock purchase priorities, Eligible
Account Holders and Supplemental Eligible Account Holders must list all deposit 
accounts on their Order Form, giving all names on each deposit account and the  
account numbers at the applicable date. The failure to provide accurate and     
complete account information on the Order Form, including adding individuals    
with a lower, or no, stock purchase priority as subscribers on an Order Form,   
may eliminate your ability to purchase stock.                                   

  Full payment by check, cash (except by mail), money order, bank draft or
withdrawal authorization (payment by wire transfer will not be accepted) must   
accompany an original Order Form. The Company is not obligated to accept an     
order submitted on photocopied or telecopied Order Forms. The Company will not  
accept Order Forms if the certification appearing on the reverse side of the    
Order Form is not executed. The Company is not required to deliver a Prospectus 
and Order Form by any means other than the U.S. Postal Service.                 

  See pages 38 to 40 for procedures for purchasing shares of Common Stock.

Dividends                                                                       

  The Company does not initially intend to pay a dividend, although it may
consider the payment of dividends in the future. Future decisions as to the     
declaration of dividends by the Company will depend upon a number of factors    
including investment opportunities available to the Company or the Bank and the 
Company's financial condition and results of operations. See page 25.           

Market for the Common Stock                                                     

The Company has applied to have the Common Stock quoted on the Nasdaq 
SmallCap Market under the symbol "GRNB." Friedman, Billings, Ramsey & Co., Inc. 
intends to make a market in the Common Stock, and the Company expects that      
additional market makers will be identified. See "Market for Common Stock."     

Important Risks in Purchasing and Owning the Company's Common Stock             

    Before deciding to purchase Common Stock in the Offering, please carefully
read the Risk Factors section on pages 13 to 18 of this Prospectus, in addition 
to the other sections of this Prospectus.                                       

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The shares of Common Stock offered hereby:                            

o    Are not deposit accounts and are subject to investment risk;     

 o    Are not insured or guaranteed by the FDIC, or any other government
agency; and                                                 

  o    Are not guaranteed by the Company, the Mutual Company, or the Bank.

     The Common Stock is subject to investment risk, including the possible loss
of principal invested.                                                          

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SELECTED FINANCIAL INFORMATION

  The selected data presented below under the captions "Selected Financial
Condition Data" and "Selected Operations Data" for, and as of the end of, each  
of the years in the two-year period ended June 30, 1998, are derived from the   
audited financial statements of the Bank. The financial statements as of June   
30, 1998 and 1997 and for each of the years in the two-year period ended June   
30, 1998 are included elsewhere in this Prospectus.                             

                                                                [Download Table]

                                                                June 30,       
                                                         ----------------------
                                                           1998          1997  
                                                         --------      --------
                                                             (In Thousands)    
                                                                               
Selected Financial Condition Data:                                             

Total assets ......................................      $140,253      $132,506
Loans receivable, net .............................        80,260        75,648
Mortgage-backed securities (all available for sale)         5,189         5,221
Investment securities (all available for sale) ....        36,265        37,581
Asset-backed securities (all available for sale) ..         6,324           784
Deposits ..........................................       122,324       115,855
Total borrowings ..................................          --            --  
Retained earnings, substantially restricted .......        15,730        14,406


                                                                [Download Table]


                                                                  Years Ended  
                                                                   June 30,    
                                                             ------------------
                                                              1998        1997 
                                                             ------      ------
                                                                (In Thousands) 
                                                                               

Selected Operations Data:                                                      

Total interest income ............................           $9,503      $9,297
Total interest expense ...........................            4,967       4,780
                                                             ------      ------
     Net interest income .........................            4,536       4,517
Provision for loan losses ........................              120         125
                                                             ------      ------
                                                             ------      ------
Net interest income after provision for                                        
     loan losses .................................            4,416       4,392
Total non-interest income ........................              436         520
Total non-interest expense .......................            3,149       2,773
                                                             ------      ------
Income before taxes and extraordinary item                    1,703       2,139
Income tax provision .............................              553         692
                                                             ------      ------
Net income .......................................           $1,150      $1,447
                                                             ------      ------
                                                             ------      ------


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                                                        [Enlarge/Download Table]


                                                                                       At or for the Years Ended
                                                                                               June 30,         
                                                                                          1998         1997     
                                                                                         ------       ------    
                                                                                                                

Selected Financial Ratios and Other Data:                                                                       
Performance Ratios:                                                                                             
     Return on average assets (ratio of net income to average total assets) .........      0.84%        1.09%   
     Return on average retained earnings (ratio of net income to average                                        
         retained earnings) .........................................................      7.63        10.59    
     Ratio of operating expense to average total assets .............................      2.31         2.08    
     Ratio of average interest-earning assets to average interest-bearing liabilities    109.58       109.16    
     Net interest rate spread (1) ...................................................      3.15         3.26    
     Net interest margin (2) ........................................................      3.52         3.61    
     Efficiency ratio (3) ...........................................................     64.90        56.45    

Asset Quality Ratios:                                                                                           
     Non-performing assets to total assets at end of period .........................      0.72         0.61    
     Non-performing loans to total loans at end of period ...........................      1.10         0.97    
     Allowance for loan losses to non-performing loans ..............................     82.17        90.04    
     Allowance for loan losses to loans receivable, net .............................      0.91         0.96    

Capital Ratios:                                                                                                 
     Retained earnings to total assets at end of period .............................     11.22        10.87    
     Average retained earnings to average assets ....................................     11.05        10.27    

Other Data:                                                                                                     
     Number of full-service offices .................................................         4            3    

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

(1)  The difference between the weighted average yield on average               
interest-earning assets and the weighted average cost of average      
interest-bearing liabilities.                                         
(2)  Net interest income as a percentage of average interest-earning assets.    
(3)  The ratio of non-interest expense dividend by the sum of net interest      
income and non-interest income.                                       

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RISK FACTORS

In addition to the other information in this Prospectus, you should   
consider carefully the following risk factors in evaluating an investment in the
Common Stock.                                                                   

Recent Market Volatility and Risk of Investment Loss                            

 In recent months, stock markets in both the United States and worldwide
have been volatile. The securities of individual companies have, in many        
instances, experienced significant fluctuations in price for reasons unrelated  
to the specific company's financial condition, results of operations or business
prospects. In particular, the value of securities of financial institutions has 
been adversely affected by weakening economics worldwide and exposure to highly 
leveraged hedge funds, even though local community-based financial institutions 
may have no credit exposure outside the United States or loans to hedge funds.  
Therefore, an investor should understand that, in the short-term, the value of  
an investment in the Common Stock is subject to fluctuation, including loss, due
to volatility in stock markets generally.                                       

Reduced Return on Equity after the Reorganization and Potential Negative Effect 
on Trading Price of Common Stock                                                

   Return on equity (net income for a given period divided by average equity
during that period) is a ratio used by many investors to compare the performance
of a particular financial institution to its peers. The Bank's equity as a      
percentage of assets will significantly increase as a result of the net proceeds
received in the Offering. The Bank anticipates that it will take time to        
prudently reinvest the capital raised in the Offering. Consequently, the        
Company's return on equity in the period following the Reorganization is        
expected to be less than the average return on equity for publicly traded       
savings institutions and their holding companies and, during such time, the     
Company's Common Stock may trade at a discount to the market. See "Selected     
Financial Information" for numerical information regarding the Bank's historical
return on equity and "Capitalization" for a discussion of the Company's         
estimated pro forma consolidated capitalization as a result of the              
Reorganization and Offering.                                                    

     In addition, the expenses associated with the ESOP and the Stock Award Plan
(see "Pro Forma Data"), along with other ongoing post-Reorganization expenses,  
are expected to contribute initially to reduced earnings. In the short term, the
Bank will have difficulty in improving its interest rate spread and thus the    
return on equity to stockholders. Consequently, for the foreseeable future,     
investors should not expect a return on equity that will meet or exceed the     
average return on equity for publicly traded financial institutions, and no     
assurances can be given that this goal can be attained.                         

Potential Effects of Changes in Interest Rates and the Current Interest Rate    
Environment                                                                     

    The Bank's financial condition and results of operations are significantly
affected by changes in interest rates. The Bank's results of operations depend  
substantially on its net interest income, which is the difference between the   
interest income earned on interest-earning assets and the interest expense paid 
on interest-bearing liabilities. Based on certain repricing assumptions, the    
Bank's interest-bearing liabilities repricing or maturing within one year       
exceeded its interest-earning assets with similar characteristics by $10.5      
million, or 7.78% of total interest-earning assets at June 30, 1998.            
Accordingly, an increase in interest rates generally would result in a decrease 
in the Bank's average interest rate spread and net interest income. The Bank has
sought to reduce the exposure of its net interest income to increases in market 
interest rates by investing in readily marketable, liquid U.S. government and   
agency securities. See "Management's Discussion and Analysis of Financial       
Condition and Results of Operations--Management of Interest Rate Risk."         

Changes in interest rates also affect the value of the Bank's         
interest-earning assets, and in particular the Bank's investments in securities.
Generally, the value of the Bank's securities investments, including            
mortgage-backed securities and asset-backed securities, fluctuates inversely    
with changes in interest rates. At June 30, 1998, the Bank's                    

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investment securities, mortgage-backed securities and asset- backed securities  
totaled $36.3 million, $5.2 million, and $6.3 million, respectively, all of     
which were classified as available for sale. Unrealized gains and losses on     
securities available for sale are reported as a separate component of equity.   
Decreases in the fair value of securities available for sale, therefore, could  
have an adverse effect on stockholders' equity. See "Business of the            
Bank--Securities Investment Activities."                                        

The Bank is also subject to reinvestment risk relating to changes in  
interest rates that can affect the average life of loans and mortgage-backed    
securities. Decreases in interest rates can result in increased prepayments of  
loans and mortgage-backed securities, as borrowers refinance to reduce borrowing
costs. Under these circumstances, the Bank is subject to reinvestment risk to   
the extent that it is not able to reinvest such prepayments at interest rates   
that are comparable to the rates on the maturing loans or securities.           

The Expense and Dilutive Effect of the Contribution of Shares and Cash to the   
Charitable Foundation                                                           

    The Bank intends to establish the Charitable Foundation in connection with
the Reorganization. The Company will make a contribution to the Charitable      
Foundation in the form of shares of Common Stock equal to 2.0% of shares        
outstanding after the completion of the Offering, or 36,579 shares at the       
midpoint of the Offering Range, and $100,000 in cash. Due to the issuance of    
additional shares of Common Stock to the Charitable Foundation, persons         
purchasing shares in the Offering will have their ownership and voting interests
in the Company diluted by 2.0%. The contribution of Common Stock to the         
Charitable Foundation will be dilutive to the interests of stockholders and the 
aggregate contribution will have an adverse impact on the reported earnings of  
the Company in the fiscal year in which the Charitable Foundation is established
and the contribution is made. If the Charitable Foundation had been established 
and the contribution made at June 30, 1998, and assuming the sale of the Common 
Stock at the midpoint of the estimated valuation range, the Bank would have     
reported net income of $870,000 rather than reporting net income of $1,150,000  
for the year ended June 30, 1998. In addition, the establishment and funding of 
a Charitable Foundation as part of a mutual holding company reorganization and  
stock offering have only recently occurred. There can be no assurance that      
challenges to the Charitable Foundation from regulators or others may not arise,
the resolution of which may result in delay in the consummation of the          
Reorganization and the Offering. See "The Reorganization and                    
Offering--Establishment of the Charitable Foundation."                          

Minority Public Ownership and Provisions that May Discourage Attempts to Acquire
the Company                                                                     

   Voting Control of the Mutual Company. Under New York law, the Bank's Plan
of Reorganization from a Mutual Savings Bank to a Mutual Holding Company and    
Stock Issuance Plan (the "Plan of Reorganization"), and the Company's governing 
corporate instruments, at least 51% of the Company's voting shares must be owned
by the Mutual Company. The Mutual Company will be controlled by its board of    
trustees, who will consist of persons who are members of the board of directors 
of the Company and the Bank. The Mutual Company will elect all members of the   
board of directors of the Company, and as a general matter, will control the    
outcome of all matters presented to the stockholders of the Company for         
resolution by vote, except for matters that require a vote greater than a       
majority. The Mutual Company, acting through its board of trustees, will be able
to control the business and operations of the Company and the Bank and will be  
able to prevent any challenge to the ownership or control of the Company by     
stockholders other than the Mutual Company ("Minority Stockholders").           
Accordingly, a change in control of the Company and the Bank cannot occur unless
the Mutual Company first converts to the stock form of organization. Although   
New York law, applicable regulations and the Plan of Reorganization permit the  
Mutual Company to convert from the mutual to the capital stock form of          
organization, it is not anticipated that a conversion of the Mutual Company will
occur in the foreseeable future and there can be no assurance when, if ever,    
such a conversion would occur.                                                  

Provisions in the Company's and the Bank's Governing Instruments. In  
addition, certain provisions of the Company's Certificate of Incorporation and  
Bylaws, particularly a provision limiting voting rights, as well as certain     
federal and state regulations, assist the Company in maintaining its status as  
an independent publicly owned corporation. These provisions provide for, among  
other things, supermajority voting, staggered boards of directors, noncumulative
voting for directors, advance notice requirements for stockholder nominations to
the Board of Directors, discretion in                                           

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the Board of Directors to consider non-financial aspects of an acquisition of   
the Company, ability of the Board to expand the size of the Board and fill new  
seats resulting from such expansion, limits on the calling of special meetings  
of stockholders, and limits on the ability of Minority Stockholders to vote     
Common Stock in excess of 5% of the issued and outstanding shares (inclusive of 
shares issued to the Mutual Company). The regulations of the New York State     
Banking Department (the "Department") prohibit, except with the prior approval  
of the Superintendent of Banks of the State of New York (the "Superintendent"), 
for a period of one year following the date of the Reorganization, offers to    
acquire or the acquisition of beneficial ownership of more than 5% of the equity
securities of the Bank or the Company. The Bank's Restated Organization         
Certificate also prohibits, for three years, the acquisition, directly or       
indirectly, of the beneficial ownership of more than 10% of the Bank's or the   
Company's equity securities.                                                    

Dividend Waivers by the Mutual Company                                          

It has been the policy of many mutual holding companies to waive the  
receipt of dividends declared by its subsidiary. In connection with its approval
of the Reorganization, however, the Federal Reserve Board is expected to impose 
certain conditions on the waiver by the Mutual Company of dividends paid on the 
Common Stock. In particular, it is expected that the Mutual Company will be     
required to obtain prior Federal Reserve Board approval before it may waive any 
dividends. As of the date hereof, management does not believe that the Federal  
Reserve Board has given its approval to any waiver of dividends by any mutual   
holding company that has requested its approval. The cumulative amount of waived
dividends, if any, must be maintained in a restricted capital account that would
be added to any liquidation account of the Bank, and would not be available for 
distribution to Minority Stockholders. The Plan of Reorganization also provides 
that if the Mutual Company converts to stock form in the future, any waived     
dividends would reduce the percentage of the converted company's shares of      
Common Stock issued to Minority Stockholders in connection with any such        
transaction. See "Regulation--Holding Company Regulation--Dividend Waivers by   
the Mutual Company." It is not currently intended that the Mutual Company will  
waive dividends declared by the Company.                                        

Lending Risks Associated with Consumer, Commercial Business Lending and         
Commercial Real Estate                                                          

    At June 30, 1998, the Bank's consumer loans totaled $9.4 million, or 11.6%
of total loans, commercial business loans totaled $1.3 million, or 1.7% of total
loans, and commercial real estate loans totaled $4.5 million, or 5.6% of total  
loans. Consumer, commercial business and commercial real estate loans are       
generally considered to involve a greater risk of loss than residential mortgage
loans.                                                                          

Strong Competition within the Bank's Market Area                                

    Competition in the banking and financial services industry is intense. The
Bank competes with commercial banks, savings institutions, mortgage banking     
firms, credit unions, finance companies, mutual funds, insurance companies, and 
brokerage and investment banking firms operating locally and elsewhere. Many of 
these competitors have substantially greater resources and lending limits than  
the Bank and may offer certain services that the Bank does not or cannot        
provide. Trends toward the consolidation of the financial services industry, and
the removal of restrictions on interstate branching and bank powers may make it 
more difficult for smaller institutions such as the Bank to compete effectively 
with large national and regional banking institutions. The Bank's profitability 
depends upon its continued ability to successfully compete in its market area.  

Intent to Remain Independent                                                    

    The Bank operates as an independent community bank and intends to continue
to do so following the Reorganization. The Bank and the Company will be         
controlled by the Mutual Company, and control of the Mutual Company may not be  
sold to a third party. Accordingly, persons should not subscribe for shares of  
Common Stock with an expectation that a sale of control of the Bank or the      
Company is imminent. In the sale of control of a public company, an acquiror    
often will pay a significant premium over the then trading price of such public 
company's common stock. See "Business of the Bank."                             

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Regulatory Oversight and Legislation                                            

     The Bank is subject to extensive regulation, supervision and examination by
the Department and by the FDIC. The Bank is also a member of the Federal Home   
Loan Bank System and is subject to certain limited regulations promulgated by   
the Federal Home Loan Bank of New York. As bank holding companies, the Company  
and the Mutual Company also will be subject to regulation and oversight by the  
Federal Reserve Board. Such regulation and supervision govern the activities in 
which an institution and its holding company may engage and are intended        
primarily for the protection of the insurance fund and depositors. Regulatory   
authorities have extensive discretion in connection with their supervisory and  
enforcement activities that are intended to strengthen the financial condition  
of the banking industry, including the imposition of restrictions on the        
operation of an institution, the classification of assets and the adequacy of an
institution's allowance for loan losses. Any change in such regulation and      
oversight whether in the form of regulatory policy, regulations, or legislation,
could have a material impact on the Bank, the Company and the Mutual Company.   
See "Regulation."                                                               

Uncertainty as to Future Growth Opportunities                                   

In an effort to fully deploy the capital raised in the Offering and to
increase loan and deposit growth, the Bank may seek to acquire other financial  
institutions or branches in its market area. The Bank's ability to grow through 
selective acquisitions of other financial institutions or branches of such      
institutions will depend on successfully identifying, acquiring and integrating 
such institutions or branches. The Company and the Bank cannot assure           
prospective purchasers of Common Stock that they will be able to generate       
internal growth or identify attractive acquisition candidates, make acquisitions
on favorable terms or successfully integrate any acquired institutions or       
branches into the Bank. The Bank currently has no specific plans, arrangements  
or understandings regarding any such expansions or acquisitions, nor has        
management established criteria to identify potential candidates for            
acquisition.                                                                    

Absence of Active, Liquid Trading Market for Common Stock                       

   The Company, as a newly organized company, has never issued capital stock
and, consequently, there is no established market for the Common Stock at this  
time. The Company has applied to have its Common Stock quoted on the Nasdaq     
SmallCap Market under the symbol "GRNB." However, listing on the Nasdaq SmallCap
Market requires the presence of a minimum number of registered and active market
makers and a minimum number of record holders. If only the minimum of the       
Offering Range (705,039 shares) are sold, the Common Stock will not qualify for 
inclusion on the Nasdaq SmallCap Market, and the shares of Common Stock will    
instead be traded on the over-the-counter market with quotations available on   
the OTC "Bulletin Board" System (assuming the shares qualify under its listing  
conditions).                                                                    

Friedman, Billings, Ramsey & Co., Inc. intends to make a market in the
Common Stock but is under no obligation to do so, and the Company expects that  
additional market makers will be identified. A public trading market having the 
desirable characteristics of depth, liquidity and orderliness depends upon the  
existence of willing buyers and sellers at any given time, the presence of which
is dependent upon the individual decisions of buyers and sellers over which     
neither the Company nor any market maker has control. Accordingly, there can be 
no assurance that an active and liquid trading market for the Common Stock will 
develop or that, if developed, will continue, nor is there any assurance that   
purchasers of the Common Stock will be able to sell their shares at or above the
purchase price. In the event a liquid market for the Common Stock does not      
develop or market makers for the Common Stock discontinue their activities, such
occurrences may have an adverse impact on liquidity of the Common Stock and the 
market value of the Common Stock.                                               

Irrevocability of Orders; Potential Delay in Completion of Offering             

Orders submitted in the Offering are irrevocable. Funds submitted in  
connection with any purchase of Common Stock in the Offering will be held by the
Company until the completion or termination of the Reorganization, including any
extension of the expiration date. Because completion of the Reorganization will 
be subject to an update of the independent appraisal prepared by FinPro, among  
other factors, there may be one or more delays in the completion of the         
Reorganization. Subscribers will have no access to subscription funds and/or    
shares of Common Stock until the Reorganization is completed or terminated.     

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Increased Compensation Expenses Associated with the ESOP and Stock Award Plan   

     The Bank will recognize material employee compensation and benefit expenses
assuming the ESOP and the Stock Award Plan are implemented. The actual aggregate
amount of these new expenses cannot be predicted at the present time because    
applicable accounting practices require that such expenses be measured based on 
the fair market value of the shares of Common Stock. In the case of the ESOP,   
fair market value would be measured when shares are committed to be released for
allocation to the ESOP participants; in the case of the Stock Award Plan, fair  
market value would be measured at the grant date and amortized over the award's 
vesting period. These expenses have been reflected in the pro forma financial   
information under "Pro Forma Data" assuming the Purchase Price ($10.00 per      
share) represents the fair market value for accounting purposes. Actual         
expenses, however, will be based on the fair market value of the Common Stock at
future dates, which may be higher or lower than the Purchase Price. See         
"Management of the Bank--Executive Compensation--Employee Stock Ownership Plan  
and Trust" and "--Executive Compensation--Stock Award Plan."                    

Dilutive Effect of Stock Award Plan and Stock Option Plan                       

If the Reorganization and the Offering are completed and stockholders 
approve the Stock Award Plan and Stock Option Plan, the Company intends to issue
shares of Common Stock to officers and directors/trustees of the Bank through   
these plans. If the shares for these plans are issued from the Company's        
authorized but unissued Common Stock, the book value and earnings per share of  
Minority Stockholders would be diluted, and the trading price of the Company's  
Common Stock may be reduced. It is expected that earnings per share would be    
reduced by approximately $.02 and stockholders' equity per share would be       
reduced by approximately $.20 as a result of the implementation of the Stock    
Award Plan. The issuance of authorized-but-unissued shares of Common Stock to   
fund the Stock Award Plan in an amount equal to 4% of the Minority Ownership    
Interest would dilute the voting interests of existing stockholders by          
approximately 1.9%. The issuance of authorized-but- unissued shares of Common   
Stock pursuant to the Stock Option Plan in an amount equal to 10% of the        
Minority Ownership Interest would dilute the voting interests of existing       
stockholders by approximately 4.8%. See "Pro Forma Data" and "Management of the 
Bank--Executive Compensation."                                                  

Year 2000 Compliance                                                            

  Like many financial institutions, the Bank relies upon computers for the
daily conduct of its business and for data processing generally. There is       
concern that on January 1, 2000 computers will be unable to "read" the new year 
and as a consequence, there may be widespread computer malfunctions. The Bank's 
loan portfolio primarily consists of loans secured by real estate. Consequently,
the Bank does not believe that its lending operations depend on borrowers'      
compliance with the year 2000 issue. However, the Bank relies on independent    
third parties to provide data processing services associated with its deposit   
and loan activities. Moreover, in the event the Bank's significant suppliers do 
not successfully and timely achieve Year 2000 compliance, the Bank's business or
operations could be adversely affected. The Bank is in the process of testing   
its computer applications and hardware to ensure that they will be able to read 
the year 2000, and intends to complete testing by the end of the first calendar 
quarter in 1999. See "Management's Discussion and Analysis of Financial         
Condition and Results of Operations--Capability of the Bank's Data Processing to
Accommodate the Year 2000."                                                     

Role of the Financial Advisor/Best Efforts Offering                             

 The Bank and the Company have engaged Friedman, Billings, Ramsey & Co.,
Inc. as their financial and marketing advisor, and this firm has agreed to use  
its best efforts to solicit subscriptions and purchase orders for Common Stock  
in the Offering. The financial advisor has not prepared any report or opinion   
constituting a recommendation or advice to the Bank or the Company, nor has it  
prepared an opinion as to the fairness of the purchase price or the terms of the
Offering. Friedman, Billings, Ramsey & Co., Inc. has not verified the accuracy  
or completeness of the information contained in this Prospectus. See "The       
Reorganization and Offering--Plan of Distribution and Selling Commissions."     

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Possible Adverse Income Tax Consequences of the Distribution of Subscription    
Rights                                                                          

The Bank has received an opinion of FinPro that, pursuant to FinPro's 
valuation, subscription rights granted to Eligible Account Holders and          
Supplemental Eligible Account Holders have no value. However, such valuation is 
not binding on the IRS. If the subscription rights granted to Eligible Account  
Holders and Supplemental Eligible Account Holders are deemed to have an         
ascertainable value, receipt of such rights could result in taxable gain to     
those Eligible Account Holders and Supplemental Eligible Account Holders who    
receive and/or exercise the subscription rights in an amount equal to such      
value. Additionally, the Bank could recognize a gain for tax purposes on such   
distribution. Whether subscription rights are considered to have ascertainable  
value is an inherently factual determination. See "The Reorganization and       
Offering -- Federal and State Tax Consequences of the Reorganization".          

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 RECENT DEVELOPMENTS

   The following tables set forth certain financial and other information of
the Bank for the periods and as of the dates indicated. The financial data as of
June 30, 1998 have been derived in part from the audited financial statements of
the Bank and notes thereto presented elsewhere in this Prospectus. The financial
data as of September 30, 1998 and 1997 and for the three-month periods then     
ended have been derived in part from unaudited financial statements of the Bank 
which, in the opinion of the management, include all adjustments (consisting of 
normal recurring accruals) necessary for the fair presentation of such          
information. The results of operations for the three months ended September 30, 
1998 are not necessarily indicative of the results of operations that may be    
expected for the year ending June 30, 1999.                                     

                                                                [Download Table]


                                                      September 30,   June 30, 
                                                          1998          1998   
                                                      ------------    -------- 
                                                            (In Thousands)     
                                                                               

Selected Financial Condition Data:                                             

Total assets ......................................      $141,763      $140,253
Loans receivable, net .............................        82,742        80,260
Mortgage-backed securities (all available for sale)         4,651         5,189
Investment securities (all available for sale) ....        37,410        36,265
Asset-backed securities (all available for sale) ..         7,121         6,324
Deposits ..........................................       123,821       122,324
Total borrowings ..................................            --            --
Retained earnings, substantially restricted .......        16,305        15,730


                                                                [Download Table]


                                                Three Months Ended
                                                   September 30,  
                                                ------------------
                                                 1998        1997 
                                                ------      ------
                                                  (In Thousands)  
                                                                  

Selected Operations Data:                                         

Total interest income ....................      $2,472      $2,400
Total interest expense ...................       1,299       1,232
                                                 -----       -----
     Net interest income .................       1,173       1,168
Provision for loan losses ................          45          15
                                                 -----       -----
                                                 -----       -----
Net interest income after provision for                           
     loan losses .........................       1,128       1,153
Total non-interest income ................          81          75
Total non-interest expense ...............         807         695
                                                 -----       -----
                                                 -----       -----
Income before taxes and extraordinary item         402         533
Income tax provision .....................         153         192
                                                 -----       -----
Net income ...............................      $  249      $  341
                                                 -----       -----
                                                 -----       -----

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                                                        [Enlarge/Download Table]


                                                                            At or for the Three Months Ended
                                                                                        September 30,       
                                                                                      1998         1997     
                                                                                     ------       ------    
                                                                                                            

Selected Financial Ratios and Other Data:                                                                   
Performance Ratios(1):                                                                                      
     Return on average assets (ratio of net income to average total assets)            0.72%        1.04%   
     Return on average retained earnings (ratio of net income to average                                    
         retained earnings) ................................................           6.20         9.36    
     Ratio of operating expense to average total assets ....................           2.28         2.08    
     Ratio of average interest-earning assets to average                                                    
         interest-bearing liabilities ......................................         110.16       109.37    
     Net interest rate spread (2) ..........................................           3.18         3.35    
     Net interest margin (3) ...............................................           3.58         3.72    
     Efficiency ratio (4) ..................................................          65.88        55.91    

Asset Quality Ratios:                                                                                       
     Non-performing assets to total assets at end of period ................           0.44         0.71    
     Non-performing loans to total loans at end of period ..................           0.61         1.12    
     Allowance for loan losses to non-performing loans .....................         132.36        81.03    
     Allowance for loan losses to loans receivable, net ....................           0.80         0.90    

Capital Ratios:                                                                                             
     Retained earnings to total assets at end of period ....................          11.50        11.22    
     Average retained earnings to average assets ...........................          11.30        10.87    

Other Data:                                                                                                 
     Number of full-service offices ........................................           4            3       


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

(1)  Where applicable, ratios for the three-month periods were annualized and   
computed based on the monthly average balances.                       
(2)  The difference between the weighted average yield on average               
interest-earning assets and the weighted average cost of average      
interest-bearing liabilities.                                         
(3)  Net interest income as a percentage of average interest-earning assets.    
(4)  The ratio of non-interest expense dividend by the sum of net interest      
income and non-interest income.                                       

Comparison of Financial Condition at September 30, 1998 and June 30, 1998       

     Assets. Total assets increased to $141.8 million at September 30, 1998 from
$140.3 million at June 30, 1998, an increase of $1.5 million, or 1.1%. This     
increase resulted primarily from a $2.5 million, or 3.1%, increase in loans     
receivable, net, as well as increases of $1.1 million, or 3.2%, in investment   
securities and $797,000, or 12.6%, in asset-backed securities. The growth in    
total assets reflected the Bank's strategy of investing in fixed-rate           
residential mortgage loans, as well as increased demand for such loans in the   
current low interest rate environment. Asset growth was funded by deposits,     
which increased by $1.5 million, or 1.2%, as well as principal paydowns of      
mortgage-backed securities, which decreased by $538,000, or 10.4%, at September 
30, 1998 as compared to June 30, 1998.                                          

   Liabilities. Total deposits increased by $1.5 million, or 1.2%, to $123.8
million at September 30, 1998 compared to $122.3 million at June 30, 1998. The  
growth in total deposits reflected an increase of $306,000, or 0.6%, in         
certificate accounts and an increase of $1.2 million, or 1.8%, in passbook and  
other accounts. At September 30, 1998, the Bank had no borrowings outstanding.  

    Retained Earnings. Total retained earnings increased by $575,000, or 3.7%,
to $16.3 million at September 30, 1998 from $15.7 million at June 30, 1998. The 
increase in total retained earnings resulted from after tax net income of       

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$249,000 for the three months ended September 30, 1998 as well as an increase of
$326,000 in net unrealized gain on securities available for sale.               

Comparison of Operating Results for the Three Months Ended September 30, 1998   
and 1997                                                                        

General. Net income for the three months ended September 30, 1998 was 
$249,000, a decrease of $92,000, or 27.0%, from net income of $341,000 for the  
three months ended September 30, 1997. The decrease in net income was due       
primarily to an increase of $112,000, or 16.1%, in non-interest expense and an  
increase of $30,000, or 200.0% in the provision for loan losses to $45,000 for  
the three months ended September 30, 1998, compared to $15,000 for the three    
months ended September 30, 1997.                                                

 Interest Income. Interest income increased by $72,000, or 3.0%, to $2.5
million for the three months ended September 30, 1998 from $2.4 million for the 
three months ended September 30, 1997. The increase was due primarily to a      
$62,000, or 3.9%, increase in interest income received on loans and a $29,000,  
or 4.2%, increase in interest and dividends on investment securities for the    
three months ended September 30, 1998 as compared to the three months ended     
September 30, 1997. The increase in interest from loans was attributable to a   
$3.8 million, or 5.1%, increase in the average balance of loans receivable,     
partially offset by a ten basis point decrease in the average yield on loans    
receivable to 8.42% for the three months ended September 30, 1998 from 8.52% for
the three months ended September 30, 1997. The growth in the average balance of 
loans receivable reflected demand for the Bank's fixed-rate one- to four-family 
real estate loans in the current low market interest rate environment. The      
increase in interest and dividends from investment securities reflected a $3.5  
million, or 8.4%, increase in the average balance of investment securities,     
which more than offset a decrease in the yield on such investment securities to 
6.38% for the three months ended September 30, 1998 from 6.64% for the three    
months ended September 30, 1997. The increase in the average balance of         
investment securities reflected the deployment of liquidity pending investments 
in higher-yielding mortgage loans.                                              

   Interest Expense. Interest expense increased by $65,000, or 5.3%, to $1.3
million for the three months ended September 30, 1998 from $1.2 million for the 
three months ended September 30, 1997. The increase in interest expense         
reflected an increase of $85,000, or 11.8%, in interest expense on certificate  
accounts, as the average balance of such accounts increased by $3.5 million, or 
7.0%, to $53.5 million for the three months ended September 30, 1998 from $50.0 
million for the three months ended September 30, 1997, and the average rate paid
on such accounts increased 25 basis points to 6.03% for the three months ended  
September 30, 1998. The increase in the average balance of certificate accounts 
reflected investor demand for such accounts given the higher rates paid by the  
Bank on such accounts as compared to the rates paid on savings deposits.        

   Provision for Loan Losses. The Bank's provision for loan losses increased
to $45,000 for the three months ended September 30, 1998 compared to $15,000 for
the three months ended September 30, 1997. The higher provision was due, in     
part, to the continued growth in the loan portfolio and management's ongoing    
assessment of the inherent risk in the portfolio. Management regularly reviews  
the Bank's loan portfolio and makes provisions for loan losses to maintain the  
adequacy of the allowance. At September 30, 1998, the allowance for loan losses 
as a percentage of total nonperforming loans was 132.36%, compared to 81.03% at 
September 30, 1997.                                                             

  Noninterest Income. Noninterest income increased by $6,000, or 8.0%, for
the three months ended September 30, 1998 as compared to the three months ended 
September 30, 1997.                                                             

   Noninterest Expense. Noninterest expense increased by $112,000, or 16.1%,
to $807,000 for the three months ended September 30, 1998 from $695,000 for the 
three months ended September 30, 1997. The increase reflected an increase of    
$44,000, or 11.7%, in employee compensation and benefits, an increase of        
$36,000, or 101.5%, in occupancy expense, an increase of $6,000, or 29.0%, in   
advertising expense, and an increase of $11,000, or 90.8% in office supplies.   
Much of the foregoing increases was attributed to the Bank's new branch office  
in Greenville, New York, which opened in December 1997.                         

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  Income Taxes. Income tax expense was $153,000 for the three months ended
September 30, 1998 compared to $192,000 for the three months ended September 30,
1997. The effective tax rate increased to 38.0% for the three months ended      
September 30, 1998 from 36.0% for the three months ended September 30, 1997.    

 GREENE COUNTY BANCORP, INC.

   The Company was organized for the purpose of acquiring all of the capital
stock of the Bank upon completion of the Reorganization and the Offering. The   
Company has applied to the Federal Reserve Board to become a bank holding       
company and, upon completion of the Reorganization, will be subject to          
regulation by the Federal Reserve Board. See "The Reorganization and            
Offering--Description of and Reasons for the Reorganization" and                
"Regulation--Holding Company Regulation." Upon completion of the Reorganization,
the Company will have no significant assets other than the shares of the Bank's 
common stock and an amount equal to 50% of the net proceeds of the Offering,    
including the loan to the ESOP, and will have no significant liabilities. The   
Company intends to use a portion of the net proceeds that it retains to loan to 
the ESOP funds to enable the ESOP to purchase up to 8% of the Minority Ownership
Interest. See "Use of Proceeds." The management of the Company is set forth     
under "Management of the Company." Initially, the Company will neither own nor  
lease any property, but will instead use the premises, equipment and furniture  
of the Bank. At the present time, the Company does not intend to employ any     
persons other than certain officers who are currently officers of the Bank and  
will utilize the support staff of the Bank from time to time. Additional        
employees will be hired as appropriate to the extent the Company expands its    
business in the future.                                                         

 Management believes that the holding company structure will provide the
Company additional flexibility to diversify its business activities through     
existing or newly formed subsidiaries, or through acquisitions of, or mergers   
with, other financial institutions and financial services related companies.    
There are no current arrangements, understandings or agreements regarding any   
such opportunities. However, subsequent to the Reorganization, the Company will 
be in a position, subject to regulatory limitations and the Company's financial 
position, to take advantage of any such acquisition and expansion opportunities 
that may arise. The initial activities of the Company are anticipated to be     
funded by the proceeds to be retained by the Company, income thereon and through
dividends from the Bank.                                                        

   The Company's executive office is located at the main office of the Bank,
at 425 Main Street, Catskill, New York 12414-1317. The Company's telephone      
number is (518) 943-3700.                                                       

GREENE COUNTY SAVINGS BANK

The Bank was organized in 1889 as The Building and Loan Association of
Catskill, a New York-chartered savings and loan association. In 1974, the Bank  
converted to a New York mutual savings bank under the name Greene County Savings
Bank. In conjunction with the Reorganization and the Offering, the Bank is      
changing its name to The Bank of Greene County. The Bank's deposits are insured 
by the Bank Insurance Fund ("BIF"), as administered by the FDIC, up to the      
maximum amount permitted by law. The Bank is a community-oriented financial     
institution engaged primarily in the business of accepting deposits from        
customers through its main office and three full service branch offices, and    
using those deposits, together with funds generated from operations and         
borrowings, to make one- to four- family residential and commercial real estate 
loans, commercial business loans and consumer loans, and to invest in investment
securities, mortgage-backed securities and asset-backed securities.             

At June 30, 1998, the Bank had total assets of $140.3 million, total  
deposits of $122.3 million and retained earnings of $15.7 million. At June 30,  
1998, $70.4 million, or 86.7% of the Bank's loans were secured by real estate   
and $64.7 million, or 79.7%, of the Bank's loans were secured by one- to        
four-family residential real estate. Commercial real estate loans totaled $4.5  
million, or 5.6%, of the Bank's total loans at June 30, 1998. Consumer loans    
totaled $9.4 million, or 11.6% of the Bank's total loans, at June 30, 1998. The 
Bank also originates commercial business loans, which totaled $1.3 million, or  
1.7% of total loans. The Bank's investment securities, mortgage-backed          
securities and asset-backed securities portfolios totaled $36.3 million, $5.2   
million and $6.3 million, respectively, at June 30, 1998.                       

  The Bank's main office is located at 425 Main Street, Catskill, New York
12414-1317. The Bank's telephone number is (518) 943-3700.                      

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 MARKET AREA

  The Bank is a community bank that offers a variety of financial products
and services. The Bank's primary lending area is in Greene County, New York.    
Likewise, most of the Bank's deposit customers reside in Greene County, New     
York. The Bank's market area is characterized as rural.                         

 REGULATORY CAPITAL COMPLIANCE

At June 30, 1998, the Bank exceeded each of its regulatory capital    
requirements. Set forth below is a summary of the Bank's compliance with the    
FDIC capital standards as of June 30, 1998, on a historical and pro forma basis 
assuming that the indicated number of shares were sold as of such date and the  
Bank received 50% of the net proceeds. For purposes of the table below, the     
amount expected to be borrowed by the ESOP and the cost of the shares expected  
to be acquired by the Stock Award Plan are deducted from pro forma regulatory   
capital. The Federal Reserve Board has adopted capital adequacy guidelines for  
bank holding companies (on a consolidated basis) substantially similar to the   
FDIC capital requirements for the Bank. On a pro forma consolidated basis after 
the Reorganization and Offering, the Company's pro forma stockholders' equity   
will exceed these requirements. See "Regulation--Holding Company Regulation."   

                                                        [Enlarge/Download Table]


                                                       Pro Forma at June 30, 1998, Based upon the Sale at $10.00 per share of     
                                                       ----------------------------------------------------------------------     
                                       Historical at        705,039            829,458            953,877            1,096,958    
                                       June 30, 1998        Shares             Shares             Shares             Shares(1)    
                                       --------------       -------            --------           -------            ---------    
                                                                                                                                  
GAAP capital ......................  $15,730   11.22%  $18,042   12.66%   $18,508   12.94%    $18,974   13.22%    $19,511   13.55%
                                     -------   -----   -------   -----    -------   -----     -------   -----     -------   ----- 
                                     -------   -----   -------   -----    -------   -----     -------   -----     -------   ----- 

Leverage capital:                                                                                                                 
         Capital level(3) .........  $15,488   11.09%  $17,800   12.53%  $18,266    12.82%    $18,732   13.10%    $19,269   13.43%
         Requirement(4) ...........    5,588    4.00     5,680    4.00     5,699     4.00       5,718    4.00       5,739    4.00 
                                     -------   -----   -------   -----   -------    -----     -------   -----     -------   ----- 
                  Excess ..........  $ 9,900    7.09%  $12,120    8.53%  $12,567     8.82%    $13,014    9.10%    $13,530    9.43%
                                     -------   -----   -------   -----   -------    -----     -------   -----     -------   ----- 
                                     -------   -----   -------   -----   -------    -----     -------   -----     -------   ----- 

Risk-based capital:                                                                                                               
         Tier 1 capital level(3)(5)  $15,488   20.32%  $17,800   23.00%  $18,266    23.53%    $18,732   24.06%    $19,269   24.67%
         Requirement ..............    3,049    4.00     3,095    4.00     3,105     4.00       3,114    4.00       3,125    4.00 
                                     -------   -----   -------   -----   -------    -----     -------   -----     -------   ----- 
                  Excess ..........  $12,439   16.32%  $14,705   19.00%  $15,161    19.53%    $15,618   20.06%    $16,144   20.67%
                                     -------   -----   -------   -----   -------    -----     -------   -----     -------   ----- 
                                     -------   -----   -------   -----   -------    -----     -------   -----     -------   ----- 

Total capital level(3)(5) .........  $16,216   21.27%  $18,528   23.94%  $18,994    24.47%    $19,460   25.00%    $19,997   25.60%
  Requirement .....................    6,098    8.00     6,191    8.00     6,209     8.00       6,228    8.00       6,249    8.00 
                                     -------   -----   -------   -----   -------    -----     -------   -----     -------   ----- 
  Excess ..........................  $10,118   13.27%  $12,337   15.94%  $12,785    16.47%    $13,232   17.00%    $13,748   17.60%
                                     -------   -----   -------   -----   -------    -----     -------   -----     -------   ----- 
                                     -------   -----   -------   -----   -------    -----     -------   -----     -------   ----- 

--------------------------                                                      
(1)  As adjusted to give effect to an increase in the number of shares that     
  could occur due to an increase in the Estimated Valuation Range of up to
 15% as a result of regulatory considerations, demand for the shares, or
   changes in market conditions or general financial and economic conditions
following the commencement of the Offering.                           

(2)  Leverage capital levels are shown as a percentage of average assets.       
  Risk-based capital levels are calculated on the basis of a percentage of
risk-weighted assets.                                                 

(3)  Pro forma capital levels assume: funding by the Bank of the Stock Award    
  Plan to enable the plan to acquire in the open market a number of shares
     equal to 4% of the Minority Ownership Interest; the purchase by the ESOP of
     8% of the Minority Ownership Interest; and the capitalization of the Mutual
 Company by the Bank with $1,000. See "Management of the Bank--Executive
Compensation" for a discussion of the Stock Award Plan and ESOP.      

(4)  The current leverage capital requirement is 3% of total adjusted assets for
    banks that receive the highest supervisory rating for safety and soundness
and that are not experiencing or anticipating significant growth. The 
   current leverage capital ratio applicable to all other banks is 4% to 5%.
See "Regulation--Regulatory Capital Requirements.                     

(5)  Assumes net proceeds are invested in assets that carry a risk-weighting    
   equal to the average risk-weighting of the Bank's risk-weighted assets as
of June 30, 1998.                                                     

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 USE OF PROCEEDS

                Although the actual net proceeds from the sale of the Common
Stock cannot be determined until the Offering is completed, it is presently     
anticipated that the net proceeds from the sale of the Common Stock will be     
between $6.5 million and $9.0 million (or $10.4 million if the Estimated        
Valuation Range is increased by 15%). See "Pro Forma Data" and "The             
Reorganization and Offering--Stock Pricing and Number of Shares to Be Issued" as
to the assumptions used to arrive at such amounts. The Company will be unable to
utilize any of the net proceeds of the Offering until the consummation of the   
Reorganization.                                                                 

              The Company will contribute 50% of the net proceeds of the
Offering to the Bank, or $3.2 million to $5.2 million at the minimum and        
adjusted maximum of the Estimated Valuation Range, respectively. Such portion of
net proceeds received by the Bank from the Company will be used by the Bank for 
general corporate purposes, including investments in short- and medium-term     
investment grade debt securities, in mortgage- and asset-backed securities, and 
to increase the origination of mortgage, consumer and commercial business loans.
The Bank may also use such funds to expand operations through acquisitions of   
other financial institutions, branch offices or other financial services        
companies, although the Bank and the Company have no current arrangements,      
understandings or agreements regarding any such transactions. To the extent that
the stock-based benefit programs that the Company intends to adopt subsequent to
the Offering are not funded with authorized-but-unissued shares of Common Stock,
the Company or the Bank may use net proceeds from the Offering to fund the      
purchase of stock to be awarded under such stock benefit programs. See "Risk    
Factors--Dilutive Effect of Stock Award Plan and Stock Option Plan" and         
"Management of the Bank--Executive Compensation--Stock Option Plan" and "--Stock
Award Plan."                                                                    

               The Company intends to use a portion of the net proceeds it
retains to make a loan directly to the ESOP to enable the ESOP to purchase      
Common Stock equal to 8% of the Minority Ownership Interest. Based upon the sale
of 705,039 shares or 953,877 shares at the minimum and maximum of the Estimated 
Valuation Range, respectively, the amount of the loan to the ESOP would be      
$588,900 or $796,750, respectively (or $916,000 if the Estimated Valuation Range
is increased by 15%). See "Management of the Bank--Executive                    
Compensation--Employee Stock Ownership Plan and Trust." The remaining net       
proceeds retained by the Company will initially be invested in U.S. government  
and agency securities, short- and medium-term debt obligations, mortgage-backed 
securities and other marketable securities.                                     

                The net proceeds retained by the Company may also be used to
support the future expansion of operations through the acquisition of financial 
institutions or their assets, including those located within the Bank's market  
area, or diversification into other banking related businesses. However, the    
Company and the Bank have no current arrangements, understandings or agreements 
regarding any such transactions. Upon completion of the Reorganization, the     
Company will be a bank holding company, and will be permitted to engage only in 
those activities that are permissible for bank holding companies under the Bank 
Holding Company Act, as administered by the Federal Reserve Board. See          
"Regulation -- Holding Company Regulation" for a description of certain         
regulations applicable to the Company.                                          

                 Upon completion of the Reorganization, the board of directors
of the Company will have the authority to adopt stock repurchase plans, subject 
to statutory and regulatory requirements. Pursuant to New York regulations, and 
without the prior approval of the Department, the Company may not repurchase any
Common Stock in the first year after the Reorganization, and during each of the 
next two following years, may not repurchase more than 5% of its shares         
outstanding. In addition, the FDIC prohibits an insured savings bank that has   
converted from the mutual to stock form of ownership from repurchasing its      
capital stock within one year following the date of completion of its stock     
offering, except that stock repurchases of no greater than 5% of a bank's       
outstanding capital stock may be repurchased during this one-year period where  
compelling and valid business reasons are established to the satisfaction of the
FDIC. Based upon facts and circumstances following completion of the            
Reorganization and subject to applicable regulatory requirements, the board of  
directors may determine to repurchase stock in the future. Such facts and       
circumstances may include but not be limited to: (i) market and economic factors
such as the price at which the stock is trading in the market, the volume of    
trading, the attractiveness of other investment alternatives in terms of the    
rate of return and risk involved in the investment, the ability to increase the 
book value and/or earnings per share of the remaining outstanding shares, and   
the opportunity to improve the Company's return on equity; (ii) the avoidance of
dilution to stockholders by not having to issue additional shares to cover the  
exercise of stock options or to fund employee stock benefit plans;              

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and (iii) any other circumstances in which repurchases would be in the best     
interests of the Company and its stockholders. In the event the Company         
determines to repurchase stock, such repurchases may be made at market prices   
which may be in excess of the $10.00 per share purchase price in the Offering   
(the "Subscription Price"). Any stock repurchases will be subject to the        
determination of the Company's board of directors that both the Company and the 
Bank will be capitalized in excess of all applicable regulatory requirements    
after any repurchases and that such capital will be adequate, taking into       
account, among other things, the level of non-performing and other risk assets, 
the Company's and the Bank's current and projected results of operations and    
asset/liability structure, the economic environment, tax and other              
considerations.                                                                 

 DIVIDEND POLICY

            The Company has no present plans to pay dividends on the
Common Stock, although it may consider the payment of such dividends in the     
future. Dividends will be subject to determination and declaration by the       
Company's Board of Directors in its discretion, after taking into account the   
Company's consolidated financial condition, capital levels, general business    
practices and other factors.                                                    

            Under Delaware law, the Company is permitted to pay cash
dividends, provided that the amount of cash dividends paid may not exceed that  
amount by which the net assets of the Company (the amount by which total assets 
exceed total liabilities) exceeds its statutory capital, or if there is no such 
excess, the net profits for the current and/or immediately preceding fiscal     
year. The Company's source for the payment of cash dividends may in the future  
depend on the receipt of cash dividends from the Bank. The Bank will not be     
permitted to pay dividends on its Common Stock or repurchase shares of its      
Common Stock if its stockholders' equity would be reduced below the amount      
required for the liquidation account. The liquidation account is expected       
initially to total $15.7 million. See "The Reorganization and                   
Offering--Liquidation Rights." Under New York Banking Law, dividends paid by the
Bank may be declared and paid only out of the net profits of the Bank. The      
approval of the Superintendent is required if the total of all dividends        
declared in any calendar year will exceed net profits for that year plus the    
retained net profits of the preceding two years, less any required transfer to  
surplus or a fund for the retirement of any preferred stock. In addition, no    
dividends may be declared, credited or paid if the effect thereof would cause   
the Bank's capital to be reduced below the amount required by the Superintendent
or the FDIC. See "Regulation." Subsequent to the Offering, the availability of  
the Bank's funds for the payment of dividends may be limited by the liquidation 
account. See "The Reorganization and Offering--Liquidation Rights." Dividends in
excess of the Bank's current and accumulated earnings could result in the       
realization by the Bank of taxable income. Management of the Bank has no current
plans to pay dividends in excess of the Bank's current and accumulated earnings.
See "Federal and State Taxation--Federal Taxation."                             

 MARKET FOR COMMON STOCK

                The Company was recently formed and has never issued capital
stock. The Bank, as a mutual institution, has never issued capital stock. The   
Company has applied to have its Common Stock quoted on the Nasdaq SmallCap      
Market under the symbol "GRNB". However, listing on the Nasdaq SmallCap Market  
requires the presence of a minimum number of registered and active market       
makers, and a minimum number of record holders. If only the minimum of the      
Offering Range (705,039 shares) are sold, the Common Stock will not qualify for 
inclusion on the Nasdaq SmallCap Market, and the shares of Common Stock will    
instead be traded on the over-the-counter market with quotations available on   
the OTC "Bulletin Board" System.                                                

            Friedman, Billings, Ramsey & Co., Inc. intends to make a
market in the Common Stock but is under no obligation to do so. The Company     
expects that additional market makers will be identified. If the Company is     
unable, for any reason, to list the Common Stock on the Nasdaq SmallCap Market, 
or to continue to be eligible for listing, the Common Stock will be listed on   
the over-the-counter market with quotations available on the OTC Bulletin Board 
(assuming the shares qualify under its listing conditions).                     

                 The existence of a public trading market will depend upon the
presence in the market of both willing buyers and willing sellers at any given  
time. The presence of a sufficient number of buyers and sellers at any given    
time is a factor over which neither the Company nor any broker or dealer has    
control. The absence of an active and liquid trading market may make it         
difficult to sell the Common Stock and may have an adverse effect on the price  
of the Common Stock. Purchasers should consider the potentially illiquid and    
long-term nature of their investment in the Common Stock.                       

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CAPITALIZATION

                 The following table presents the historical capitalization of
the Bank at June 30, 1998, and the pro forma consolidated capitalization of the 
Company after giving effect to the Offering and the Reorganization, including   
the issuance of shares to the Charitable Foundation, based upon the sale of the 
number of shares indicated in the table and the other assumptions set forth     
under "Pro Forma Data."                                                         

                                                        [Enlarge/Download Table]

                                                          Company Pro Forma Based upon the Sale at $10.00 Per Share of 
                                                        ---------------------------------------------------------------
                                                                                                             1,096,958 
                                                                      705,039       829,458     953,877        Shares  
                                                           Bank       Shares        Shares      Shares       (Adjusted 
                                                        Historical   (Minimum)    (Midpoint)   (Maximum)    Maximum)(1)
                                                        ----------   --------     ----------   ---------    -----------
                                                                                (In Thousands)                         

                                                                                                                       
Deposits(2) ..........................................  $122,324     $122,324     $122,324     $122,324     $122,324   
Other borrowings .....................................      --           --           --           --                  
                                                        --------     --------     --------     --------     --------   
Total deposits and other borrowed funds ..............  $122,324     $122,324     $122,324     $122,324     $122,324   
                                                        --------     --------     --------     --------     --------   
                                                        --------     --------     --------     --------     --------   

Stockholders' equity:                                                                                                  
   Common Stock, $.10 par value, 4,000,000 shares                                                                      
       authorized; shares to be issued as reflected(3)  $   --       $    162     $    190     $    219     $    251   
   Additional paid-in capital(4) .....................      --          6,228        7,445        8,660       10,059   
   Retained earnings(5) ..............................    15,488       15,487       15,487       15,487       15,487   
Less:                                                                                                                  
   After tax cost of Charitable Foundation(6) ........      --            247          280          313          350   
Plus:                                                                                                                  
   Expenses of contribution to  Charitable Foundation       --            411          466          521                
                                                                                                                 584   
   Net unrealized gain on securities available                                                                         
       for sale, net of taxes ........................       242          242          242          242          242   
Less:                                                                                                                  
   Common Stock acquired by the ESOP(7) ..............      --            589          693          797          916   
   Common Stock acquired by the Stock Award Plan (8) .      --            294          346          398          458   
                                                        --------     --------     --------     --------     --------   
Total stockholders' equity ...........................  $ 15,730     $ 21,400     $ 22,511     $ 23,621     $ 24,899   
                                                        --------     --------     --------     --------     --------   
                                                        --------     --------     --------     --------     --------   

----------------------                                                          
(1)  As adjusted to give effect to an increase in the number of shares which    
  could occur due to an increase in the Estimated Valuation Range of up to
 15% as a result of regulatory considerations, demand for the shares, or
  changes in market or general financial and economic conditions following
the commencement of the Offering.                                     

(2)  Does not reflect withdrawals from deposit accounts for the purchase of     
   Common Stock, which would reduce pro forma deposits by the amount of such
withdrawals.                                                          

(3)  Includes shares to be issued to depositors and the public in the Offering, 
     as indicated herein, and 878,970, 1,034,082, 1,189,194 and 1,376,574 shares
 to be issued to the Mutual Company and the Charitable Foundation at the
    minimum, midpoint, maximum and adjusted maximum of the Estimated Valuation
Range, respectively.                                                  

(4)  Reflects the sale of shares in the Offering. No effect has been given to   
 the issuance of additional shares of Common Stock pursuant to the Stock
Option Plan to be adopted by the Company and presented for approval of
  stockholders following the Offering. The Stock Option Plan would provide
 for the grant of stock options to purchase a number of shares of Common
   Stock equal to 10% of the Minority Ownership Interest. See "Management of
the Bank--Executive Compensation--Stock Option Plan."                 

(5)  The retained earnings of the Bank will be substantially restricted after   
  the Offering. See "The Reorganization and Offering--Liquidation Rights."
Assumes that the Mutual Company will be capitalized by the Bank with  
$1,000.                                                               

(6)  Represents the tax effect of the contribution to the Charitable Foundation 
 based on a 40% tax rate. The realization of the deferred tax benefit is
    limited annually to 10% of the Company's annual taxable income, subject to
the ability of the Company to carry forward any unused portion of the 
  deduction for five years following the year in which the contribution is
made.                                                                 

(7)  Assumes that 8% of the Minority Ownership Interest will be purchased by the
  ESOP and that the funds used to acquire the ESOP shares will be borrowed
   from the Company. The Common Stock acquired by the ESOP is reflected as a
   reduction of stockholders' equity. See "Management of the Bank--Executive
Compensation--Employee Stock Ownership Plan and Trust."               

(8)  Assumes that, subsequent to the Offering, an amount equal to 4% of the     
  Minority Ownership Interest is purchased by the Stock Award Plan through
 open market purchases. In the event the Stock Award Plan is implemented
   more than one year after the Reorganization, an amount equal to 5% of the
   Minority Ownership Interest may be implemented. The actual purchase price
     per share may be more or less than $10.00. The Common Stock to be purchased
   by the restricted stock plan is reflected as a reduction to stockholders'
  equity. See "Risk Factors--Dilutive Effect of Stock Award Plan and Stock
Option Plan," footnote 3 to the table under "Pro Forma Data," and     
"Management of the Bank--Executive Compensation--Stock Award Plan."   

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PRO FORMA DATA

             The actual net proceeds from the sale of the Common Stock
cannot be determined until the Offering is completed. However, net proceeds are 
currently estimated to be between $6.5 million and $9.0 million (or up to $10.5 
million) based upon the following assumptions: (i) Friedman, Billings, Ramsey & 
Co., Inc. will receive a fixed fee of $110,000; (ii) the Charitable Foundation  
will be funded with a total contribution equal to 2.0% of the shares of Common  
Stock issued in the Reorganization and $100,000 in cash; (iii) Reorganization   
expenses, excluding the fees payable to Friedman, Billings, Ramsey & Co., Inc., 
will be approximately $450,000; and (iv) the Mutual Company will be capitalized 
by the Bank with $1,000. Actual expenses may vary from those estimated.         

                 Pro forma consolidated net income of the Company for the year
ended June 30, 1998 has been calculated as if the Common Stock had been sold at 
the beginning of the period and the net proceeds had been invested at 5.41% (the
one year U.S. Treasury bill rate as of June 30, 1998). The tables do not reflect
the effect of withdrawals from deposit accounts for the purchase of Common      
Stock. The pro forma after-tax yield for the Company and the Bank is assumed to 
be 3.25% for the year ended June 30, 1998 (based on an assumed tax rate of 40%).
Historical and pro forma per share amounts have been calculated by dividing     
historical and pro forma amounts by the indicated number of shares of Common    
Stock, as adjusted to give effect to the purchase of shares by the ESOP. No     
effect has been given in the pro forma stockholders' equity calculations for the
assumed earnings on the net proceeds. As discussed under "Use of Proceeds," the 
Company will retain 50% of the net proceeds from the Offering.                  

                 The following pro forma information may not be representative
of the financial effects of the foregoing transactions at the dates on which    
such transactions actually occur and should not be taken as indicative of future
results of operations. Pro forma consolidated stockholders' equity represents   
the difference between the stated amount of assets and liabilities of the       
Company, is not intended to represent the fair market value of the Common Stock,
and may be greater than amounts that would be available for distribution to     
stockholders in the event of liquidation.                                       

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                                                        [Enlarge/Download Table]

                                                                       At or for the Year Ended June 30, 1998                       

                                                                                                                        1,096,958   
                                                                  705,039           829,458            953,877       Shares Sold at 
                                                               Shares Sold at    Shares Sold at    Shares Sold at   $10.00 per Share
                                                              $10.00 per Share  $10.00 per Share  $10.00 per Share      (Adjusted   
                                                                (Minimum)          (Midpoint)         (Maximum)        Maximum)(7)  
                                                              ----------------  ----------------  ----------------  ----------------
                                                                                                                                    
                                                                          (Dollars in Thousands, Except Per Share Amounts)          

Gross proceeds .................................................  $     7,050      $     8,295       $     9,539       $    10,970  
     Plus: Value issued to Charitable Foundation ...............          311              366               421               484  
                                                                  -----------      -----------       -----------       -----------  
Pro forma market capitalization ................................  $     7,361      $     8,661       $     9,960       $    11,454  
                                                                  -----------      -----------       -----------       -----------  
                                                                  -----------      -----------       -----------       -----------  
    Gross proceeds .............................................        7,050            8,295             9,539            10,970  
    Less: Capital to Mutual Company ............................            1                1                 1                 1  
    Less: Cash contribution to Charitable Foundation ...........          100              100               100               100  
             Expenses ..........................................          560              560               560               560  
                                                                  -----------      -----------       -----------       -----------  
    Estimated net proceeds .....................................        6,389            7,634             8,878            10,309  
    Less: Common Stock purchased by ESOP .......................          589              693               797               916  
             Common Stock purchased by Stock Award Plan ........          294              346               398               458  
                                                                  -----------      -----------       -----------       -----------  
    Estimated net proceeds, as adjusted ........................  $     5,506      $     6,595       $     7,683       $     8,935  
                                                                  -----------      -----------       -----------       -----------  
                                                                  -----------      -----------       -----------       -----------  
    Net income(1):                                                                                                                  
         Historical ............................................        1,150            1,150             1,150             1,150  
         Pro forma income on net proceeds, as adjusted .........          179              214               249               290  
         Pro forma ESOP adjustment (2) .........................           35               42                48                55  
         Pro forma Stock Award Plan adjustment (3) .............           35               42                48                55  
                                                                  -----------      -----------       -----------       -----------  
    Pro forma net income (1) ...................................  $     1,259      $     1,280       $     1,303       $     1,330  
                                                                  -----------      -----------       -----------       -----------  
                                                                  -----------      -----------       -----------       -----------  
    Per share net income (1):                                                                                                       
         Historical ............................................  $      0.75      $      0.64       $      0.56       $      0.48  
    Pro forma income on net proceeds, as adjusted ..............         0.12             0.12              0.12              0.12  
    Pro forma ESOP adjustment (2) ..............................        (0.02)           (0.02)            (0.02)            (0.02) 
    Pro forma Stock Award Plan adjustment (3) ..................        (0.02)           (0.02)            (0.02)            (0.02) 
                                                                  -----------      -----------       -----------       -----------  
    Pro forma net income per share (1) .........................  $      0.83      $      0.72       $      0.64       $      0.56  
                                                                  -----------      -----------       -----------       -----------  
                                                                  -----------      -----------       -----------       -----------  
    Number of shares used in calculating pro forma net                                                                              
       income per share ........................................    1,531,008        1,801,185         2,071,363         2,382,068  
                                                                  -----------      -----------       -----------       -----------  
                                                                  -----------      -----------       -----------       -----------  
    Stockholders' equity:                                                                                                           
         Historical ............................................       15,730           15,730            15,730            15,730  
         Estimated net proceeds ................................        6,389            7,634             8,878            10,309  
    Plus: Value issued to Charitable Foundation ................          411              466               521               584  
    Less: After tax cost of Charitable Foundation ..............         (247)            (280)             (313)             (350) 
      Less: Common Stock acquired by ESOP (2) ..................         (589)            (693)             (797)             (916) 
      Less: Common Stock acquired by Stock Award Plan(3) .......         (294)            (346)             (398)             (458) 
                                                                  -----------      -----------       -----------       -----------  
    Pro forma stockholders' equity (3)(4)(5) ...................  $    21,400      $    22,511       $    23,621       $    24,899  
                                                                  -----------      -----------       -----------       -----------  
                                                                  -----------      -----------       -----------       -----------  
   Stockholders' equity per share (6):                                                                                              
         Historical ............................................         9.93             8.44              7.34              6.38  
    Estimated net proceeds .....................................         4.03             4.10              4.14              4.18  
    Capitalization of the Mutual Company                                                                                            
      Plus: Shares issued to Charitable Foundation .............         0.26             0.25              0.24              0.24  
      Less: Contributions to Charitable Foundation .............        (0.16)           (0.15)            (0.15)            (0.14) 
      Plus: Tax benefit of contribution to Charitable Foundation                                                                    
      Less: Common Stock acquired by ESOP (2) ..................        (0.37)           (0.37)            (0.37)            (0.37) 
               Common Stock acquired by Stock Award Plan (3) ...        (0.19)           (0.19)            (0.19)            (0.19) 
                                                                  -----------      -----------       -----------       -----------  
    Pro forma stockholders' equity per share (3)(4)(5) .........  $     13.50      $     12.08       $     11.01       $     10.10  
                                                                  -----------      -----------       -----------       -----------  
                                                                  -----------      -----------       -----------       -----------  
    Number of shares used in calculating pro forma                                                                                  
       stockholders' equity per share ..........................    1,584,009        1,863,540         2,143,071         2,464,532  
                                                                  -----------      -----------       -----------       -----------  
                                                                  -----------      -----------       -----------       -----------  
    Offering price to pro forma net income per share ...........       12.05x           13.89x            15.63x            17.86x  
    Offering price as a percentage of pro forma stockholders'                                                                       
                  equity per share (6) .........................        74.07%           82.78%            90.83%            99.01% 

-----------------------------------------                               
(Footnotes on following page)                                           
(Footnotes from prior page)                                             

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(1)  Does not give effect to the non-recurring expense that will be recognized  
    in 1998 as a result of the establishment of the Charitable Foundation. The
Company will recognize an after-tax expense for the amount of the     
     contribution to the Charitable Foundation which is expected to be $247,000,
$280,000, $313,000 and $350,000 at the minimum, midpoint, maximum and 
   adjusted maximum of the Estimated Valuation Range, respectively. Assuming
    the contribution to the Charitable Foundation was incurred during the year
    ended June 30, 1998, pro forma net income per share would be $0.67, $0.56,
 $0.49 and $0.41 at the minimum, midpoint, maximum and adjusted maximum,
   respectively. Per share net income data is based on 1,531,008, 1,801,185,
    2,071,363 and 2,382,068 shares outstanding, which represents shares issued
    in the Reorganization, shares contributed to the Charitable Foundation and
   shares to be allocated or distributed under the ESOP and Stock Award Plan
for the period presented.                                             

(2)  It is assumed that 8% of the Minority Ownership Interest will be purchased 
     by the ESOP. The funds used to acquire such shares are assumed to have been
borrowed by the ESOP from the Company. The amount to be borrowed is   
    reflected as a reduction of stockholders' equity. The Bank intends to make
annual contributions to the ESOP in an amount at least equal to the   
 principal and interest requirement of the debt. The Bank's total annual
 payment of the ESOP debt is based upon ten equal annual installments of
    principal, with an assumed interest rate at 8.5%. The pro forma net income
    assumes: (i) that the Bank's contribution to the ESOP is equivalent to the
    debt service requirement for the year ended June 30, 1998, and was made at
  the end of the period; (ii) that 5,889, 6,928, 7,968 and 9,163 shares at
the minimum, midpoint, maximum and adjusted maximum of the Estimated  
 Valuation Range, respectively, were committed to be released during the
   year ended June 30, 1998, at an average fair value of $10.00 per share in
     accordance with Statement of Position ("SOP") 93-6; and (iii) only the ESOP
     shares committed to be released were considered outstanding for purposes of
the net income per share calculations. See "Management of the         
 Bank--Executive Compensation--Employee Stock Ownership Plan and Trust."

(3)  Gives effect to the restricted stock plan expected to be adopted by the    
  Company following the Offering. This plan intends to acquire a number of
   shares of Common Stock equal to 4% of the Minority Ownership Interest, or
  29,445, 34,641, 39,838 and 45,813 shares of Common Stock at the minimum,
  midpoint, maximum and adjusted maximum of the Estimated Valuation Range,
     respectively, either through open market purchases, if permissible, or from
 authorized-but-unissued shares of Common Stock or treasury stock of the
  Company, if any. Funds used by the restricted stock plan to purchase the
    shares will be contributed to the plan by the Bank. In calculating the pro
  forma effect of the restricted stock plan, it is assumed that the shares
   were acquired by the restricted stock plan at the beginning of the period
   presented in open market purchases at the Subscription Price and that 20%
    of the amount contributed was an amortized expense during such period. The
 issuance of authorized-but-unissued shares of Common Stock to the Stock
Award Plan instead of open market purchases would dilute the voting   
    interests of existing stockholders by approximately 1.9% and pro forma net
 income per share would be $0.81, $0.70, $0.62 and $0.55 at the minimum,
  midpoint, maximum and adjusted maximum of the Estimated Valuation Range,
     respectively, and pro forma stockholders' equity per share would be $13.26,
 $11.86, $10.82 and $9.92 at the minimum, midpoint, maximum and adjusted
 maximum of the Estimated Valuation Range, respectively. There can be no
  assurance that the actual purchase price of the shares granted under the
restricted stock plan will be equal to the Subscription Price. See    
"Management of the Bank--Executive Compensation--Total Award Plan."   

(4)  No effect has been given to the issuance of additional shares of Common    
Stock pursuant to the Stock Option Plan expected to be adopted by the 
Company following the Offering. Under the Stock Option Plan, an amount
    equal to 10% of the Minority Ownership Interest, or 73,613, 86,604, 99,594
   and 114,533 shares at the minimum, midpoint, maximum and adjusted maximum
     of the Estimated Valuation Range, respectively, will be reserved for future
    issuance upon the exercise of options to be granted under the Stock Option
Plan. The issuance of Common Stock pursuant to the exercise of options
under the Stock Option Plan will result in the dilution of existing   
    stockholders' interests. Assuming all options were exercised at the end of
the period at an exercise price of $10.00 per share, the pro forma net
    income per share would be $0.78, $0.68, $0.60 and $0.53, respectively, and
the pro forma stockholders' equity per share would be $13.35, $11.99, 
 $10.98 and $10.10, respectively. See "Management of the Bank--Executive
Compensation--Stock Option Plan."                                     

(5)  The retained earnings of the Bank will continue to be substantially        
   restricted after the Offering. See "Dividend Policy," "The Reorganization
and Offering--Liquidation Rights" and "Regulation--New York Bank      
Regulation."                                                          

(6)  Stockholders' equity per share data is based upon 1,584,009, 1,863,540,    
  2,143,071 and 2,464,532 shares outstanding representing shares issued in
   the Reorganization, shares purchased by the ESOP and the restricted stock
plan, and shares contributed to the Charitable Foundation.            

(7)  As adjusted to give effect to an increase in the number of shares that     
  could occur due to an increase in the Estimated Valuation Range of up to
 15% as a result of regulatory considerations, demand for the shares, or
  changes in market or general financial and economic conditions following
the commencement of the Offering.                                     

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 COMPARISON OF VALUATION AND PRO FORMA INFORMATION WITH AND WITHOUT FOUNDATION

       In the event that the Charitable Foundation was not
established as part of the Reorganization, FinPro has estimated that the pro    
forma aggregate market capitalization of the Company would be approximately $8.6
million at the midpoint, which is approximately $35,000 less than the pro forma 
aggregate market capitalization of the Company if the Charitable Foundation is  
included, and would result in an approximately $331,000 decrease in the amount  
of Common Stock offered for sale in the Reorganization. The pro forma price to  
book ratio and pro forma price to earnings ratio would be approximately the same
under both the current appraisal and the estimate of the value of the Company   
without the Charitable Foundation. Further, assuming the midpoint of the        
Estimated Valuation Range, pro forma stockholders' equity per share and pro     
forma net income per share would be substantially the same at $12.08 and $11.98,
respectively, and $0.72 and $0.71, respectively, with or without the Charitable 
Foundation. The pro forma price to book ratio and the pro forma price to        
earnings ratio are substantially the same with and without the Charitable       
Foundation at the midpoint at 82.78% and 83.47%, respectively, and 13.89x and   
14.08x, respectively. There is no assurance that in the event the Charitable    
Foundation was not formed that the appraisal prepared at the time would have    
concluded that the pro forma market value of the Company would be the same as   
that estimated herein. Any appraisal prepared at that time would be based on the
facts and circumstances existing at that time, including, among other things,   
market and economic conditions.                                                 

              For comparative purposes only, set forth below are certain
pricing ratios and financial data and ratios, at the minimum, midpoint, maximum 
and adjusted maximum of the Estimated Valuation Range, assuming the             
Reorganization was completed at June 30, 1998. The valuation amounts referred to
in the table below relate to the value of the shares sold to the depositors and 
the public, excluding shares issued to the Mutual Company.                      

                                                        [Enlarge/Download Table]

                                                  Minimum               Midpoint             Maximum            Adjusted Maximum  
                                           --------------------- --------------------- --------------------- ---------------------
                                            With        Without     With     Without      With     Without      With     Without  
                                           Foundation Foundation Foundation Foundation Foundation Foundation Foundation Foundation
                                           ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
                                                                (Dollars in Thousands, Except Per Share Amounts)                  
                                                                                                                                  
Estimated offering amount ................  $  7,050   $ 7,332    $ 8,295    $ 8,626    $ 9,539    $ 9,920    $ 10,970   $ 11,408 
Pro forma market capitalization ..........     7,361     7,332      8,661      8,626      9,960      9,920      11,454     11,408 
Total assets .............................   145,924   146,145    147,035    147,284    148,145    148,422     149,423    149,732 
Total liabilities ........................   124,523   124,523    124,523    124,523    124,523    124,523     124,523    124,523 
Pro forma stockholders' equity ...........    21,400    21,621     22,511     22,760     23,621     23,898      24,899     25,208 
Pro forma net income .....................     1,259     1,271      1,280      1,296      1,303      1,319       1,330      1,348 
Pro forma stockholders' equity per share .     13.50     13.39      12.08      11.98      11.01      10.94       10.10      10.04 
Pro forma net income per share ...........      0.83      0.82       0.72       0.71       0.64       0.63        0.56       0.56 

Pro forma pricing ratios:                                                                                                         
Offering price as a percentage                                                                                                    
  of pro forma stockholders'                                                                                                      
   equity per share.......................     74.07%    74.68%     82.78%     83.47%     90.83%     91.41%      99.01%     99.60%
Offering price to pro forma                                                                                                       
   net income per share (1) ..............     12.05     12.20      13.89      14.08      15.63      15.87       17.86      17.86 
Pro forma market capitalization                                                                                                   
   to assets .............................     10.85     11.05      12.68      12.90      14.47      14.72       16.50      16.78 

Pro forma financial ratios:                                                                                                       
Return on assets .........................      0.86      0.87       0.87       0.88       0.88       0.89        0.89       0.90 

Return on equity .........................      5.88      5.88       5.69       5.69       5.52       5.52        5.34       5.35 
Equity to assets .........................     14.67     14.79      15.31      15.45      15.94      16.10       16.66      16.84 


(1)  If the contribution to the Charitable Foundation had been incurred during  
 the year ended June 30, 1998, pro forma net income per share would have
     been $0.67, $0.56, $0.49 and $0.41, and the offering price to pro forma net
    income per share would have been 14.95x, 17.70x, 20.45x, and 24.22x at the
minimum, midpoint, maximum and adjusted maximum, respectively.        

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 PARTICIPATION BY MANAGEMENT

                 The following table sets forth information regarding intended
Common Stock purchases by each of the trustees and executive officers of the    
Bank and their associates, and by all trustees and executive officers as a      
group. In the event the individual maximum purchase limitation is increased,    
persons subscribing for the maximum amount may increase their purchase order.   
This table excludes shares to be purchased by the ESOP, as well as any Stock    
Award Plan awards or Stock Option Plan grants that may be made no earlier than  
six months after the completion of the Offering. See "Management of the         
Bank--Executive Compensation--Stock Award Plan" and "--Stock Option Plan." The  
trustees and officers of the Bank have indicated their intention to purchase in 
the Offering an aggregate of $1,092,000 of Common Stock, equal to 15.4%, 13.2%, 
11.4%, and 10.0% of the number of shares to be sold in the Offering, at the     
minimum, midpoint, maximum and adjusted maximum of the Estimated Valuation      
Range, respectively.                                                            

                                                        [Enlarge/Download Table]

                                                                    Aggregate   Number      Percent of  
                                                                    Purchase      of      Shares Sold at
Name                                           Position             Price(1)   Shares(1)     Midpoint   
----                                           --------             ---------  ---------  --------------
                                                                                                        
Walter H. Ingalls                        Chairman of the Board     $   10,000     1,000        0.12%    
J. Bruce Whittaker                    President, Chief Executive      100,000    10,000        1.21     
                                         Officer and Director                                           
Bruce P. Egger                       Vice President and Secretary      20,000     2,000        0.24     
Edmund L. Smith, Jr.                 Vice President and Treasurer      40,000     4,000        0.48     
Daniel T. Sager                         Vice President--Lending         5,000       500        0.06     
Richard J. Buck                                 Trustee                50,000     5,000        0.60     
Anthony Camera, Jr.                             Trustee                50,000     5,000        0.60     
David H. Jenkins, DVM                           Trustee               100,000    10,000        1.21     
Raphael Klein                                   Trustee               200,000    20,000        2.42     
Dennis R. O'Grady                               Trustee               200,000    20,000        2.42     
Paul Slutzky                                    Trustee               117,000    11,700        1.41     
Martin C. Smith                                 Trustee               200,000    20,000        2.42     
                                                                   ----------   -------       -----     
All trustees and executive officers                                                                     
as a group (12 persons)                                            $1,092,000   109,200       13.17%    
                                                                   ----------   -------       -----     
                                                                   ----------   -------       -----     

---------------------                                                           
(1) Includes purchases by associates.                                           

 THE REORGANIZATION AND OFFERING

                  The Superintendent has approved the Plan of Reorganization and
the Offering of the Common Stock subject to the approval of the Bank's          
depositors and the satisfaction of certain conditions imposed by the            
Superintendent. However, such approval does not constitute a recommendation or  
endorsement of the Offering or the Plan of Reorganization by the Superintendent.

Description of and Reasons for the Reorganization                               

         The Board of Trustees unanimously adopted the Plan of
Reorganization and the Superintendent has approved the Plan of Reorganization.  
Pursuant to the Plan of Reorganization, the Bank will reorganize into a         
"two-tier" mutual holding company structure. The two-tier structure has two     
levels of holding companies--a "mid-tier" stock holding company and a "top-tier"
mutual holding company. Under the terms of the Plan of Reorganization: (i) the  
Bank will form the Company as a Delaware corporation; (ii) the Bank will form   
the Mutual Company as a New York mutual holding company; (iii) the Bank will    
reorganize into a capital stock form of organization and issue its common stock 
to the Mutual Company; (iv) the Mutual Company will contribute the common stock 
of the Bank to the Company; and (v) the Company will issue shares of Common     
Stock to the public and the Mutual Company. The number of shares of Common Stock
sold to depositors and the public pursuant to this Prospectus will be equal to  
44.5% of the shares issued in the Offering, and the number of shares issued to  
the Mutual Company will be equal to 53.5% of the shares issued in the Offering. 
In addition, the Company will issue 2.0% of the shares to be outstanding to a   
newly established                                                               

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Charitable Foundation.  The two-tier mutual holding company structure is most   
easily understood by considering the following schematic:                       

The Mutual Company                           Public                             
(a New York mutual                        Stockholders                          
holding company)                         (including the                         
                Charitable
                 Foundation)
   53.5% of                                               46.5% of
    the                                                    the
   Common                                                 Common
    Stock                                                  Stock
The Company (a Delaware corporation)                                            
                     100% of the
                    Common Stock
The Bank                                                                        
(a New York stock savings bank)                                                 

                 In adopting the Plan of Reorganization, the Board of Trustees
determined that the Reorganization is in the best interest of the Bank. The     
primary purpose of the Reorganization is to establish a structure that will     
enable the Bank to compete and expand more effectively in the financial services
marketplace, and that will enable the Bank's depositors, employees, management  
and trustees to obtain an equity ownership interest in the Bank. The new        
structure will permit the Company to issue capital stock, which is a source of  
capital not available to a mutual savings bank. Since the Company is not        
offering all of its Common Stock for sale to depositors and the public in the   
Offering (but is issuing a majority of its stock to the Mutual Company), the    
Reorganization will result in less capital raised in comparison to a standard   
mutual-to-stock conversion. The Reorganization, however, will also offer the    
Bank the opportunity to raise additional capital since the stock held by the    
Mutual Company will be available for sale in the future in the event the Mutual 
Company converts to the capital stock form of organization or the Company       
undertakes an incremental stock offering. See "Regulation-Holding Company       
Regulation-Mutual Company Regulation." The Reorganization will also give the    
Company greater flexibility to structure and finance the expansion of its       
operations, including the potential acquisition of other financial institutions,
and to diversify into other financial services. The holding company form of     
organization is expected to provide additional flexibility to diversify the     
Bank's business activities through existing or newly formed subsidiaries, or    
through acquisitions of or mergers with other financial institutions, as well as
other companies. Although management has no current arrangements, understandings
or agreements regarding any such opportunities, the Company will be in a        
position after the Reorganization, subject to regulatory limitations and the    
Company's financial position, to take advantage of any such opportunities that  
may arise. Lastly, the Reorganization will enable the Bank to better manage its 
capital by offering it broader investment opportunities through the holding     
company structure, and by enabling the Company to distribute capital to         
stockholders in the form of dividends. Because only a minority of the Common    
Stock will be offered for sale in the Offering, the Bank's current mutual form  
of ownership and its ability to remain an independent bank and to provide       
community-oriented financial services will be preserved through the mutual      
holding company structure.                                                      

                 The Board of Trustees believes that these advantages outweigh
the potential disadvantages of the mutual holding company structure, which may  
include: (i) the inability of stockholders other than the Mutual Company to     
obtain majority ownership of the Company and the Bank, which may result in the  
perpetuation of the management and board of directors of the Bank and the       
Company; and (ii) that the mutual holding company structure is a relatively new 
form of corporate ownership, and new regulatory policies relating to the mutual 
interest in the Mutual Company that may be adopted from time to time may have an
adverse impact on Minority Stockholders. A majority of the voting stock of the  

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Company will be owned by the Mutual Company, which is a mutual institution that 
will be controlled by the existing Board of Trustees of the Bank. While this    
structure will better permit management to focus on the Company's and the Bank's
long-term business strategy for growth and capital redeployment without         
short-term pressure from stockholders, it will also serve to perpetuate the     
existing management and trustees of the Bank. The Mutual Company will be able to
elect all members of the board of directors of the Company, and will be able to 
control the outcome of all matters presented to the stockholders of the Company 
for resolution by vote, except for certain matters that must be approved by more
than a majority of stockholders of the Company. No assurance can be given that  
the Company will not take action adverse to the interests of the Minority       
Stockholders. For example, the Company could revise the dividend policy or      
defeat a candidate for the board of directors of the Bank or other proposals put
forth by the Minority Stockholders.                                             

              The Reorganization does not preclude the conversion of the
Mutual Company from the mutual to stock form of organization which would be     
effected through a merger of the Mutual Company into the Company or the Bank and
the concurrent sale of the shares held by the Mutual Company in a subscription  
offering. A conversion of the Mutual Company from the mutual to stock form of   
organization is not anticipated for the foreseeable future.                     

                  Following the completion of the Reorganization, all depositors
who had liquidation rights with respect to the Bank as of the effective date of 
the Reorganization will continue to have such rights solely with respect to the 
Mutual Company so long as they continue to hold deposit accounts with the Bank. 
In addition, all persons who become depositors of the Bank subsequent to the    
Reorganization will have such liquidation rights with respect to the Mutual     
Company. Borrowers currently do not have ownership or voting rights in the Bank 
and will not receive ownership or voting rights with respect to the Mutual      
Company.                                                                        

                All insured deposit accounts of the Bank will continue to be
federally insured by the FDIC and the BIF up to the legal maximum limit in the  
same manner as deposit accounts existing in the Bank immediately prior to the   
Reorganization. Upon completion of the Reorganization, the Bank may exercise any
and all powers, rights and privileges of, and shall be subject to all           
limitations applicable to, capital stock savings banks under New York law. As   
long as the Mutual Company is in existence, the Mutual Company will be required 
to own at least 51% of the voting stock of the Company, and the Company will own
100% of the voting stock of the Bank. The Bank and the Company may issue any    
amount of non-voting stock or debt to persons other than the Mutual Company.    

The Offering                                                                    

             The Company is offering shares of Common Stock to persons
other than the Mutual Company. An offering of between 705,039 and 953,877 shares
of the Common Stock (subject to adjustment to up to 1,096,958) pursuant to this 
Prospectus will be conducted concurrently with the Reorganization. The shares of
Common Stock that will be sold in the Offering will constitute no more than     
44.5% of the shares that will be outstanding after the Offering. Following the  
Reorganization and the Offering, the Company also may issue additional Common   
Stock to persons other than the Mutual Company, without prior approval of the   
holders of the Common Stock.                                                    

              The shares of Common Stock are being offered for sale at a
fixed Subscription Price of $10.00 per share in the subscription offering       
pursuant to subscription rights (the "Subscription Offering") in the following  
order of priority to: (i) holders of deposit accounts with a balance of $100 or 
more on June 30, 1997 ("Eligible Account Holders"); (ii) the Bank's             
tax-qualified employee plans, including the ESOP; (iii) depositors whose        
accounts in the Bank totaled $100 or more on September 30, 1998 ("Supplemental  
Eligible Account Holders"); and (iv) employees, officers and trustees of the    
Bank. Concurrently, and subject to the prior rights of holders of subscription  
rights, any shares of Common Stock not subscribed for in the Subscription       
Offering are being offered in the Community Offering at $10.00 per share to     
certain members of the general public, with a preference first given to natural 
persons residing in Greene County, New York (the "Community Offering").         
Subscription rights will expire if not exercised by 12:00 noon, New York time,  
on December 17, 1998 unless extended by the Bank and the Company.               

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Stock Pricing and Number of Shares to be Issued                                 

                The Plan of Reorganization and federal and state regulations
require that the aggregate purchase price of the Common Stock sold in the       
Offering must be based on the appraised pro forma market value of the Common    
Stock, as determined by an independent valuation (the "Independent Valuation"). 
The Bank has retained FinPro to make such valuation and FinPro will receive a   
fee of $25,000 for its services. The Bank and the Company have agreed to        
indemnify FinPro and its employees and affiliates against certain losses        
(including any losses in connection with claims under the federal securities    
laws) arising out of its services as appraiser, except where FinPro's liability 
results from its negligence or bad faith.                                       

                The Independent Valuation was prepared by FinPro in reliance
upon the information contained in this Prospectus, including the Financial      
Statements. FinPro also considered the following factors, among others: the     
present and projected operating results and financial condition of the Bank and 
the economic and demographic conditions in the Bank's existing market area;     
certain historical, financial and other information relating to the Bank; a     
comparative evaluation of the operating and financial statistics of the Bank    
with those of other publicly traded subsidiaries of mutual holding companies;   
the aggregate size of the Offering; the impact of the Reorganization on the     
Bank's stockholders' equity and earnings potential; the proposed dividend policy
of the Company; and the trading market for securities of comparable institutions
and general conditions in the market for such securities.                       

                The Independent Valuation states that as of October 7, 1998,
the estimated pro forma market value of the Common Stock ranged from a minimum  
of $15.8 million to a maximum of $21.4 million, with a midpoint of $18.6 million
(the "Estimated Valuation Range"). The board determined to offer the shares in  
the Offering at the Subscription Price of $10.00 per share, the price most      
commonly used in stock offerings involving mutual-to-stock conversions. Based on
the Estimated Valuation Range and the Subscription Price of $10.00 per share,   
the number of shares of Common Stock that the Company will issue will range from
1,584,009 shares to 2,143,071 shares, with a midpoint of 1,863,540 shares. The  
board determined to offer 44.5% of such shares, or between 705,039 shares and   
953,877 shares with a midpoint of 829,458 shares (the "Offering Range"), to     
depositors and the public pursuant to this Prospectus. In addition, up to 42,066
shares are being issued to the Charitable Foundation as part of the             
Reorganization, which will result in Minority Stockholders owning 46.5% of the  
shares of the Common Stock outstanding at the conclusion of the Reorganization. 
The 53.5% of the shares of the Company's Common Stock that are not sold in the  
Offering or contributed to the Charitable Foundation will be issued to the      
Mutual Company.                                                                 

        The board reviewed the Independent Valuation and, in
particular, considered (i) the Bank's financial condition and results of        
operations for the year ended June 30, 1998, (ii) financial comparisons of the  
Bank in relation to other financial institutions primarily including other      
publicly traded subsidiaries of mutual holding companies, and (iii) stock market
conditions generally and in particular for financial institutions, all of which 
are set forth in the Independent Valuation. The board also reviewed the         
methodology and the assumptions used by FinPro in preparing the Independent     
Valuation. The Estimated Valuation Range may be amended with the approval of the
Superintendent and the FDIC (if required) if necessitated by subsequent         
developments in the financial condition of the Bank or market conditions        
generally.                                                                      

            Following commencement of the Subscription Offering, the
maximum of the Estimated Valuation Range may be increased by up to 15%, to up to
$24.6 million, which will result in a corresponding increase in the maximum of  
the Offering Range to up to 1,096,958 shares to reflect changes in market and   
financial conditions, without the resolicitation of subscribers (in which event 
up to 48,376 shares may be issued to the Charitable Foundation). The minimum of 
the Estimated Valuation Range and the minimum of the Offering Range may not be  
decreased without a resolicitation of subscribers. The Subscription Price of    
$10.00 per share will remain fixed. See "--Limitations upon Purchases of Common 
Stock" as to the method of distribution and allocation of additional shares that
may be issued in the event of an increase in the Offering Range to fill unfilled
orders in the Subscription and Community Offerings.                             

                 The Independent Valuation, however, is not intended, and must
not be construed, as a recommendation of any kind as to the advisability of     
purchasing shares. FinPro did not independently verify the Financial Statements 
and other information provided by the Bank, nor did FinPro value independently  
the assets or                                                                   

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liabilities of the Bank. The Independent Valuation considers the Bank as a going
concern and should not be considered as an indication of the liquidation value  
of the Bank. Moreover, because such valuation is necessarily based upon         
estimates and projections of a number of matters, all of which are subject to   
change from time to time, no assurance can be given that persons purchasing     
shares in the Offering will thereafter be able to sell such shares at prices at 
or above the Subscription Price.                                                

                The Independent Valuation will be updated at the time of the
completion of the Offering. If the update to the Independent Valuation at the   
conclusion of the Offering results in an increase in the maximum of the         
Estimated Valuation Range to more than $24.6 million and a corresponding        
increase in the Offering Range to more than 1,096,958 shares, or a decrease in  
the minimum of the Estimated Valuation Range to less than $15.8 million and a   
corresponding decrease in the Offering Range to fewer than 705,039 shares, then 
the Company, after consulting with the Superintendent and the FDIC, may         
terminate the Plan of Reorganization and return all funds promptly, with        
interest on payments made by check, certified or teller's check, bank draft or  
money order, extend or hold a new Subscription Offering, Community Offering, or 
both, establish a new Offering Range, commence a resolicitation of subscribers  
or take such other actions as permitted by the Superintendent and the FDIC in   
order to complete the Reorganization and the Offering. In the event that a      
resolicitation is commenced, unless an affirmative response is received within  
20 days, all funds will be promptly returned to investors as described above. A 
resolicitation, if any, following the conclusion of the Subscription and        
Community Offerings would not exceed 45 days unless further extended by the     
Superintendent and the FDIC for periods of up to 90 days not to extend beyond 24
months following approval of the Plan of Reorganization by the Superintendent.  
If the minimum number of shares to be sold in the Offering (705,039 shares) is  
not sold by December 17, 1998, the Bank may: (i) terminate the Offering and     
promptly refund all payments for Common Stock, including interest on such       
payments, at the Bank's passbook rate of 3.25%; or (ii) extend the Offering for 
an additional 45 days or, if approved by the Superintendent, for an additional  
period after such 45-day extension.                                             

              An increase in the Independent Valuation and the number of
shares to be issued in the Offering would decrease both a subscriber's ownership
interest and the Company's pro forma earnings and stockholders' equity on a per 
share basis while increasing pro forma earnings and stockholders' equity on an  
aggregate basis. A decrease in the Independent Valuation and the number of      
shares to be issued in the Offering would increase both a subscriber's ownership
interest and the Company's pro forma earnings and stockholders' equity on a per 
share basis while decreasing pro forma net income and stockholders' equity on an
aggregate basis. For a presentation of the effects of such changes, see "Pro    
Forma Data."                                                                    

             Copies of the appraisal report of FinPro and the detailed
memorandum of the appraiser setting forth the method and assumptions for such   
appraisal are available for inspection at each office of the Bank and the other 
locations specified under "Additional Information."                             

                No sale of shares of Common Stock may be consummated unless,
prior to such consummation, FinPro confirms to the Bank and the Superintendent  
that, to the best of its knowledge, nothing of a material nature has occurred   
that, taking into account all relevant factors, would cause FinPro to conclude  
that the Independent Valuation is incompatible with its estimate of the pro     
forma market value of the Common Stock of the Company at the conclusion of the  
Offering. Any change that would result in an aggregate purchase price that is   
below the minimum or above the adjusted maximum of the Estimated Valuation Range
would be subject to the Superintendent's approval. If such confirmation is not  
received, the Bank may extend the Offering, reopen or commence a new offering,  
establish a new Estimated Valuation Range and commence a resolicitation of all  
purchasers with the approval of the Superintendent or take such other actions as
permitted by the Superintendent in order to complete the Offering.              

Purchase Priorities and Method of Offering Shares                               

             The Bank shall have the right, in its sole discretion, to
determine whether prospective purchasers are "residents," "associates," or      
"acting in concert" as defined by the Plan of Reorganization and in interpreting
any and all other provisions of the Plan of Reorganization. All such            
determinations are in the sole discretion of the Bank, and may be based on      
whatever evidence the Bank chooses to use in making any such determination.     

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              Subject to the preceding paragraph and the limitations set
forth in the "--Limitations upon Purchases of Common Stock" section, the        
priorities for the purchase of shares are as follows:                           

               Priority 1: Eligible Account Holders. Each Eligible Account
Holder will be given the opportunity to purchase up to 10,000 shares, or        
$100,000, of Common Stock; provided that the Company may, in its sole discretion
and without further notice to or solicitation of subscribers or other           
prospective purchasers, increase such maximum purchase limitation to up to 5% of
the maximum number of shares issued in the Offering, subject to the overall     
purchase limitation set forth in the section herein titled "Limitations upon    
Purchases of Common Stock." If there are insufficient shares available to       
satisfy all subscriptions of Eligible Account Holders, shares will be allocated 
to Eligible Account Holders so as to permit each subscribing Eligible Account   
Holder to purchase a number of shares sufficient to make his total allocation   
equal to at least the lesser of 100 shares or the number of shares subscribed   
for. Thereafter, unallocated shares will be allocated pro rata to remaining     
subscribing Eligible Account Holders whose subscriptions remain unfilled in the 
same proportion that each subscriber's aggregate deposit account balances as of 
the Eligibility Record Date ("Qualifying Deposits") bears to the total amount of
Qualifying Deposits of all subscribing Eligible Account Holders whose           
subscriptions remain unfilled. Subscription rights to purchase Common Stock     
received by executive officers and trustees of the Bank, including associates of
executive officers and trustees, based on their increased deposits in the Bank  
in the one year preceding the Eligibility Record Date, shall be subordinated to 
the subscription rights of other Eligible Account Holders. To ensure proper     
allocation of stock, each Eligible Account Holder must list on his or her       
subscription order form all deposit accounts in which he or she had an ownership
interest as of the Eligibility Record Date.                                     

               Priority 2: Tax-Qualified Employee Plans. The Tax-Qualified
Employee Plans, including the ESOP and the Bank's Employees' Savings and Profit 
Sharing Plan and Trust, shall be given the opportunity to purchase in the       
aggregate up to 10% of the Minority Ownership Interest. The ESOP intends to     
purchase up to 8% of the Minority Ownership Interest. In the event of an        
oversubscription in the Offering, subscriptions for shares by the Tax-Qualified 
Employee Plans may be satisfied, in whole or in part, through open market       
purchases by the Tax-Qualified Employee Plans subsequent to the closing of the  
Offering.                                                                       

             Priority 3: Supplemental Eligible Account Holders. To the
extent there are sufficient shares remaining after satisfaction of subscriptions
by Eligible Account Holders and the Tax-Qualified Employee Plans, each          
Supplemental Eligible Account Holder will have the opportunity to purchase up to
10,000 shares, or $100,000, of Common Stock; provided that the Company may, in  
its sole discretion and without further notice to or solicitation of subscribers
or other prospective purchasers, increase such maximum purchase limitation to up
to 5% of the maximum number of shares issued in the Offering, subject to the    
overall purchase limitations set forth in the section herein titled "Limitations
upon Purchases of Common Stock." In the event Supplemental Eligible Account     
Holders subscribe for a number of shares which, when added to the shares        
subscribed for by Eligible Account Holders and the Tax-Qualified Employee Plans,
exceed available shares, the shares of Common Stock will be allocated among     
subscribing Supplemental Eligible Account Holders so as to permit each          
subscribing Supplemental Eligible Account Holder to purchase a number of shares 
sufficient to make their total allocation equal to at least the lesser of 100   
shares or the number of shares subscribed for. Thereafter, unallocated shares   
will be allocated to each subscribing Supplemental Eligible Account Holder whose
subscription remains unfilled in the same proportion that such subscriber's     
aggregate deposit account balances as of the Supplemental Eligibility Record    
Date ("Supplemental Qualifying Deposits") bear to the total amount of           
Supplemental Qualifying Deposits of all subscribing Supplemental Eligible       
Account Holders whose subscriptions remain unfilled.                            

               Priority 4: Employees, Officers and Trustees. To the extent
there are sufficient shares remaining after satisfaction of subscriptions by    
Eligible Account Holders, the Tax-Qualified Employee Plans, and Supplemental    
Eligible Account Holders, employees, officers and trustees of the Bank will     
receive, without cost to them, nontransferable subscription rights to subscribe 
for up to 10,000 shares, or $100,000, of the Common Stock; provided, that the   
Company may, in its sole discretion and without further notice to or            
solicitation of subscribers or other prospective purchasers, increase such      
purchase limitation to 5% of the maximum number of shares issued in the         
Offering, subject to the overall purchase limitations set forth in the section  
herein titled "Limitations upon Purchases of Stock." If sufficient shares are   
not available in this priority, shares will be allocated among trustees,        
officers and employees on a pro rata basis based on the size of each person's   
order.                                                                          

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Community Offering                                                              

        Any shares of Common Stock not subscribed for in the
Subscription Offering will be offered for sale in a Community Offering. This    
will involve an offering of all unsubscribed shares directly to the general     
public. The Community Offering, if any, shall be for a period of not more than  
45 days unless extended by the Company and the Bank, and will commence          
concurrently with, during or promptly after the Subscription Offering. The      
Common Stock will be offered and sold in the Community Offering, in accordance  
with FDIC and Department regulations, so as to achieve the widest distribution  
of the Common Stock. No person, by himself or herself, or with an associate or  
group of persons acting in concert, may subscribe for or purchase more than     
10,000 shares of Common Stock offered in the Community Offering. Further, the   
Company may limit total orders in the Community Offering so as to assure that   
the number of shares available for the Syndicated Community Offering may be up  
to a specified percentage of the number of shares of Common Stock. Finally, the 
Company may reserve shares offered in the Community Offering for sales to       
institutional investors.                                                        

         In the event of an oversubscription for shares in the
Community Offering, shares will be allocated (to the extent shares remain       
available) first to natural persons residing in Greene County, New York (the    
"Community").                                                                   

               The terms "residence," "reside," "resided" or "residing" as
used herein with respect to any person shall mean any person who occupied a     
dwelling within the Bank's Community, has an intent to remain within the        
Community for a period of time, and manifests the genuineness of that intent by 
establishing an ongoing physical presence within the Community together with an 
indication that such presence within the Community is something other than      
merely transitory in nature. The Bank may use deposit or loan records or such   
other evidence provided to it to make a determination as to whether a person is 
a resident. In all cases, however, such a determination shall be in the sole    
discretion of the Bank.                                                         

                  The Bank and the Company, in their sole discretion, may reject
orders, in whole or in part, received from any person in the Community Offering.

Syndicated Community Offering                                                   

           Any shares of Common Stock not sold in the Subscription
Offering or in the Community Offering, if any, may be offered for sale to the   
general public by a selling group of broker-dealers in a Syndicated Community   
Offering, subject to terms, conditions and procedures as may be determined by   
the Bank and the Company in a manner that is intended to achieve the widest     
distribution of the Common Stock, subject to the rights of the Company to accept
or reject in whole or in part any order in the Syndicated Community Offering. It
is expected that the Syndicated Community Offering, if any, will begin as soon  
as practicable after termination of the Subscription Offering and the Community 
Offering, if any. The Syndicated Community Offering shall be completed within 45
days after the termination of the Subscription Offering, unless such period is  
extended as provided herein.                                                    

        If for any reason a Syndicated Community Offering of
unsubscribed shares of Common Stock cannot be effected and any shares remain    
unsold after the Subscription Offering and the Community Offering, if any, the  
boards of directors of the Company and the Bank will seek to make other         
arrangements for the sale of the remaining shares. Such other arrangements will 
be subject to the approval of the Department and the FDIC and to compliance with
applicable state and federal securities laws.                                   

Restrictions on Sale of Stock by Trustees and Officers                          

            All shares of the Common Stock purchased by trustees and
officers of the Bank in the Offering will be subject to the restriction that    
such shares may not be sold or otherwise disposed of for value for a period of  
one year following the date of purchase, except for any disposition of such     
shares (i) following the death of the original purchaser or (ii) by reason of an
exchange of securities in connection with a merger or acquisition approved by   
the applicable regulatory authorities. Sales of shares of the Common Stock by   
the Company's directors and officers will also be subject to certain            

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insider trading and other transfer restrictions under the federal securities    
laws. See "Regulation--Federal Securities Laws."                                

             Each certificate for restricted shares will bear a legend
prominently stamped on its face giving notice of the restrictions on transfer,  
and instructions will be issued to the Company's transfer agent to the effect   
that any transfer within such time period of any certificate or record ownership
of such shares other than as provided above is a violation of the restriction.  
Any shares of Common Stock issued pursuant to a stock dividend, stock split or  
otherwise with respect to restricted shares will be subject to the same         
restrictions on sale.                                                           

Restrictions on Agreements or Understandings Regarding Transfer of Common Stock 
to be Purchased in the Offering                                                 

             Prior to the completion of the Offering, no depositor may
transfer or enter into an agreement or understanding to transfer the legal or   
beneficial ownership of the shares of Common Stock to be purchased by such      
person in the Offering. Each depositor who submits an order form will be        
required to certify that the purchase of Common Stock by such person is solely  
for the purchaser's own account and there is no agreement or understanding      
regarding the sale or transfer of such shares. The Bank intends to pursue any   
and all legal and equitable remedies in the event it becomes aware of any such  
agreement or understanding, and will not honor orders reasonably believed by the
Bank to involve such an agreement or understanding.                             

Procedure for Purchasing Shares of Common Stock                                 

                To ensure that each purchaser receives a Prospectus at least
48 hours before the Expiration Date, Prospectuses may not be mailed any later   
than five days prior to such date or be hand delivered any later than two days  
prior to such date. Order Forms may only be distributed with a Prospectus.      

               Expiration Date. The Offering will terminate at 12:00 noon,
New York time on December 17, 1998, unless extended by the Bank for up to an    
additional 45 days (to January 29, 1999) or, if approved by the Superintendent, 
for an additional period after such 45-day extension (as so extended, the       
"Expiration Date"). The Bank is not required to give purchasers notice of any   
extension unless the Expiration Date is later than January 29, 1999, in which   
event purchasers will be "resolicited" (i.e., given the right to increase,      
decrease, confirm, or rescind their orders). Purchasers who fail to respond to  
the resolicitation within 20 days will have their orders rescinded and their    
subscription funds returned promptly. If the minimum number of shares sold in   
the Offering (705,039 shares) is not sold by the Expiration Date, the Bank may  
terminate the Offering and promptly refund all orders for Common Stock. A       
reduction in the number of shares below the minimum of the Estimated Valuation  
Range will not require the approval of depositors or an amendment to the        
Independent Valuation. If the number of shares is reduced below the minimum of  
the Estimated Valuation Range, purchasers will be given an opportunity to       
increase, decrease, or rescind their orders.                                    

              Use of Order Forms. In order to purchase the Common Stock,
each purchaser must complete an Order Form, except for certain persons          
purchasing in the Syndicated Community Offering as more fully described below.  
Any person receiving an Order Form who desires to purchase Common Stock may do  
so by delivering (by mail or in person) to the Bank a properly executed and     
completed Order Form, together with full payment for the shares purchased. The  
Order Form must be received prior to 12:00 noon, New York time on December 17,  
1998. Once tendered, an Order Form cannot be modified or revoked without the    
consent of the Bank. Persons ordering shares are required to represent that they
are purchasing such shares for their own account. The interpretation by the Bank
of the terms and conditions of the Plan of Reorganization and of the            
acceptability of the Order Forms will be final. The Bank is not required to     
accept copies of Order Forms.                                                   

                The Order Form includes a certification in which subscribers
acknowledge (i) that the Common Stock is not a deposit or savings account that  
is federally insured or otherwise guaranteed by the Bank, the Company or the    
federal government and (ii) that the subscribers received a copy of this        
Prospectus describing the nature of the Common Stock and the risks involved in  
an investment in the Common Stock, including the "Risk Factors" described in    
this Prospectus.                                                                

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The certification is required by federal regulation and is intended to ensure   
that subscribers are aware of the Risk Factors before making an investment      
decision. However, signing the Order Form and certification will not result in  
investors waiving their rights under the Securities Act of 1933.                

                  Payment for Shares. Payment for all shares will be required to
accompany all completed Order Forms for the purchase to be valid. Payment for   
shares may be made by (i) cash, check or money order, or (ii) authorization of  
withdrawal from a deposit account maintained with the Bank. Third party checks  
may not be accepted as payment for a subscriber's order. Appropriate means by   
which such withdrawals may be authorized are provided on the Order Forms. Once  
such a withdrawal amount has been authorized, a hold will be placed on such     
funds, making them unavailable to the depositor until the Offering has been     
completed or terminated. In the case of payments authorized to be made through  
withdrawal from deposit accounts, all funds authorized for withdrawal will      
continue to earn interest at the contract rate until the Offering is completed  
or terminated. Interest penalties for early withdrawal applicable to certificate
of deposit accounts will not apply to withdrawals authorized for the purchase of
shares; however, if a withdrawal results in a certificate of deposit account    
with a balance less than the applicable minimum balance requirement, the        
certificate of deposit shall be canceled at the time of withdrawal without      
penalty, and the remaining balance will earn interest at the Bank's passbook    
rate subsequent to the withdrawal. Payments made by check or money order will be
placed in a segregated escrow account and will be paid interest at the Bank's   
passbook rate of 3.25% (calculated using the simple interest method), from the  
date payment is received until the Offering is completed or terminated. Such    
interest will be paid by check, on all funds held, including funds accepted as  
payment for shares of Common Stock, promptly following completion or termination
of the Offering. An executed Order Form, once received by the Bank, may not be  
modified, amended or rescinded without the consent of the Bank, unless the      
Offering is not completed by January 29, 1999, in which event purchasers may be 
given the opportunity to increase, decrease, confirm or rescind their orders for
a specified period of time.                                                     

           Depending on market conditions, the Common Stock may be
offered for sale to the general public on a best efforts basis in a Syndicated  
Community Offering by a selling group of broker-dealers to be managed by        
Friedman, Billings, Ramsey & Co., Inc. In its discretion, Friedman, Billings,   
Ramsey & Co., Inc. will instruct selected broker-dealers as to the number of    
shares to be allocated to each selected broker-dealer. Only upon allocation of  
shares to selected broker-dealers may they take orders from their customers.    
Investors who desire to purchase shares in the Community Offering directly      
through a selected broker-dealer, which may include Friedman, Billings, Ramsey &
Co., Inc., will be advised that the members of the selling group are required   
either: (a) upon receipt of an executed Order Form or direction to execute an   
Order Form on behalf of an investor, to forward the appropriate purchase price  
to the Bank for deposit in a segregated account on or before 12:00 noon,        
prevailing time, of the business day next following such receipt or execution;  
or (b) upon receipt of confirmation by such member of the selling group of an   
investor's interest in purchasing shares, and following a mailing of an         
acknowledgment by such member to such investor on the business day next         
following receipt of confirmation, to debit the account of such investor on the 
fifth business day next following receipt of confirmation and to forward the    
appropriate purchase price to the Bank for deposit in the segregated account on 
or before 12:00 noon, prevailing time, of the business day next following such  
debiting. Payment for any shares purchased pursuant to alternative (a) above    
must be made by check in full payment of the purchase price. Payment for shares 
purchased pursuant to alternative (b) above may be made by wire transfer to the 
Bank.                                                                           

           A depositor interested in using his or her IRA funds to
purchase Common Stock must do so through a self-directed IRA. Since the Bank    
does not offer such accounts, it will allow a depositor to make a trustee-      
to-trustee transfer of the IRA funds to a trustee offering a self-directed IRA  
program with the agreement that such funds will be used to purchase the Common  
Stock in the Offering. There will be no early withdrawal or IRS penalties for   
such transfers. The new trustee would hold the Common Stock in a self-directed  
account in the same manner as the Bank now holds the depositor's IRA funds. An  
annual administrative fee may be payable to the new trustee. Depositors         
interested in using funds in a Bank IRA to purchase Common Stock should contact 
the Stock Center as soon as possible so that the necessary forms may be         
forwarded for execution prior to the Expiration Date.                           

               If the ESOP purchases shares of the Common Stock, such plan
will not be required to pay for such shares until consummation of the Offering. 

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             Delivery of Stock Certificates. Certificates representing
Common Stock issued in the Offering will be mailed by the Bank to the persons   
entitled thereto at the registered address noted on the order form, as soon as  
practicable following consummation of the Offering. Any certificates returned as
undeliverable will be held by the Bank until claimed by persons legally entitled
thereto or otherwise disposed of in accordance with applicable law. Until       
certificates for the Common Stock are available and delivered to purchasers,    
purchasers may not be able to sell the shares of stock which they ordered.      

Plan of Distribution and Selling Commissions                                    

                To assist in the marketing of the Common Stock, the Bank has
retained Friedman, Billings, Ramsey & Co., Inc., a broker-dealer registered with
the National Association of Securities Dealers, Inc. ("NASD"). Friedman,        
Billings, Ramsey & Co., Inc. will assist the Bank in the Offering as follows:   
(i) in training and educating the Bank's employees regarding the mechanics and  
regulatory requirements of the Offering; (ii) in conducting informational       
meetings for employees, customers and the general public; (iii) in coordinating 
the selling efforts in the Bank's local communities; and (iv) in soliciting     
orders for Common Stock. For these services, Friedman, Billings, Ramsey & Co.,  
Inc. will receive a fixed fee of $110,000. If there is a Syndicated Community   
Offering, the fixed fee will be a negotiated percentage of the value of the     
Common Stock sold by Friedman, Billings, Ramsey & Co., Inc. and other NASD      
member firms under selected broker-dealer agreements.                           

                  The Bank also will reimburse Friedman, Billings, Ramsey & Co.,
Inc. for its reasonable out-of-pocket expenses associated with its marketing    
effort, up to a maximum of $40,000 (including legal fees and expenses ). The    
Bank has made an advance payment of $12,500 to Friedman, Billings, Ramsey & Co.,
Inc. If the Plan of Reorganization is terminated by the Bank, if the Offering is
not completed by January 29, 1999, or if Friedman, Billings, Ramsey & Co., Inc. 
terminates its agreement with the Bank in accordance with the provisions of the 
agreement, Friedman, Billings, Ramsey & Co., Inc. will only receive             
reimbursement of its reasonable out-of-pocket expenses. The Bank will indemnify 
Friedman, Billings, Ramsey & Co., Inc. against liabilities and expenses         
(including legal fees) incurred in connection with certain claims or litigation 
arising out of or based upon untrue statements or omissions contained in the    
offering material for the Common Stock, including liabilities under the         
Securities Act of 1933.                                                         

                  Trustees and executive officers of the Bank may participate in
the solicitation of offers to purchase Common Stock. Other trained employees of 
the Bank may participate in the Offering in ministerial capacities, providing   
clerical work in effecting a sales transaction or answering questions of a      
ministerial nature. Other questions of prospective purchasers will be directed  
to executive officers or registered representatives. The Bank will rely on Rule 
3a4-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),  
so as to permit officers, trustees, and employees to participate in the sale of 
the Common Stock. No officer, trustee, or employee of the Bank will be          
compensated for his participation by the payment of commissions or other        
remuneration based either directly or indirectly on the transactions in the     
Common Stock.                                                                   

                A Stock Center will be established at a location adjacent to
the Bank's main office. Employees will inform prospective purchasers to direct  
their questions to the Stock Center and will provide such persons with the      
telephone number of the Stock Center.                                           

Limitations upon Purchases of Common Stock                                      

               The following additional limitations have been imposed upon
purchases of shares of Common Stock. Defined terms used in this section and not 
otherwise defined in this Prospectus shall have the meaning set forth in the    
Plan of Reorganization.                                                         

          A.   The aggregate amount of outstanding Common Stock of the
                Company owned or controlled by persons other than Mutual
                    Company at the close of the Offering shall not exceed 49% of
     the Company's total outstanding Common Stock.

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            B.   No person or group of persons acting in concert, together
                    with their associates, may purchase more than 20,000 shares,
                  or $200,000, of Common Stock in the Offering, except that:
               (i) the Company may, in its sole discretion and without
                 further notice to or solicitation of subscribers or other
              prospective purchasers, increase such maximum purchase
                  limitation to up to 5% of the number of shares sold in the
                   Offering; (ii) Tax-Qualified Employee Plans may purchase up
                to 10% of the shares sold in the Offering; and (iii) for
            purposes of this paragraph, shares to be held by any
                Tax-Qualified Employee Plan and attributable to a person
                    shall not be aggregated with other shares purchased directly
    by or otherwise attributable to such person.

       C.   The aggregate amount of Common Stock acquired in the
                Offering by all management persons and their associates,
              exclusive of any stock acquired by such persons in the
                 secondary market, shall not exceed 25% of the outstanding
                   shares of Common Stock of the Company held by persons other
                than the Mutual Company at the close of the Offering. In
                   calculating the number of shares held by management persons
                 and their associates under this paragraph, shares held by
      any Tax-Qualified Employee Benefit Plan or any
                    Non-Tax-Qualified Employee Benefit Plan of the Bank that are
          attributable to such persons shall not be counted.

     D.   Notwithstanding any other provision of the Plan of
                   Reorganization, no person shall be entitled to purchase any
                 Common Stock to the extent such purchase would be illegal
                 under any federal law or state law or regulation or would
                   violate regulations or policies of the National Association
                 of Securities Dealers, Inc., particularly those regarding
                  free riding and withholding. The Company and/or its agents
                  may ask for an acceptable legal opinion from any purchaser
                   as to the legality of such purchase and may refuse to honor
                   any purchase order if such opinion is not timely furnished.

             E.   The Board of Directors of the Company has the right in its
                 sole discretion to reject any order submitted by a person
                   whose representations the Board of Directors believes to be
                  false or who it otherwise believes, either alone or acting
               in concert with others, is violating, circumventing, or
             intends to violate, evade or circumvent the terms and
 conditions of the Plan of Reorganization.

              F.   The Company will make reasonable efforts to comply with the
                   securities laws of all states in the United States in which
                  persons entitled to subscribe for Common Stock pursuant to
                   the Plan of Reorganization reside. However, the Company and
              the Bank are not required to offer Common Stock to any
person who resides in a foreign country.

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Establishment of the Charitable Foundation                                      

     General. In furtherance of the Bank's commitment to the communities
that it serves, the Bank intends to establish a Charitable Foundation in        
connection with the Reorganization. The Plan of Reorganization provides that the
Bank and the Company may establish the Charitable Foundation, which will be     
incorporated under Delaware law as a non-stock corporation and will be funded   
with cash and shares of Common Stock contributed by the Company. The Bank will  
contribute to the Charitable Foundation 2.0% of the shares of Common Stock to be
issued in the Reorganization or 31,092, 36,579, 42,066 and 48,376 shares,       
respectively, at the minimum, midpoint, maximum and adjusted maximum of the     
Offering Range and $100,000 in cash. The contribution of Common Stock to the    
Charitable Foundation will be dilutive to the interests of stockholders and will
have an adverse impact on the reported earnings of the Company in the year in   
which the Charitable Foundation is established.                                 

     Purpose of the Charitable Foundation. The purpose of the Charitable
Foundation is to provide funding to support charitable causes and community     
development activities. Historically, the Bank has emphasized community lending 
and development activities within the communities that it services, and the     
Charitable Foundation is being formed as a complement to the Bank's existing    
community activities. Management believes the establishment of a Charitable     
Foundation is consistent with the Bank's commitment to community service.       
Funding of the Charitable Foundation with Common Stock of the Company also may  
be a means of enabling the communities served by the Bank to share in the growth
and success of the Company. The Charitable Foundation will also enable the      
Company and the Bank to develop a unified charitable donation strategy and will 
centralize the responsibility for administration and allocation of corporate    
charitable funds. Charitable foundations have been formed by other financial    
institutions for this purpose, among others. The contribution to the Charitable 
Foundation will not take the place of the Bank's traditional community lending  
activities.                                                                     

        Structure of the Charitable Foundation. The Charitable Foundation will
be incorporated under Delaware law as a non-stock corporation. Pursuant to the  
Charitable Foundation's Bylaws, the Charitable Foundation's initial board of    
directors will consist of persons who are existing directors and officers of the
Company. Subsequent to the Reorganization, other individuals may be appointed to
the Board, including individuals not affiliated with the Bank or the Company.   
The members of the Charitable Foundation, who are comprised of its board        
members, will elect the directors at the annual meeting of the Charitable       
Foundation from those nominated by the nominating committee. Only persons       
serving as directors of the Charitable Foundation qualify as members of the     
Charitable Foundation, with voting authority. Directors will be divided into    
three classes with each class appointed for three-year terms. The certificate of
incorporation of the Charitable Foundation provides that the corporation is     
organized exclusively for charitable purposes, including community development, 
as set forth in Section 501(c)(3) of the Internal Revenue Code of 1986 (the     
"Code"). The Charitable Foundation's certificate of incorporation further       
provides that no part of the net earnings of the Charitable Foundation will     
inure to the benefit of, or be distributable to, its directors, officers or     
members.                                                                        

    The authority for the affairs of the Charitable Foundation will be
vested in its board of directors which will be responsible for establishing the 
policies of the Charitable Foundation with respect to grants or donations       
consistent with the purpose for which the Charitable Foundation was established.
Although no formal policy governing Charitable Foundation grants exists at this 
time, the Charitable Foundation's board of directors will adopt such a policy   
upon establishment of the Charitable Foundation. As directors of a nonprofit    
corporation, directors of the Charitable Foundation will at all times be bound  
by their fiduciary duty to advance the Charitable Foundation's charitable goals,
to protect the assets of the Charitable Foundation and to act in a manner       
consistent with the charitable purpose for which the Charitable Foundation is   
established. The directors of the Charitable Foundation also will be responsible
for directing the activities and managing the assets of the Charitable          
Foundation. However, as a condition to issuing their non-objection to the       
Reorganization, the FDIC and the Department have required the Charitable        
Foundation to commit that all shares of Common Stock held by the Charitable     
Foundation will be voted in the same ratio as all other shares of the Company's 
Common Stock (other than shares held by the Mutual Company) on all proposals    
considered by stockholders of the Company; provided, however, that, consistent  
with such condition, the FDIC and the Department would waive this voting        
restriction under certain circumstances (and subject to certain additional      
conditions) if compliance with the voting restriction would: (i) cause a        
violation of Delaware law; (ii) cause the Charitable Foundation to lose its     
tax-exempt status, or cause the Internal Revenue Service (the "IRS") to deny the
Charitable Foundation's                                                         

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request for a determination that it is an exempt organization or otherwise have 
a material and adverse tax consequence on the Charitable Foundation; or (iii)   
cause the Charitable Foundation to be subject to an excise tax under Section    
4941 of the Code. In order for the FDIC and the Department to waive such voting 
restriction, the Company's or the Charitable Foundation's legal counsel would be
required to render an opinion satisfactory to the FDIC and the Department that  
compliance with the voting requirement would have the effect described in       
clauses (i), (ii) or (iii) above. Under those circumstances, the FDIC and the   
Department would grant waivers of the voting restriction upon submission of such
legal opinion(s) by the Company or the Charitable Foundation that are           
satisfactory to the FDIC and the Department. In the event that the FDIC and the 
Department were to waive the voting requirement, the directors would direct the 
voting of the Common Stock held by the Charitable Foundation.                   

      The Charitable Foundation's place of business will be located at the
Bank's administrative offices and initially the Charitable Foundation is        
expected to have no employees but will utilize the members of the staff of the  
Company or the Bank. The board of directors of the Charitable Foundation will   
appoint such officers as may be necessary to manage the operation of the        
Charitable Foundation. In this regard, it is expected that the Bank will be     
required to provide the FDIC with a commitment that, to the extent applicable,  
the Bank will comply with the affiliate restrictions set forth in Sections 23A  
and 23B of the Federal Reserve Act with respect to any transactions between the 
Bank and the Charitable Foundation.                                             

        Under Section 501(c)(3) of the Code, the Charitable Foundation will be
required to distribute annually in grants or donations, a minimum of 5% of the  
average fair market value of its net investment assets. One of the conditions   
imposed on the gift of Common Stock by the Company is that the amount of Common 
Stock that may be sold by the Charitable Foundation in any one year shall not   
exceed 5% of the average market value of the assets held by the Charitable      
Foundation, except where the board of directors of the Charitable Foundation    
determines that the failure to sell an amount of Common Stock greater than such 
amount would result in a longer-term reduction of the value of the Charitable   
Foundation's assets and as such would jeopardize the Charitable Foundation's    
capacity to carry out its charitable purposes. Upon completion of the           
Reorganization and the contribution of shares to the Charitable Foundation, the 
Company would have 1,584,009, 1,863,540 and 2,143,071 shares issued and         
outstanding at the minimum, midpoint and maximum of the Estimated Valuation     
Range. Because the Company will have an increased number of shares outstanding, 
the voting and ownership interests of stockholders in the Company's Common Stock
would be diluted by 2.0%, as compared to their interests in the Company if the  
Charitable Foundation was not established. For additional discussion of the     
dilutive effect, see "Pro Forma Data."                                          

      Impact on Earnings. The contribution of cash and Common Stock to the
Charitable Foundation will have an adverse impact on the Company's and the      
Bank's earnings in the year in which the contribution is made. The Company will 
recognize the full expense in the amount of the contribution of cash and Common 
Stock to the Charitable Foundation in the quarter in which it occurs, which is  
expected to be the quarter ending December 31, 1998. The aggregate amount of the
contribution will range from $410,920 to $520,660, based on the minimum and     
maximum of the Estimated Valuation Range, respectively (or up to $583,760 at the
adjusted maximum of the Estimated Valuation Range). The number of shares to be  
contributed to the Charitable Foundation will range from 31,092 to 42,066, and  
the amount of cash to be contributed will be fixed at $100,000. The contribution
expense will be partially offset by the tax benefit related to the expense. The 
Company and the Bank have been advised by their independent tax advisors that   
the contribution to the Charitable Foundation will be tax deductible, subject to
an annual limitation based on 10% of the Company's annual taxable income.       
Assuming an aggregate contribution of $520,660 (based on the maximum of the     
Estimated Valuation Range), the Company estimates a net tax-effected expense of 
$312,400 (based upon a 40% tax rate). Management cannot predict earnings for the
fiscal year ending June 30, 1999, but expects that the establishment and funding
of the Charitable Foundation will have an adverse impact on the Company's       
earnings for the year. In addition to the contribution to the Charitable        
Foundation, the Bank or the Mutual Company may continue making grants and       
contributions to the community that would not be permitted for the Charitable   
Foundation.                                                                     

         Tax Considerations. The Company and the Bank have been advised by their
independent tax advisors that an organization created for the above purposes    
would qualify as a Section 501(c)(3) exempt organization under the Code, and    
would be classified as a private charitable foundation. The Charitable          
Foundation will submit a request to the IRS to be recognized as an exempt       
organization. The Company and the Bank have received an opinion of their        
independent                                                                     

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tax advisors that the Charitable Foundation would qualify as a Section 501(c)(3)
exempt organization under the Code, except that such opinion does not consider  
the impact of the condition to be agreed to by the Charitable Foundation that   
Common Stock issued to the Charitable Foundation be voted in the same ratio as  
all other shares of the Company's Common Stock (other than shares held by the   
Mutual Company) on all proposals considered by stockholders of the Company.     
Consistent with this condition, in the event that the Company or the Charitable 
Foundation receives an opinion of their legal counsel that compliance with the  
voting restriction would have the effect of causing the Charitable Foundation to
lose its tax-exempt status, or otherwise have a material and adverse tax        
consequence on the Charitable Foundation or subject the Charitable Foundation to
an excise tax under Section 4941 of the Code, the FDIC and the Superintendent   
would waive such voting restriction upon submission of a legal opinion by the   
Company or the Charitable Foundation that is satisfactory to them. The          
independent tax advisors' opinion further provides that there is substantial    
authority for the position that the Company's contribution of its own stock to  
the Charitable Foundation would not constitute an act of self-dealing, and that 
the Company would be entitled to a deduction in the amount of the fair market   
value of the stock at the time of the contribution less the nominal par value   
that the Charitable Foundation is required to pay to the Company for such stock,
subject to an annual limitation based on 10% of the Company's annual taxable    
income. The Company, however, would be able to carry forward any unused portion 
of the deduction for five years following the contribution. Assuming the sale of
Common Stock at the adjusted maximum of the Estimated Valuation Range, the      
Company estimates that all of the deduction should be deductible over the       
six-year period. Although the Company and the Bank have received an opinion of  
their independent tax advisors that the Company will be entitled to the         
deduction for the charitable contribution, there can be no assurances that the  
IRS will recognize the Charitable Foundation as a Section 501(c)(3) exempt      
organization or that the deduction will be permitted. In such event, the        
Company's tax benefit related to the Charitable Foundation would have to be     
fully expensed, resulting in a further reduction in earnings in the year in     
which the IRS makes such a determination.                                       

      As a private Charitable Foundation, earnings and gains, if any, from
the sale of Common Stock or other assets are generally exempt from federal and  
state corporate income taxation. However, investment income, such as interest,  
dividends and capital gains, of a private Charitable Foundation will generally  
be subject to a federal excise tax of 2.0%. The Charitable Foundation will be   
required to make an annual filing with the IRS within four and one-half months  
after the close of the Charitable Foundation's fiscal year to maintain its      
tax-exempt status. The Charitable Foundation will be required to publish a      
notice that the annual information return will be available for public          
inspection for a period of 180 days after the date of such public notice. The   
information return for a private charitable foundation must include, among other
things, an itemized list of all grants made or approved, showing the amount of  
each grant, the recipient, any relationship between a grant recipient and the   
Charitable Foundation's managers and a concise statement of the purpose of each 
grant. The Charitable Foundation will also be required to file an annual report 
with the Charities Bureau of the Office of the Attorney General of the State of 
New York.                                                                       

   Comparison of Valuation and Other Factors Assuming the Charitable
Foundation is Not Established as Part of the Reorganization. The establishment  
of the Charitable Foundation was taken into account by FinPro in determining the
estimated pro forma market value of the Common Stock of the Company. The        
aggregate price of the shares of Common Stock being offered in the Offering is  
based upon the independent appraisal conducted by FinPro of the estimated pro   
forma market value of the Common Stock of the Company. The pro forma aggregate  
price of the Common Stock being offered for sale in the Reorganization is       
currently estimated to be between $7.1 million and $9.5 million, with a midpoint
of $8.3 million. The pro forma price to book ratio and the pro forma price to   
earnings ratio, at and for the year ended June 30, 1998, are 82.78% and 13.89x, 
respectively, at the midpoint of the Estimated Valuation Range. In the event    
that the Reorganization did not include the Charitable Foundation, FinPro has   
estimated that the estimated pro forma market value of the Common Stock being   
offered for sale in the Offering would be $10.0 million at the midpoint based on
a pro forma price to book ratio and a pro forma price to earnings ratio of      
83.47% and 14.08x, respectively. The amount of Common Stock being offered for   
sale in the Offering at the midpoint of the Estimated Valuation Range is 36,579 
less than the estimated amount of Common Stock that would be sold in the        
Offering without the Charitable Foundation based on the estimate provided by    
FinPro. Accordingly, certain account holders of the Bank who subscribe to       
purchase Common Stock in the Subscription Offering would receive fewer shares   
depending on the size of a depositor's stock order and the amount of his or her 
qualifying deposits in the Bank and the overall level of subscriptions. See     
"Comparison of Valuation and Pro Forma Information without Foundation." This    
estimate by FinPro                                                              

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was prepared solely for purposes of providing subscribers with information with 
which to make an informed decision on the Reorganization.                       

         The decrease in the amount of Common Stock being offered as a result of
the contribution of Common Stock to the Charitable Foundation will not have a   
significant effect on the Company or the Bank's capital position. The Bank's    
regulatory capital is significantly in excess of its regulatory capital         
requirements and will further exceed such requirements following the            
Reorganization. The Bank's leverage and risk-based capital ratios at June 30,   
1998 were 11.09% and 20.32%, respectively. Assuming the sale of shares at the   
midpoint of the Estimated Valuation Range, the Bank's pro forma leverage and    
risk-based capital ratios at June 30, 1998 would be 12.82% and 23.53%,          
respectively. On a consolidated basis, the Company's pro forma stockholders'    
equity would be $22.5 million, or approximately 15.3% of pro forma consolidated 
assets, assuming the sale of shares at the midpoint of the Offering Range. Pro  
forma stockholders' equity per share and pro forma net income per share would be
$12.08 and $0.72, respectively. If the Charitable Foundation was not being      
established in the Reorganization, based on the FinPro estimate, the Company's  
pro forma stockholders' equity would be approximately $22.8 million, or         
approximately 15.5% of pro forma consolidated assets at the midpoint of the     
Estimated Valuation Range, and pro forma stockholder's equity per share and pro 
forma net income per share would be substantially similar with or without the   
Charitable Foundation. See "Comparison of Valuation and Pro Forma Information   
without Foundation."                                                            

Regulatory Conditions Imposed on the Charitable Foundation.   
Establishment of the Charitable Foundation is subject to certain conditions     
agreed to by the Charitable Foundation in writing as a condition to receiving   
the FDIC's non-objection to and Superintendent's approval of the Reorganization,
including the following: (i) the Charitable Foundation will be subject to       
examination by the FDIC and the Department; (ii) the Charitable Foundation must 
comply with supervisory directives imposed by the FDIC and the Department; (iii)
the Charitable Foundation will operate in accordance with written policies      
adopted by the board of directors, including a conflict of interest policy; and 
(iv) any shares of Common Stock held by the Charitable Foundation must be voted 
in the same ratio as all other outstanding shares of Common Stock (other than   
shares held by the Mutual Company) on all proposals considered by stockholders  
of the Company; provided, however, that, consistent with the condition, the FDIC
and the Department would waive this voting restriction under certain            
circumstances (and subject to additional conditions) if compliance with the     
voting restriction would: (a) cause a violation of the law of the State of      
Delaware; (b) would cause the Charitable Foundation to lose its tax-exempt      
status or otherwise have a material and adverse tax consequence on the          
Charitable Foundation; or (c) would cause the Charitable Foundation to be       
subject to an excise tax under Section 4941 of the Code. In order to obtain a   
waiver, the Charitable Foundation's legal counsel would be required to render an
opinion satisfactory to the FDIC and the Department. There can be no assurances 
that a legal opinion addressing these issues could be rendered, or if rendered, 
that the FDIC and the Department would grant unconditional waivers of the voting
restriction. In no event would the voting restriction survive the sale of shares
of the Common Stock held by the Charitable Foundation.                          

     Potential Challenges. The establishment and funding of a Charitable
Foundation as part of a conversion of a mutual savings institution to stock form
has only recently occurred. As such, the Charitable Foundation, and the         
Superintendent's approval of the Reorganization and the FDIC's nonobjection to  
the Reorganization, may be subject to potential challenges notwithstanding that 
the board of directors of the Company and the board of trustees of the Bank have
considered the various factors involved in the establishment of the Charitable  
Foundation in reaching their determination to establish the Charitable          
Foundation as part of the Reorganization. If challenges were to be instituted   
seeking to prevent the Bank from establishing the Charitable Foundation in      
connection with the Reorganization, no assurances could be made that the        
resolution of such challenges would not result in a delay in the consummation of
the Reorganization or that any objecting persons would not be ultimately        
successful in obtaining such removal or other relief against the Company or the 
Bank. Additionally, if the Company and the Bank are forced to eliminate the     
Charitable Foundation, the Company may be required to resolicit subscribers in  
the Offering.                                                                   

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Liquidation Rights                                                              

    In the unlikely event of a complete liquidation of the Bank in its
present mutual form, each depositor would have a claim to receive his or her pro
rata share of any assets of the Bank remaining after payment of claims of all   
creditors (including the claims of all depositors to the withdrawal value of    
their accounts). To the extent there are remaining assets, a depositor may have 
a claim to receive a pro rata share of the remaining assets in the same         
proportion as the value of such depositor's deposit accounts to the total value 
of all deposit accounts in the Bank at the time of liquidation, subject to the  
right of the State of New York to garnish such assets. After the Reorganization,
each depositor, in the event of a complete liquidation, would have a claim as a 
creditor of the Bank. However, except as described below, this claim would be   
solely in the amount of the balance in the deposit account plus accrued         
interest. A depositor would not have an interest in the value or assets of the  
Bank above that amount.                                                         

     The Plan of Reorganization provides for the establishment, upon the
completion of the Reorganization, of a special "liquidation account" for the    
benefit of Eligible Account Holders and Supplemental Eligible Account Holders in
an amount equal to the surplus and reserves of the Bank as of the date of its   
latest balance sheet contained in the final Prospectus used in connection with  
the Reorganization. Each Eligible Account Holder and Supplemental Eligible      
Account Holder, who continues to maintain a deposit account at the Bank, would, 
on a complete liquidation of the Bank, have a claim to an interest in the       
liquidation account after payment of all creditors but prior to any payment to  
the stockholders of the Bank. Each Eligible Account Holder and Supplemental     
Eligible Account Holder would have an initial interest in such liquidation      
account for each deposit account, with a balance of $100 or more held in the    
Bank on June 30, 1997 and September 30, 1998, respectively ("Deposit Account"). 
Each Eligible Account Holder and Supplemental Eligible Account Holder will have 
a claim to a pro rata interest in the total liquidation account for each of his 
or her Deposit Accounts based on the proportion that the balance of each such   
Deposit Account on June 30, 1997 and September 30, 1998, respectively, bore to  
the balance of all Deposit Accounts in the Bank on such date.                   

        If, however, on the last day of any fiscal year of the Bank commencing
after the Eligibility Record Date or Supplemental Eligibility Record Date, as   
the case may be, the deposit balance in any Deposit Account of an Eligible      
Account Holder or Supplemental Eligible Account Holder is less than either (i)  
the amount of qualifying deposits of such Eligible Account Holder or            
Supplemental Eligible Account Holder on the Eligibility Record Date or          
Supplemental Eligibility Record Date, as the case may be, or (ii) the deposit   
balance in such Deposit Account at the close of business on the last day of any 
previous fiscal year of the Bank commencing after the Eligibility Record Date or
the Supplemental Eligibility Record Date, then such Eligible Account Holder's or
Supplemental Eligible Account Holder's account balance would be reduced in an   
amount equal to the reduction in such deposit balance, and such account balance 
will cease to exist if such Deposit Account is closed. In addition, no interest 
in the liquidation account would ever be increased despite any subsequent       
increase in the deposit balances of any Eligible Account Holder or Supplemental 
Eligible Account Holder. Any assets remaining after the above liquidation rights
of Eligible Account Holders and Subsequent Eligible Account Holders are         
satisfied would be distributed to the stockholders of the Bank.                 

       Neither the Bank nor the Company shall be required to set aside funds
for the purpose of establishing the liquidation account, and the creation and   
maintenance of the account will not operate to restrict the use or application  
of any of the net worth accounts of the Bank, except that neither the Bank nor  
the Company shall declare or pay a cash dividend on, or repurchase any of, its  
capital stock if the effect would cause its net worth to be reduced below the   
amount required for the liquidation account.                                    

Federal and State Tax Consequences of the Reorganization                        

        The Bank intends to proceed with the Reorganization on the basis of an
opinion from its special counsel, Luse Lehman Gorman Pomerenk & Schick, P.C.,   
Washington, D.C., as to certain tax matters that are material to the            
Reorganization. The opinion is based, among other things, on certain factual    
representations made by the Bank, including the representation that the exercise
price of the subscription rights to purchase the Common Stock will be           
approximately equal to the fair market value of the stock at the time of the    
completion of the Reorganization. With respect to the subscription rights, the  
Bank has received an opinion of FinPro which, based on certain assumptions,     
concludes that the subscription rights to be received by Eligible Account       
Holders and Supplemental Eligible Account                                       

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Holders and employees, officers and trustees do not have any economic value at  
the time of distribution or the time the subscription rights are exercised,     
whether or not a Community Offering takes place, and Luse Lehman Gorman Pomerenk
& Schick, P.C.'s opinion is given in reliance thereon. The opinion of Luse      
Lehman Gorman Pomerenk & Schick, P.C., provides substantially as follows:       

         1. The change in form from a mutual savings bank (the "Mutual Bank") to
a stock savings bank (the "Stock Bank") will qualify as a     
       reorganization under Section 368(a)(1)(F) of the Code, and no gain or
        loss will be recognized by the Bank in either its mutual form or stock
form by reason of the Reorganization.                         

   2. No gain or loss will be recognized by the Mutual Bank upon the
  transfer of the Mutual Bank's assets to the Stock Bank solely in
         exchange for shares of Stock Bank stock and the assumption by the Stock
Bank of the liabilities of the Mutual Bank.                   

         3. No gain or loss will be recognized by Stock Bank upon the receipt of
    the assets of the Mutual Bank in exchange for shares of Stock Bank
common stock.                                                 

       4. Stock Bank's holding period in the assets received from the Mutual
        Bank will include the period during which such assets were held by the
Mutual Bank.                                                  

         5. Stock Bank's basis in the assets of the Mutual Bank will be the same
         as the basis of such assets in the hands of the Mutual Bank immediately
prior to the Reorganization.                                  

         6. The Stock Bank will succeed to and take into account the Mutual Bank
         earnings and profits or deficit in earnings and profits, as of the date
of the Reorganization.                                        

       7. The Stock Bank depositors will recognize no gain or loss solely by
reason of the Reorganization.                                 

        8. The Mutual Company and Minority Stockholders will recognize no gain
       or loss upon the transfer of Stock Bank stock and cash, respectively,
to the Company in exchange for Common Stock.                  

         9. The Company will recognize no gain or loss upon its receipt of Stock
        Bank stock and cash from the Mutual Company and Minority Stockholders,
respectively, in exchange for Common Stock.                   

        10. The basis of the Common Stock to Minority Stockholders will be the
        Subscription Price and a shareholder's holding period for Common Stock
        acquired through the exercise of subscription rights will begin on the
date the rights are exercised.                                

     The opinion of Luse Lehman Gorman Pomerenk & Schick, P.C., unlike a
letter ruling issued by the IRS, is not binding on the IRS and the conclusions  
expressed therein may be challenged at a future date. The IRS has issued        
favorable rulings for transactions substantially similar to the proposed        
Reorganization, but any such ruling may not be cited as precedent by any        
taxpayer other than the taxpayer to whom the ruling is addressed. The Bank does 
not plan to apply for a letter ruling concerning the Reorganization.            

         The Bank has received an opinion from PricewaterhouseCoopers LLP to the
effect that, for New York State tax purposes, the New York State franchise tax  
and the New York State personal income tax consequences of the Reorganization   
are consistent with those described in the federal tax opinion letter. Both     
taxes adopt federal definitions of taxable income, and contain no express       
modification that would treat the subject transaction differently for state     
purposes. Accordingly, there is complete conformity between the federal income  
tax results of the Reorganization and the corresponding New York State tax      
treatment.                                                                      

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GREENE COUNTY SAVINGS BANK
STATEMENTS OF INCOME

         The following Statements of Income of the Bank for each of the years in
the two-year period ended June 30, 1998 have been audited by                    
PricewaterhouseCoopers, LLP, independent certified public accountants, whose    
report thereon appears elsewhere in this Prospectus. These statements should be 
read in conjunction with the Financial Statements and Notes thereto and         
Management's Discussion and Analysis of Financial Condition and Results of      
Operations included elsewhere in this Prospectus.                               

                                                        [Enlarge/Download Table]


                                                                              Years Ended June 30,      
                                                                               1998             1997    
                                                                          -----------         ------    
                                                                                                        
Interest income:                                                                                        
   Interest on loans................................................... $    6,367,282    $   6,175,215 
   Interest and dividends on investments:                                                               
     U.S. Treasury.....................................................       985,130           962,932 
     U.S. Government agencies..........................................       856,073           687,250 
     State and political subdivisions..................................       341,222           362,490 
     Corporation debt securities.......................................       405,225           456,676 
     Mortgage-backed securities........................................       110,488            69,863 
     Other securities..................................................        17,724            23,441 
   Federal funds sold..................................................       393,310           536,826 
   Other interest income...............................................        26,902            22,815 
                                                                        -------------      -------------
     Total interest income.............................................     9,503,356         9,297,316 
                                                                        -------------      -------------

Interest expense:                                                                                       
   Interest on deposits................................................      4,967,487        4,779,678 
       Net interest income.............................................      4,535,869        4,517,638 
                                                                        -------------      -------------
Less: provision for loan losses........................................       120,000           125,000 
                                                                        -------------      -------------
Net interest income after provision for loan losses                         4,415,869         4,392,638 

Noninterest income:                                                                                     
   Service charges on deposit accounts.................................       251,188           230,442 
   Other operating income..............................................       185,479           289,968 
                                                                        -------------      -------------
     Total other income................................................       436,667           520,410 
                                                                        -------------      -------------

Noninterest expense:                                                                                    
   Salaries and employee benefits......................................     1,571,650         1,491,651 
   Occupancy expense, net..............................................       208,381           157,190 
   Equipment and furniture expense.....................................       185,476           163,845 
   Other...............................................................     1,183,752           960,563 
                                                                        -------------      -------------
     Total other expenses..............................................      3,149,259        2,773,249 
                                                                        -------------      -------------
       Income before provision for taxes...............................      1,703,277        2,139,799 

Provision for income taxes :                                                                            
   Current.............................................................       565,609           720,287 
   Deferred............................................................       (12,248)          (28,625)
                                                                        -------------      -------------
     Total provision for income taxes..................................       553,361           691,662 
                                                                        -------------      -------------
       Net income...................................................... $   1,149,916      $  1,448,137 
                                                                        -------------      -------------
                                                                        -------------      -------------

See notes to financial statements contained elsewhere herein.                   

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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General                                                                         

         The Company has been formed for the purpose of issuing the Common Stock
and owning all of the capital stock of the Bank issued in the Reorganization.   
Consequently, the Company has no operating history. All information in this     
section should be read in conjunction with the financial statements and notes   
thereto included in this Prospectus.                                            

      The Bank's principal business has historically consisted of offering
savings and other deposits to the general public and using the funds from such  
deposits to make loans secured by residential real estate, as well as commercial
real estate, consumer and commercial business loans. The Bank also invests a    
significant portion of its assets in investment securities and mortgage- and    
asset-backed securities, all of which are classified as available for sale. The 
Bank's net income depends primarily upon its net interest income, which is the  
difference between interest income earned on interest-earning assets, such as   
loans and investments, and the interest expense paid on deposits. The Bank's net
income is also affected to a lesser degree by noninterest income, such as       
banking service charges and fees. The Bank's net income is also affected by,    
among other things, provisions for loan losses and noninterest expenses. The    
Bank's principal operating expenses, aside from interest expense, consist of    
salaries and employee benefits, occupancy and equipment, data-processing        
expense, deposit insurance costs and other expenses such as professional fees   
and insurance premiums. The Bank's net income also is affected significantly by 
general economic and competitive conditions, particularly changes in market     
interest rates, government legislation and policies affecting fiscal affairs,   
housing and financial institutions, monetary policies of the Federal Reserve    
System, and the actions of bank regulatory authorities. Management intends to   
initially invest the net proceeds from the Offering in interest-earning assets  
and believes that the Company and the Bank will derive additional interest      
income from such sources.                                                       

     The Bank's equity position (as well as its regulatory capital) will
significantly increase as a result of the net proceeds received in the Offering,
and management anticipates that it will take time to prudently deploy such      
capital. Although earnings are expected to increase as a result of the          
investment of the net proceeds, until the Bank has leveraged the capital in the 
Offering by increasing its interest-earning assets (and its interest-bearing    
liabilities) and thereby reducing its equity as a percentage of assets, its     
return on average equity is expected to be below historical levels and the      
industry average. Moreover, the Company's earnings will be adversely affected in
the fiscal year in which the funding of the Charitable Foundation occurs.       

Operating Strategy                                                              

      In guiding the Bank's operations, management has implemented various
strategies designed to maintain and improve profitability consistent with safety
and soundness. These strategies include: (i) operating a community bank that    
provides quality service by monitoring the needs of its customers and offering  
customers personalized service; (ii) emphasizing one- to four-family residential
real estate lending; (iii) maintaining high levels of liquidity; and (iv)       
maintaining asset quality. It is anticipated, subject to market conditions, that
the strategies presently in place will be continued following completion of the 
Reorganization.                                                                 

  Community Banking. The Bank was established in 1889 and has been
operating continuously since that time. Throughout its history, the Bank has    
been committed to meeting the financial needs of the communities in which it    
operates and is dedicated to providing quality service to its customers. This   
has enabled the Bank to maintain a high level of core deposits, which comprised 
54.5% of total deposits at June 30, 1998, and generally represent, lower-cost   
funds than certificate accounts. Management believes that the Bank can be more  
effective than many of its competitors in serving its customers because of its  
ability to promptly and effectively provide senior management responses to      
customer needs and inquiries. The Bank's ability to provide these services is   
enhanced by the stability of senior management which has an average tenure with 
the Bank of over 20 years and banking experience averaging 25 years. In         
addition, the Bank intends to use the mutual holding company structure to       
maintain its position as an independent community bank, and to establish the    
Charitable Foundation as a means of furthering the Bank's commitment to the     
communities in which it conducts business.                                      

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         Emphasis on Residential Real Estate Lending. Historically, the Bank has
emphasized the origination and retention in portfolio of fixed-rate one- to     
four-family residential loans within Greene County. As of June 30, 1998, 85.5%  
of the loan portfolio consisted of one- to four-family residential mortgage     
loans and home equity loans; 92.5% of the loan portfolio consisted of loans     
secured by real estate, substantially all of which was located in Greene County.
During the year ended June 30, 1998, the Bank originated $15.8 million of one-  
to four-family mortgage loans, 95.3% of which were originated with fixed rates. 
At June 30, 1998, 71.1% of the Bank's one- to four-family residential real      
estate loans were fixed rate.                                                   

        Maintaining High Levels of Liquid Investments. To position the Bank to
redeploy assets profitability in a rising interest rate environment, management 
has determined to invest a significant portion of its assets in short-term      
liquid investments. The Bank maintains a significant portion of its assets in   
short-term U.S. Government and agency securities and other interest earning     
assets (including federal funds sold, corporate debt securities and municipal   
bonds issued by political subdivisions of New York State). At June 30, 1998,    
U.S. Government and agency securities and municipal bonds due in five years or  
less totalled $25.9 million, and federal funds sold and cash and due from banks 
totalled $8.3 million, or, collectively, 24.4% of the Bank's total assets. See  
"Risk Factors--Potential Effects of Changes in Interest Rates and the Current   
Interest Rate Environment," "--Management of Interest Rate Risk" and "Business  
of the Bank-- Securities Investment Activities."                                

         Maintaining Asset Quality. The Bank's high asset quality is a result of
its conservative underwriting standards, the diligence of its loan collection   
personnel and the stability of the local economy. The Bank also invests in      
investment securities, consisting primarily of U.S. Government securities,      
federal agency obligations and mortgage-backed securities issued by Freddie Mac 
and Fannie Mae and, to a lesser extent, private issuers. The Bank also purchases
other investment securities, such as municipal bonds and corporate debt         
securities, which are generally rated A or higher by at least one nationally    
recognized rating agency or receive a rating of A of higher as a result of a    
guarantee by insurance companies. At June 30, 1998, the Bank's ratio of         
nonperforming assets to total assets was 0.72%. At June 30, 1998, the Bank's    
ratio of allowance for loan losses to non-performing loans was 82.17%.          

Management of Interest Rate Risk                                                

         While the Bank's loan portfolio, consisting primarily of mortgage loans
secured by residential real property located in its market area, is subject to  
risks associated with the local economy, the Bank's most significant form of    
market risk is interest rate risk because the Bank's assets and liabilities are 
sensitive to changes in interest rates. The Bank's assets consist primarily of  
residential mortgage loans which have longer maturities than the Bank's         
liabilities, which consist primarily of deposits. The Bank does not engage in   
any hedging transactions, such as interest rate swaps and caps. The Bank's      
interest rate risk management program focuses primarily on evaluating and       
managing the composition of the Bank's assets and liabilities in the context of 
various interest rate scenarios. Factors beyond management's control, such as   
market interest rates and competition, also have an impact on interest income   
and interest expense.                                                           

        A principal part of the Bank's business strategy is to manage interest
rate risk and to minimize the Bank's exposure to changes in market interest     
rates. In recent years, the Bank has followed the following strategies to manage
interest rate risk: (i) investing in short-term U.S. Government securities and  
federal agency obligations; (ii) maintaining a high level of liquid             
interest-earning assets such as short-term federal funds sold ; (iii)           
maintaining a high concentration of less interest-rate sensitive and            
lower-costing "core deposits"; (iv) originating consumer installment loans that 
have up to 5 year terms but that have significantly shorter average lives due to
early prepayments; and (v) where possible, matching the funding requirements for
fixed-rate residential mortgages with lower-costing core deposit accounts. By   
investing in short-term, liquid securities and originating consumer installment 
loans with shorter-average durations, the Bank believes it is better positioned 
to react to increases in market interest rates. However, investments in         
shorter-term securities generally bear lower yields than longer-term            
investments. Thus, these strategies may result in lower levels of interest      
income than would be obtained by investing in longer-term fixed-rate loans. See 
"Business of the Bank--Securities Investment Activities."                       

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         Gap Analysis. The matching of assets and liabilities may be analyzed by
examining the extent to which such assets and liabilities are "interest rate    
sensitive" and by monitoring a bank's interest rate sensitivity "gap." An asset 
or liability is deemed to be interest rate sensitive within a specific time     
period if it will mature or reprice within that time period. The interest rate  
sensitivity gap is defined as the difference between the amount of              
interest-earning assets maturing or repricing within a specific time period and 
the amount of interest-bearing liabilities maturing or repricing within that    
same time period. At June 30, 1998, the Bank's cumulative one-year gap position,
the difference between the amount of interest-earning assets maturing or        
repricing within one year and interest-bearing liabilities maturing or repricing
within one year, was a negative 7.78%. A gap is considered positive when the    
amount of interest rate sensitive assets exceeds the amount of interest rate    
sensitive liabilities. A gap is considered negative when the amount of interest 
rate sensitive liabilities exceeds the amount of interest rate sensitive assets.
Accordingly, during a period of rising interest rates, an institution with a    
negative gap position generally would not be in as favorable a position,        
compared to an institution with a positive gap, to invest in higher yielding    
assets. The resulting yield on the institution's assets generally would increase
at a slower rate than the increase in its cost of interest-bearing liabilities. 
Conversely, during a period of falling interest rates, an institution with a    
negative gap would tend to experience a repricing of its assets at a slower rate
than its interest-bearing liabilities which, consequently, would generally      
result in its net interest income growing at a faster rate than an institution  
with a positive gap position.                                                   

       The following table sets forth the amounts of interest-earning assets
and interest-bearing liabilities outstanding at June 30, 1998, which are        
anticipated by the Bank, based upon certain assumptions, to reprice or mature in
each of the future time periods shown (the "GAP Table"). Except as stated below,
the amount of assets and liabilities shown which reprice or mature during a     
particular period were determined in accordance with the earlier of term to     
repricing or the contractual maturity of the asset or liability. The table sets 
forth an approximation of the projected repricing of assets and liabilities at  
June 30, 1998, on the basis of contractual maturities, anticipated prepayments  
and scheduled rate adjustments within a three month period and subsequent       
selected time intervals. The loan amounts in the table reflect principal        
balances expected to be redeployed and/or repriced as a result of contractual   
amortization and anticipated prepayments of adjustable-rate and fixed-rate      
loans, and as a result of contractual rate adjustments on adjustable-rate loans.
The annual prepayment rate for real estate-related assets are based on the      
particulars of coupon maturity of the real estate-related assets. See "Business 
of the Bank--Lending Activities," "--Securities Investment Activities" and      
"--Sources of Funds."                                                           

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                                                        [Enlarge/Download Table]


                                                                  Amounts Maturing or Repricing at June 30, 1998                
                                                  ------------------------------------------------------------------------------
                                                  Up to 90     3 Months to  6 Months to    1 to 2      2 to 3      3 to 5       
                                                    Days       6 Months     1 Year         Years        Years       Years       
                                                    ----       --------     ------         -----        -----       -----       
                                                                                               (Dollars in Thousands)           
                                                                                                                                
Interest-earning assets: (1)                                                                                                    
   Loans receivable (2) ........................   $  7,105    $  8,092     $ 14,138     $  7,577     $  6,588     $ 11,170     
   Investment securities .......................      5,009       2,636        5,228        9,508        8,212       11,469     
   Federal funds sold ..........................      5,796        --           --           --           --           --       
                                                   --------    --------     --------     --------     --------     --------     
     Total interest-earning assets .............   $ 17,910    $ 10,728     $ 19,366     $ 17,085     $ 14,800     $ 22,639     

Interest-bearing liabilities:                                                                                                   
   Savings deposits ............................   $  1,671    $  1,671     $  3,341     $  6,682     $  6,682     $ 13,365     
   NOW deposits ................................        309         309          619        1,237        1,237        2,474     
   MMDA accounts ...............................      2,129       2,129        2,907        3,111        3,111        6,222     
   Certificate accounts ........................     11,764      10,429       20,857        7,033        3,619        1,900     
   Borrowings ..................................       --          --           --           --           --           --       
   Escrow deposits .............................         84          84          169          337          337          675     
                                                   --------    --------     --------     --------     --------     --------     
     Total interest-bearing liabilities ........   $ 15,957    $ 14,622     $ 27,893     $ 18,400     $ 14,987     $ 24,638     

Interest sensitivity gap .......................      1,953      (3,894)      (8,527)      (1,315)        (187)      (1,999)    
Cumulative interest sensitivity gap ............      1,953      (1,941)     (10,468)     (11,783)     (11,970)     (13,969)    
Cumulative interest sensitivity gap as a                                                                                        
   percentage of total assets ..................      1.39%      (1.38%)      (7.46%)      (8.40%)      (8.53%)      (9.96%)    
Cumulative interest sensitivity gap as a                                                                                        
     percentage of total interest-earning assets      1.45%      (1.44%)      (7.78%)      (8.76%)      (8.90%)     (10.38%)    
Cumulative interest-earning                                                                                                     
   assets as a percentage of cumulative                                                                                         
    interest-bearing liabilities ...............    112.24%       93.65%       82.10%       84.67%       86.97%       88.01%    

                                                                [Download Table]


                                                 Amounts Maturing or 
                                                     Repricing at    
                                                    June 30, 1998    
                                                 --------------------
                                                 Over 5              
                                                  Years        Total 
                                                  -----        ----- 

                                                                     
Interest-earning assets: (1)                                         
   Loans receivable (2) ........................ $ 26,317    $ 80,988
   Investment securities .......................    5,716      47,778
   Federal funds sold ..........................     --         5,796
                                                 --------    --------
     Total interest-earning assets ............. $ 32,034    $134,562

Interest-bearing liabilities:                                        
   Savings deposits ............................     --      $ 33,412
   NOW deposits ................................     --         6,186
   MMDA accounts ...............................     --        19,609
   Certificate accounts ........................     --        55,602
   Borrowings ..................................     --          --  
   Escrow deposits .............................     --         1,687
                                                 --------    --------
     Total interest-bearing liabilities ........ $   --      $116,497

Interest sensitivity gap .......................   32,034            
Cumulative interest sensitivity gap ............   18,065            
Cumulative interest sensitivity gap as a                             
   percentage of total assets ..................  12.88%             
Cumulative interest sensitivity gap as a                             
     percentage of total interest-earning assets  13.43%             
Cumulative interest-earning                                          
   assets as a percentage of cumulative                              
    interest-bearing liabilities ...............  115.51%            

---------------------------------                                               
(1) Interest-earning assets are included in the period in which the balances    
are expected to be redeployed and/or repriced as a result of anticipated
prepayments, scheduled rate adjustments and contractual maturities.     
(2) Calculated net of deferred loan fees, loan discounts and loans in process.  

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       Certain shortcomings are inherent in the method of analysis presented
in the GAP Table. For example, although certain assets and liabilities may have 
similar maturities or periods to repricing, they may react in different degrees 
to changes in market interest rates. Also, the interest rates on certain types  
of assets and liabilities may fluctuate in advance of changes in market interest
rates, while interest rates on other types may lag behind changes in market     
rates. Additionally, certain assets such as adjustable-rate loans, have features
that restrict changes in interest rates both on a short-term basis and over the 
life of the asset. Further, in the event of changes in interest rates,          
prepayment and early withdrawal levels would likely deviate significantly from  
those assumed in calculating the table. Finally, the ability of many borrowers  
to service their adjustable-rate loans may decrease in the event of an interest 
rate increase.                                                                  

Analysis of Net Interest Income                                                 

 Net interest income represents the difference between income on
interest-earning assets and expense on interest-bearing liabilities. Net        
interest income also depends on the relative amounts of interest-earning assets 
and interest-bearing liabilities and the interest rate earned or paid on them,  
respectively.                                                                   

Average Balance Sheet. The following tables set forth certain 
information relating to the Bank at June 30, 1998 and for the years ended June  
30, 1998 and 1997. For the periods indicated, the total dollar amount of        
interest income from average interest-earning assets and the resultant yields,  
as well as the interest expense on average interest-bearing liabilities, is     
expressed both in dollars and rates. No tax equivalent adjustments were made.   
All average balances are average monthly balances. Non-accruing loans have been 
excluded from the yield calculations in these tables.                           

                                                        [Enlarge/Download Table]


                                                                     At June 30, 1998        
                                                             ------------------------------- 
                                                                 Actual                      
                                                                 Balance        Yield/Rate   
                                                             --------------    ------------  
                                                                     (In Thousands)          
                                                                                             
Interest-earning assets:                                                                     
   Loans receivable, net (1)................................ $   80,260              7.93  % 
   Investment securities....................................     47,078              5.80    
   Federal funds............................................      5,796              5.75    
   FHLB stock...............................................        700               --     
                                                             ----------------- --------------
     Total interest-earning assets (1)                       $   133,834             7.10  % 
                                                             ----------------- --------------
                                                             ----------------- --------------

Interest-bearing liabilities:                                                                
   Savings deposits......................................... $   52,560              3.45  % 
   Demand and NOW deposits..................................     14,162              1.31    
   Certificate accounts.....................................     55,602              5.23    
   Borrowings...............................................         --                --    
                                                             ----------------- --------------
     Total interest-bearing liabilities                      $  122,324              4.06  % 
                                                             ----------------- --------------
                                                             ----------------- --------------

--------------------------------                                                
(1) Calculated net of deferred loan fees, loan discounts, loans in process and  
loss reserves.                                                                  

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                                                        [Enlarge/Download Table]


                                                                          Years Ended June 30,                              
                                           ---------------------------------------------------------------------------------
                                                            1998                                      1997                  
                                           ---------------------------------------------------------------------------------
                                           ---------------------------------------     -------------------------------------
                                             Average      Interest                        Average     Interest              
                                           Outstanding    Earned/                      Outstanding     Earned/              
                                             Balance       Paid          Yield/Rate      Balance       Paid      Yield/Rate 
                                           -----------   ----------      ----------    -----------    --------   ---------- 
                                                                         (Dollars in Thousands)                             
                                                                                                                            
Interest-earning assets:                                                                                                    
   Loans receivable, net (1) .............   $ 77,873    $  6,367         8.18 %        $ 74,47      $6,175        8.29 %   
   Investment securities (2) .............     44,280       2,743         6.19            41,166      2,585        6.28     
   Federal funds .........................      6,713         392         5.85             9,569        537        5.61     
   FHLB stock ............................         58         --            --                --         --          --     
                                             --------    --------         ------        --------     ------      ---------  
     Total interest-earning assets .......   $128,924    $  9,502         7.37 %         125,212     $9,297        7.43 %   
                                             --------    --------         ------        --------     ------      ---------  
                                             --------    --------         ------        --------     ------      ---------  

Interest-bearing liabilities:                                                                                               
   Savings deposits ......................   $ 51,791    $  1,812         3.50          $ 53,860     $1,886        3.50 %   

   Demand and NOW deposits ...............     12,472         186         1.50            11,260        152        1.35     
   Certificate accounts ..................     53,389       2,970         5.56            49,589      2,742        5.53     
   Borrowings ............................         --          --           --                --         --          --     
                                             --------    --------         ------        --------     ------      ---------  
     Total interest-bearing liabilities ..   $117,653    $  4,968         4.22%         $114,709     $4,780        4.17%    
                                             --------    --------         ------        --------     ------      ---------  
                                             --------    --------         ------        --------     ------      ---------  
Net interest income ......................               $  4,534                                    $4,517                 
                                             --------    --------         ------        --------     ------      ---------  
                                             --------    --------         ------        --------     ------      ---------  
Net interest rate spread .................                                3.15 %                                   3.26%    
                                             --------                     ------        --------                 ---------  
                                             --------                     ------        --------                 ---------  
Net earning assets .......................   $ 11,272                                   $ 10,503                            
                                             --------                                   --------                            
                                             --------                                   --------                            
Net yield on average interest-                                                                                              
   earning assets ........................                   3.52%                                     3.61%                
                                                         --------                                    ------                 
                                                         --------                                    ------                 
Average interest-earning assets to                                                                                          
   average interest-bearing liabilities ..                 109.58%                                   109.16 %               
                                                         --------                                    ------                 
                                                         --------                                    ------                 

(1) Calculated net of deferred loan fees, loan discounts, loans in process and  
loss reserves. (2) Includes mortgage-backed securities and asset-backed         
securities.                                                                     

        Rate/Volume Analysis. The following table presents the extent to which
changes in interest rates and changes in the volume of interest-earning assets  
and interest-bearing liabilities have affected the Bank's interest income and   
interest expense during the periods indicated. Information is provided in each  
category with respect to: (i) changes attributable to changes in volume (changes
in volume multiplied by prior rate); (ii) changes attributable to changes in    
rate (changes in rate multiplied by prior volume); and (iii) the net change. The
changes attributable to the combined impact of volume and rate have been        
allocated proportionately to the changes due to volume and the changes due to   
rate.                                                                           

                                                        [Enlarge/Download Table]


                                                                          Years Ended June 30,                            
                                        --------------------------------------------------------------------------------  
                                           1998 vs. 1997                                1997 vs. 1996                     
                                         Increase/(Decrease)           Total          Increase/(Decrease)          Total  
                                              Due to                 Increase/             Due to                Increase/
                                         Volume       Rate          (Decrease)        Volume        Rate        (Decrease)
                                         ------       -------       ----------        ------        -----       ----------
                                                                             (In Thousands)                               
                                                                                                                          
Interest-earning assets:                                                                                                  
  Loans receivable, net ..............   $ 391         $(199)        $ 192            $ 140         $   9         $ 149   
  Investment securities (1) ..........      28            (9)          (20)             184           125           309   
  Equity securities ..................      (5)           (1)           (6)              16            (1)           15   
                                         -----         -----         -----            -----         -----         -----   
    Total interest-earning assets ....     415          (209)          206              340           133           473   
                                         -----         -----         -----            -----         -----         -----   

Interest-bearing liabilities:                                                                                             
  Savings deposits ...................     (43)          (31)          (74)             168            --           168   
  Demand and NOW deposits ............     196          (162)           34               (3)          141           138   
  Certificate accounts ...............     201            27           228               38             3            41   
                                         -----         -----         -----            -----         -----         -----   
    Total interest-bearing liabilities     354          (166)          188              203           144           347   
                                         -----         -----         -----            -----         -----         -----   
Net interest income ..................   $  61         $ (43)        $  18            $ 137         $ (11)        $ 126   
                                         -----         -----         -----            -----         -----         -----   
                                         -----         -----         -----            -----         -----         -----   

(1) Includes mortgage-backed securities and asset-backed securities.            

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Comparison of Financial Condition at June 30, 1998 and June 30, 1997            

        Assets. Total assets increased to $140.3 million at June 30, 1998 from
$132.5 million at June 30, 1997, an increase of $7.8 million, or 5.9%. This     
growth in total assets reflected an increase in loans receivable, net, which    
increased by 6.2% to $80.3 million at June 30, 1998 from $75.6 million at June  
30, 1997, as well as an increase in investment securities of $4.8 million, or   
11.1%, to $47.8 million at June 30, 1998 from $43.0 million at June 30, 1997.   
The increase in total assets also reflected an increase in premises and         
equipment of $900,000, to $2.6 million at June 30, 1998 from $1.7 million at    
June 30, 1997 due to the completion and opening of the Bank's new branch office 
in Greenville, New York in December 1997. The growth in total assets was funded 
by deposits, which increased by $6.4 million, or 5.5%, to $122.3 million at June
30, 1998 from $115.9 million at June 30, 1997.                                  

       Net loans receivable increased to $80.3 million at June 30, 1998 from
$75.6 million at June 30, 1997. In the year ended June 30, 1998, one- to        
four-family residential mortgage loans increased by $3.7 million, or 6.1%, home 
equity loans increased $674,000, or 16.6%, consumer loans increased $414,000, or
11.0%, and commercial business loans increased $304,000, or 29.5%. The increases
in loans in these categories more than offset a decrease of $822,000, or 15.4%, 
in commercial real estate loans, and reflected the economic strength and loan   
demand in the Bank's primary lending area as well as consumer demand for the    
Bank's fixed-rate mortgage loan products in the current low market interest rate
environment.                                                                    

       The Bank's investment securities portfolio increased by $4.8 million,
or 11.2%, to $47.8 million at June 30, 1998 from $43.0 million at June 30, 1997.
The Bank joined the FHLB in 1998. At June 30, 1998, the Bank held $700,000 of   
FHLB stock.                                                                     

    Liabilities. Total deposits increased by $6.4 million, or 5.5%, to
$122.3 million at June 30, 1998 from $115.9 million at June 30, 1997. The growth
in deposits reflected in part deposit inflows resulting from the expansion of   
the Bank's branch network with the opening of the new branch office in          
Greenville in December 1997. The Bank's certificate accounts increased to $55.6 
million at June 30, 1998 from $51.2 million at June 30, 1997, while             
noncertificate accounts increased to $66.7 million at June 30, 1998 from $64.7  
million at June 30, 1997. The increase in certificates of deposit was           
attributable primarily to the Greenville branch opening as well as the migration
of some funds from savings and other demand accounts to higher-yielding         
certificate accounts in the lower interest rate environment. While the Bank has 
access to borrowings, at June 30, 1998 there were no borrowings outstanding.    

       Retained Earnings. Total retained earnings increased by $1.3 million,
or 9.0%, to $15.7 million at June 30, 1998 from $14.4 million at June 30, 1997. 
The increase in total retained earnings resulted from after tax net income of   
$1.1 million in the year ended June 30, 1998 as well as an increase of $174,000 
in net unrealized gain on securities available for sale. As market interest     
rates decreased in the year ended June 30, 1998, the market value of the Bank's 
securities was positively affected.                                             

Comparison of Operating Results for the Years Ended June 30, 1998 and June 30,  
1997                                                                            

        General. The earnings of the Bank depend primarily on its level of net
interest income, which is the difference between interest earned on the Bank's  
interest-earning assets, consisting primarily of residential and commercial real
estate loans, consumer loans and securities available for sale, and the interest
paid on interest-bearing liabilities, consisting primarily of deposits. Net     
interest income is a function of the Bank's interest rate spread, which is the  
difference between the average yield earned on interest-earning assets and the  
average rate paid on interest-bearing liabilities, as well as a function of the 
average balance of interest-earning assets as compared to interest-bearing      
liabilities. The Bank's earnings also are affected by its fees and service      
charges and gains on sale of loans and securities, as well as its level of      
operating and other expenses, including salaries and employee benefits,         
occupancy and equipment costs, data processing expense, marketing and           
advertising costs, and federal deposit insurance premiums.                      

 Net income for the year ended June 30, 1998 was $1.1 million, a
decrease of $298,000, or 20.6%, from net income of $1.4 million for the year    
ended June 30, 1997. The decrease in net income was due primarily to a decrease 

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of $85,000, or 16.3%, in noninterest income and an increase of $376,000, or     
13.6%, in noninterest expense. These items were partially offset by a decrease  
of $138,000 in tax expense for the year ended June 30, 1998.                    

     Interest Income. Interest income increased by $206,000, or 2.2%, to
$9.5 million for the year ended June 30, 1998 from $9.3 million for the year    
ended June 30, 1997. The increase was primarily due to a $192,000, or 3.1%,     
increase in interest income paid on loans and a $158,000, or 6.1%, increase in  
interest and dividends on investments for the year ended June 30, 1998 as       
compared to the year ended June 30, 1997. The increase in interest from loans   
was attributable to a $3.4 million, or 4.6%, increase in the average balance of 
loans receivable, partially offset by a 11 basis point decrease in the average  
yield on loans receivable to 8.18% for the year ended June 30, 1998 from 8.29%  
for the year ended June 30, 1997. The continued origination and portfolio growth
of the Bank's one- to four-family residential mortgage loans was responsible for
the substantial majority of the increase in loans receivable, reflecting growth 
in the Bank's primary market area as well as demand for the Bank's fixed-rate   
one- to four-family real estate loan product in the current low market interest 
rate environment. The increase in interest and dividends from investments was   
due to a $3.1 million, or 8.0%, increase in the average balance of investment   
securities to $44.3 million for the year ended June 30, 1998 as compared to     
$41.2 million for the year ended June 30, 1997. This increase more than offset a
9 basis point decrease in the average yield on investment securities to 6.19%   
from 6.28%. The increase in the average balance of investment securities        
reflected the temporary deployment of liquidity pending investment in           
higher-yielding mortgage loans, as well as management's desire to take advantage
of the shorter weighted average lives of U.S. Treasury securities and the       
relatively high yield available from such securities as compared to longer      
maturity securities given the relatively flat yield curve that prevailed during 
the period.                                                                     

       Interest Expense. Interest expense increased by $188,000, or 3.9%, to
$5.0 million for the year ended June 30, 1998 from $4.8 million for the year    
ended June 30, 1997. The increase was due to a $2.9 million, or 2.6%, increase  
in the average balance of interest-bearing liabilities as well as a 5 basis     
point increase in the average rate paid on such liabilities for the year ended  
June 30, 1998 as compared to the year ended June 30, 1997. In particular, the   
increase in interest expense resulted from an increase in interest expense on   
certificate accounts, which rose to $3.0 million for the year ended June 30,    
1998 as compared to $2.7 million for the year ended June 30, 1997. This increase
was due to an increase of $3.8 million, or 7.7%, in the average balance of such 
certificate accounts to $53.4 million for the year ended June 30, 1998 from     
$49.6 million for the year ended June 30, 1997. The increase in the average     
balance of such certificate accounts reflected the Bank's new branch opening in 
Greenville, New York in December 1997. The increase in interest expense         
attributable to certificate accounts was partially offset by a $74,000, or 3.9%,
decrease in interest expense on savings deposits, reflecting a $2.1 million, or 
3.8%, decrease in the average balance of savings deposits for the year ended    
June 30, 1998 as compared to the year ended June 30, 1997. The average cost of  
such deposits remained unchanged at 3.50%.                                      

     Provision for Loan Losses. The Bank establishes provisions for loan
losses, which are charged to operations, in order to maintain the allowance for 
loan losses at a level which is deemed appropriate to absorb future charge-offs 
and loans deemed uncollectible. In determining the appropriate level of the     
allowance for loan losses, management considers past and anticipated loss       
experience, collateral values, current and anticipated economic conditions      
volume and type of lending activities and the levels of non-performing and other
classified loans. The allowance is based on estimates and the ultimate losses   
may vary from such estimates. Management of the Bank assesses the allowance for 
loan losses on a quarterly basis and makes provisions for loan losses in order  
to maintain the adequacy of the allowance.                                      

         The Bank's provision for loan losses decreased to $120,000 for the year
ended June 30, 1998 from $125,000 for the year ended June 30, 1997. The higher  
provision for the year ended June 30, 1997 was due, in part, to exposure        
associated with loans made by the Bank to Bennett Funding Company, an equipment 
lease finance company, which subsequently declared bankruptcy. At June 30, 1998,
the $104,000 remaining balance of Bennett Funding Company lease receivables had 
been fully reserved.                                                            

         Noninterest Income. Noninterest income consists primarily of fee income
for bank services and gains on the sale of loans and securities. Noninterest    
income decreased by $85,000, or 16.3%, for the year ended June 30, 1998 as      
compared to the year ended June 30, 1997. The decrease was due primarily to a   
decrease in other operating income to $185,000 for the year ended June 30, 1998 
from $290,000 for the year ended June 30, 1997. The decrease in these items     

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was partially offset by an increase of $21,000, or 9.1%, in services charges on 
deposit accounts reflecting the increased average balances of such deposit      
accounts for the year ended June 30, 1998 as compared to the year ended June 30,
1997.                                                                           

    Noninterest Expense. Noninterest expense increased by $376,000, or
13.6%, to $3.1 million for the year ended June 30, 1998 compared to $2.8 million
for the year ended June 30, 1997. The increase was due to an $80,000, or 5.4%,  
increase in salaries and employee benefits, an increase of $51,000, or 32.5%, in
net occupancy expense and an increase of $22,000, or 13.2%, in equipment and    
furniture expense. Each of these increases was attributable in part to the      
Bank's opening of a new full service office in Greenville, New York in December 
1997, which necessitated the hiring of an additional five full time equivalent  
employees, as well as depreciation of building, furniture and equipment of the  
new branch office. The increase in net occupancy expense also reflects expenses 
related to the Bank's continued upgrading of its technology, communications and 
information systems. In addition, other noninterest expense increased by        
$223,000, or 23.2%, for the year ended June 30, 1998, reflecting a $25,000, or  
30.5%, increase in advertising expenses, a $25,000, or 33.3%, increase in office
supply expenses, a $15,000, or 62.5%, increase in mortgage recording fees, and a
$36,000, or 12.2%, increase in servicing costs, relating in part to the Bank's  
larger total loan portfolio.                                                    

       Income Taxes. Income tax expense was $553,361 for the year ended June
30, 1998 compared to $691,662 for the year ended June 30, 1997. The effective   
tax rate increased to 32.5% for the year ended June 30, 1998 from 32.3% for the 
year ended June 30, 1997.                                                       

Liquidity and Capital Resources                                                 

    The Bank's primary sources of funds are deposits and proceeds from
principal and interest payments on loans, mortgage-backed securities and debt   
securities, with two lines of credit available as needed. While maturities and  
scheduled amortization of loans and securities are predictable sources of funds,
deposit outflows, mortgage prepayments, and borrowings are greatly influenced by
general interest rates, economic conditions and competition.                    

The Bank's primary investing activities are the origination of
residential one- to four-family and commercial real estate loans, other consumer
and commercial business loans, and the purchase of mortgage-backed securities   
and debt securities. During the years ended June 30, 1998 and 1997, the Bank's  
loan originations totaled $25.0 million and $20.7 million, respectively.        
Purchases of mortgage-backed securities and debt securities totaled $16.7       
million and $10.9 million for the years ended June 30, 1998 and 1997,           
respectively. These activities were funded primarily by deposit growth and      
principal payments on loans, mortgage-backed securities and debt and equity     
securities. Loan sales did not provide an additional source of liquidity during 
the years ended June 30, 1998 and 1997 as the Bank generally originates loans   
for retention in its portfolio.                                                 

       The Bank experienced a net increase in total deposits of $6.5 million
and $1.7 million for the years ended June 30, 1998 and 1997, respectively.      
Deposit flows are affected by the level of interest rates, the interest rates   
and products offered by local competitors, and other factors.                   

   The Bank monitors its liquidity position on a daily basis. Excess
short-term liquidity is usually invested in overnight federal funds sold. In the
event the Bank requires funds beyond its ability to generate them internally,   
additional sources of funds are available through the use of short-term FHLB    
advances and two credit facilities made available to the Bank by other financial
institutions. There have been no borrowings outstanding during any of the       
periods presented.                                                              

 Loan commitments totaled $2.4 million at June 30, 1998 and were
comprised of $309,000 in commitments to originate adjustable rate loans and $2.1
million in commitments to originate fixed rate loans. The Bank anticipates that 
it will have sufficient funds available to meet current loan commitments.       
Certificates of deposit which are scheduled to mature in one year or less from  
June 30, 1998 totaled $43.1 million. Based upon the Bank's experience and its   
current pricing strategy, management believes that a significant portion of such
deposits will remain with the Bank.                                             

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   At June 30, 1998, the Bank exceeded all of its regulatory capital
requirements. See "Regulatory Capital Compliance" and "Regulation--Regulatory   
Capital Requirements."                                                          

    The Bank's most liquid assets are cash and interest-bearing demand
accounts. The levels of these assets are dependent on the Bank's operating,     
financing, lending and investing activities during any given period. At June 30,
1998, cash and interest-bearing demand account totaled $2.5 million, or 1.8% of 
total assets. Also at June 30, 1998, U.S. Government and agency securities and  
municipal bonds due in less than one year totalled $7.7 million, or 5.5% of     
total assets, and the Bank's portfolio of such securities due in less than five 
years totalled $25.6 million, or 18.3% of total assets.                         

Impact of New Accounting Standards                                              

       FASB Statement on Earnings Per Share. In February 1997, the Financial
Accounting Standards Board ("FASB") issued Statement of Financial Accounting    
Standards ("SFAS") No. 128. The Statement establishes standards for computing   
and presenting earnings per share and applies to entities with publicly held    
common stock or potential common stock. This Statement simplifies the prior     
accounting standards for computing earnings per share, as set forth in          
Accounting Principles Board ("APB") Opinion No. 15. SFAS No. 128 replaces the   
presentation of primary earnings per share ("EPS") with basic EPS and requires  
dual presentation of basic and diluted EPS on the face of the income statement  
for all entities with complex capital structures. Basic EPS excludes dilution   
and is computed by dividing income available to common stockholders by the      
weighted-average number of common shares outstanding for the period. Diluted EPS
reflects the potential dilution that could occur if securities or other         
contracts to issue common stock (such as stock options) were exercised or       
converted into common stock or resulted in the issuance of common stock that    
then shared in the earnings of the entity. This Statement will apply to the     
Bank's earnings per share disclosures which will be made from the date of       
completion of the Reorganization and the Offering.                              

       FASB Statement on Accounting for Stock-Based Compensation. In October
1995, the FASB issued SFAS No. 123 which addresses accounting for stock-based   
compensation arrangements such as the Stock Option Plan and Stock Award Plan    
which are expected to be implemented subsequent to the Reorganization. SFAS No. 
123 defines a "fair-value-based method" of accounting whereby compensation cost 
is measured at the grant date of a stock-based compensation award based on the  
fair value of the award; such compensation cost is recognized as expense over   
the service (vesting) period. The FASB has encouraged all entities to adopt the 
fair-value-based method; however, SFAS No. 123 allows entities to continue the  
use of the "intrinsic-value-based method" prescribed by APB Opinion No. 25.     
Under the intrinsic-value-based method, compensation cost is measured based on  
the award's intrinsic value, or the excess (if any) of the market price of the  
stock at the grant date over the exercise price, i.e., the amount (if any) that 
the employee must pay to acquire the stock. However, most stock option grants   
have no intrinsic value at the grant date and, as such, no compensation cost is 
recognized under APB Opinion No. 25. Entities electing to continue to apply APB 
Opinion No. 25 must make certain pro forma disclosures of net income and        
earnings per share, as if the fair-value- based method had been applied to      
awards granted in fiscal years beginning after December 15, 1994. The Bank      
expects to adopt the "intrinsic-value-based method" as prescribed by APB Opinion
No. 25. Accordingly, no compensation expense will be recognized for the Stock   
Option Plan since the exercise price of the options will equal the market price 
of the underlying stock at the grant date. The grant date fair value of shares  
awarded under the Recognition Plan will be recognized as expense on a           
straight-line basis over the vesting period. See "Pro Forma Data."              

   FASB Statement on Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities. In June 1996, the FASB issued SFAS No. 125 which
provides accounting and reporting standards for transfers and servicing of      
financial assets and extinguishments of liabilities based on consistent         
application of a financial-components approach that focuses on control. SFAS No.
125 applies to transactions such as loan shares of loans with servicing         
retained, securitizations, repurchase agreements, securities lending, loan      
participations and in-substance defeasances of debt. SFAS No. 125 distinguishes 
transfers of financial assets that are sales from transfers that are secured    
borrowings. Under the financial-components approach, after a transfer of        
financial assets, an entity recognizes all financial and servicing assets it    
controls and liabilities it has incurred and derecognizes financial assets it no
longer controls and liabilities that have been extinguished. If a transfer does 
not meet the criteria for a sale, the transaction is accounted for as a secured 
borrowing with a pledge of collateral. SFAS No. 125 applies prospectively to    
transactions                                                                    

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occurring after January 1, 1997, although the effective date of certain         
provisions was January 1, 1998. SFAS No. 125 has not had, and is not expected to
have, a material impact on the Bank's financial statements.                     

      FASB Statements on Reporting Comprehensive Income. In June 1997, the
FASB issued SFAS No. 130, "Reporting Comprehensive Income," which establishes   
standards for the reporting and display of comprehensive income (and its        
components) in financial statements. The standard does not, however, specify    
when to recognize or how to measure items that make up comprehensive income.    
Comprehensive income represents net income and certain amounts reported directly
in equity, such as the net unrealized gain of loss on available-for-sale        
securities. While SFAS No. 130 does not require a specific reporting format it  
does require that an enterprise display in the financial statements am amount   
representing total comprehensive income for the period. SFAS No. 130 is         
effective for fiscal years beginning after December 15, 1997 and accordingly,   
will be adopted by the Bank in the fiscal year beginning July 1, 1998.          
Management does not anticipate that the adoption of this standard will          
significantly affect the Bank's financial reporting.                            

        FASB Statement on Segment Disclosures and Related Information. In June
1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information," which changes the way public companies report         
information about segments of their business and requires them to report        
selected segment information in their quarterly reports issued to shareholders. 
Among other things, SFAS No. 131 requires public companies to report (i) certain
financial and descriptive information about its reportable operating segments   
(as defined), and (ii) certain enterprise-wide financial information about      
products and services, geographic areas and major customers. The required       
segment financial disclosures include a measure of profit or loss, certain      
specific revenue and expense items, and total assets. SFAS No. 131 is effective 
for reporting by public companies in fiscal years beginning after December 15,  
1997 and, accordingly, would be adopted by the Bank upon completion of the      
Reorganization and Offering. SFAS No. 131 is not expected to have a significant 
impact on the Bank's financial reporting.                                       

 FASB Statement on Employer Disclosures about Pensions and Other
Postretirement Benefits. In February 1998, the FASB issued SFAS No. 132 which   
standardizes the disclosure requirements for pensions and other postretirement  
benefits; requires additional information on changes in the benefit obligations 
and fair values of plan assets; and eliminates certain present disclosure       
requirements. SFAS No. 132 does not change the recognition or measurement       
requirements for postretirement benefits. SFAS No. 132 is effective for fiscal  
years beginning after December 15, 1997 and, accordingly, will be adopted by the
Bank in the fiscal year beginning July 1, 1998. Management does not anticipate  
that this standard will significantly affect the Bank's financial reporting.    

         FASB Statement on Derivatives and Hedging Activities. In June 1998, the
FASB issued SFAS No. 133 which establishes accounting and reporting standards   
for derivative instruments and for hedging activities. SFAS No. 133 requires    
that an entity recognize all derivatives as either assets or liabilities in the 
statement of financial condition at fair value. If certain conditions are met, a
derivative may be specifically designated as a fair value hedge, a cash flow    
hedge, or a foreign currency hedge. A specific accounting treatment applies to  
each type of hedge. Entities may reclassify securities from the held-to-maturity
category to the available-for-sale category at the time of adopting SFAS No.    
133. The Bank has not yet determined whether it will reclassify securities      
between categories. SFAS No. 133 is effective for all fiscal quarters of fiscal 
years beginning after June 15, 1999 and, accordingly, will be adopted by the    
Bank in the fiscal year beginning on July 1, 1999. The Bank has not engaged in  
derivatives and hedging activities covered by the new standard, and does not    
expect to begin such activities. Accordingly, SFAS No. 133 is not expected to   
have a material impact on the Bank's consolidated financial statements.         

Capability of the Bank's Data Processing to Accommodate the Year 2000           

        Like many financial institutions, the Bank relies upon computers for
the daily conduct of its business and for data processing. There is concern that
on January 1, 2000 computers will be unable to "read" the new year and as a     
consequence, there may be widespread computer malfunctions. The Bank uses an    
outside data processing servicer. Management has developed a formal written plan
to resolve any concern about the year 2000 issue and the Bank is in the process 
of testing its computer applications and hardware to ensure that they will be   
able to read the year 2000. Testing of mission-critical systems has been        
completed, and overall testing is expected to be completed by the end of the    
first calendar quarter in 1999. While the Bank's year 2000 committee has        
discussed contingency plans, such plans                                         

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have not yet been formalized, pending the completion of testing. It is expected 
that contingency plans will also be completed by the end of the first calendar  
quarter in 1999.                                                                

      The Bank has contacted each of its data processing vendors to ensure
that they will be able to provide service in light of the year 2000 issue. Such 
vendors have represented to management that they are addressing the year 2000   
issue and they expect to be able to provide the services for which the Bank has 
contracted. Management will continue to monitor this issue and report to the    
Board of Trustees on a quarterly basis until full compliance is obtained from   
all vendors. In considering the year 2000 readiness of the Bank's major         
borrowers, management first determined that no borrower currently has been      
extended credit exceeding 10% of the Bank's capital. Management has also        
informally contacted the Bank's larger borrowers, and has been assured that date
sensitivity is not an issue with such borrowers.                                

      Finally, management has evaluated the date sensitivity of the Bank's
non-information technology, such as utilities and its components (including     
elevators, heating/air conditioning systems, alarms and video equipment). These 
utilities and components are either not computer-driven or are expected to      
function normally after year 2000.                                              

   Costs related to the year 2000 issue will be expensed as they are
incurred, except for the costs, if any, for new hardware and software that is   
purchased, which will be capitalized. Management has budgeted $110,000 for      
updating its hardware and software systems to ensure compliance. Other than this
budgeted expenditure, management does not expect additional material costs to be
incurred in connection with the year 2000 issue.                                

    The costs of the project are based on management's best estimates,
which were derived using numerous assumptions of future events including the    
continued availability of certain resources, third party modification plans and 
other factors. However, there can be no guarantee that these estimates will be  
achieved, and actual results could differ materially from those plans. Specific 
factors that might cause such material differences include, but are not limited 
to, the availability and cost of personnel trained in this area, the ability to 
locate and correct all relevant computer codes and similar uncertainties. In    
addition, there can be no guarantee that the systems of other companies on which
the Bank's systems rely will be timely converted, or that a failure to convert  
by another company, or a conversion that is incompatible with the Bank's        
systems, would not have a material adverse effect on the Bank.                  

 BUSINESS OF GREENE COUNTY BANCORP, INC.

General                                                                         

     In July 1998, the Board of Trustees of the Bank adopted the Plan of
Reorganization. Pursuant to the Plan of Reorganization, the Bank organized the  
Company. The Bank will be a wholly-owned subsidiary of the Company, the majority
of whose shares will be held by the Mutual Company. See "Greene County Bancorp, 
Inc." and "Regulation--Holding Company Regulation."                             

  The Company is currently not an operating company. Following the
Reorganization, in addition to directing, planning and coordinating the business
activities of the Bank, the Company will initially invest net proceeds it       
retains primarily in short- and medium-term debt securities and marketable      
equity securities. The Company also intends to fund the loan to the ESOP to     
enable the ESOP to purchase 8% of the Minority Ownership Interest. In the       
future, the Company may acquire or organize other operating subsidiaries,       
including other financial institutions and financial services companies. See    
"Use of Proceeds." Presently, there are no agreements or understandings for an  
expansion of the Company's operations. Initially, the Company will neither own  
nor lease any property from any third party, but will instead use the premises, 
equipment and furniture of the Bank. At the present time, the Company does not  
intend to employ any persons other than certain officers of the Bank, who will  
not be separately provided cash compensation by the Company. The Company may    
utilize support staff of the Bank from time to time, if needed. Additional      
employees will be hired as appropriate to the extent the Company expands its    
business in the future.                                                         

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BUSINESS OF THE BANK

General                                                                         

      The Bank's principal business consists of attracting retail deposits
from the general public in the areas surrounding its branches and investing     
those deposits, together with funds generated from operations and borrowings,   
primarily in one- to four-family residential mortgage loans, commercial real    
estate loans, home equity loans, consumer loans and commercial business loans.  
In addition, the Bank invests a significant portion of its assets in investment 
securities and mortgage- and asset-backed securities. The Bank's revenues are   
derived principally from the interest on its mortgage, consumer and commercial  
loans and securities, loan origination and servicing fees and service charges   
and fees collected on its deposit accounts. The Bank's primary sources of funds 
are deposits, and principal and interest payments on loans and investment and   
mortgage- and asset-backed securities. In recent years the Bank has not had any 
borrowings.                                                                     

Market Area                                                                     

        The Bank has been, and intends to continue to be, a community-oriented
bank offering a variety of financial services to meet the needs of the          
communities it serves. The Bank currently operates four full service banking    
offices in Greene County, New York. The Bank's primary deposit gathering area is
currently concentrated around the areas within Greene County where its full     
service banking offices are located, namely the towns of Catskill, Greenville,  
Cairo and Coxsackie. The Bank's primary lending area also has historically been 
concentrated in Greene County, New York.                                        

        As of the 1990 census, the County population was 44,700 persons. As of
the 1990 census, Greene County had the fourth largest percentage of population  
growth in New York state in the ten year period ended in 1990. Greene County is 
primarily rural and the major industry consists of tourism associated with the  
several ski facilities and festivals located in the Catskill mountains. The     
County has no concentrations of manufacturing industry. Greene County is        
contiguous to the Albany-Schenectady-Troy metropolitan statistical area. The    
close proximity of Greene County to the city of Albany has made it a "bedroom"  
community for persons working in the Albany capital area. Greene County and the 
Coxsackie Correctional Facilities are the largest employers in the County. Other
large employers include the Hunter Mountain and Ski Windham resort areas, the   
Catskill, Cairo-Durham, Greenville and Coxsackie-Athens Central School Districts
and Stiefel Labs, Inc.                                                          

Competition                                                                     

    The Bank faces significant competition both in making loans and in
attracting deposits. The Bank's market area has a high density of financial     
institutions, many of which are branches of significantly larger institutions   
that have greater financial resources than the Bank, and all of which are       
competitors of the Bank to varying degrees. The Bank's competition for loans    
comes principally from commercial banks, savings banks, savings and loan        
associations, mortgage banking companies, credit unions, insurance companies and
other financial service companies. Its most direct competition for deposits has 
historically come from commercial banks, savings banks, savings and loan        
associations and credit unions. The Bank faces additional competition for       
deposits from non-depository competitors such as the mutual fund industry,      
securities and brokerage firms and insurance companies. Competition may also    
increase as a result of the lifting of restrictions on the interstate operations
of financial institutions.                                                      

Lending Activities                                                              

         General. The principal lending activity of the Bank is the origination,
for retention in its portfolio, of fixed-rate and adjustable-rate mortgage loans
collateralized by one- to four-family residential real estate located within its
primary market area. To a lesser extent, the Bank also originates commercial    
real estate loans, home equity loans, consumer loans and commercial business    
loans.                                                                          

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   In an effort to manage the interest rate risk associated with its
predominantly fixed-rate loan portfolio, the Bank maintains high levels of      
liquidity, and, where possible, matches the funding of fixed-rate residential   
mortgages with lower-costing core savings accounts. In addition, in originating 
residential fixed-rate loans, the Bank has been successful in marketing and     
originating such loans with 15 year terms. Currently, the substantial majority  
of residential fixed-rate loans are being originated with 15 years terms.       
Finally, the Bank has attempted to market to its customers shorter term maturity
features, such as fixed-rate residential mortgage loans with "bi-weekly"        
mortgage payments, where the borrower makes the equivalent of an extra monthly  
payment per year by paying half the monthly mortgage payment every two weeks.   
The accelerated principal amortization schedules of these loans have helped     
ameliorate the interest rate risk that is inherent in a community based bank's  
residential lending portfolio. The accelerated repayment schedule results in    
significant savings to the borrower and allows for a more rapid increase in home
equity.                                                                         

     Loan Portfolio Composition. Set forth below is selected information
concerning the composition of the Bank's loan portfolio in dollar amounts and in
percentages (before deductions for deferred fees and costs, unearned discounts  
and allowances for losses) as of the dates indicated.                           

                                                                [Download Table]

                                                       June 30,                    
                                         ------------------------------------------
                                                1998                  1997         
                                         ------------------     -------------------
                                         Amount     Percent     Amount      Percent
                                         ------     -------     ------      -------
                                                  (Dollars in Thousands)           
                                                                                   
Real Estate Loans:                                                                 
   One- to four-family ................. $ 64,705     79.69%  $61,008      79.66%  
   Commercial ..........................    4,521      5.57     5,343       6.98   
   Construction and land ...............      798       .98       497        .65   
   Multi-family ........................      388       .48       388        .51   
                                         --------    ------   --------    -------- 
     Total real estate loans ...........   70,412     86.72    67,236      87.80   
                                         --------    ------   --------    -------- 

Consumer Loans:                                                                    
   Installment (1) .....................    4,172      5.14     3,758       4.90   
   Home equity .........................    4,727      5.82     4,053       5.29   
   Passbook ............................      544       .67       507        .66   
                                         --------    ------   --------    -------- 
     Total consumer loans ..............    9,443     11.63     8,318      10.85   

Commercial Business Loans ..............    1,336     1 .65     1,032       1.35   
                                         --------    ------   --------    -------- 
     Total consumer and commercial                                                 
       business loans ..................   10,779     13.28     9,350      12.20   
                                         --------    ------   --------    -------- 
     Total gross loans .................   81,191    100.00%   76,586     100.00%  
                                         --------    ------   --------    -------- 
                                         --------    ------   --------    -------- 

Less:                                                                              
   Deferred fees and discounts .........     (203)               (216)             
   Allowance for losses ................     (728)               (723)             
                                         --------             --------             

     Total loans receivable, net ....... $ 80,260             $75,647              
                                         --------             --------             
                                         --------             --------             

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

(1) Includes direct automobile loans (on both new and used automobiles) and     
personal loans.                                                                 

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        The following table shows the composition of the Bank's loan portfolio
by fixed- and adjustable-rate at the dates indicated.                           

                                                                [Download Table]


                                                     June 30,                
                                     --------------------------------------- 
                                               1998              1997        
                                      -------------------  ------------------
                                      Amount      Percent Amount      Percent
                                      ------      ------- ------      -------
                                                 (Dollars in Thousands)      

                                                                             
Fixed-Rate Loans:                                                            
   Real Estate Loans:                                                        
     One- to four-family .........   $ 46,028     56.69% $ 36,581     47.78% 
     Commercial ..................      1,436      1.77     1,744      2.28  
     Construction and land .......        760       .94       497       .64  
     Multi-family ................        157       .19       135       .18  
                                     --------     ------ --------     ------ 
       Total real estate loans ...     48,381     59.59    38,957     50.88  
                                     --------     ------ --------     ------ 

   Consumer Loans:                                                           
     Installment (1) .............      4,172      5.14     3,758      4.91  
     Home equity .................      4,727      5.82     4,053      5.29  
     Passbook ....................        544       .67       507       .66  
   Commercial Business Loans .....      1,336      1.65     1,032      1.35  
                                     --------     ------ --------     ------ 
     Total fixed-rate loans ......     59,160     72.87    48,307     63.09  
                                     --------     ------ --------     ------ 

Adjustable-Rate Loans:                                                       
   Real estate loans:                                                        
     One- to four-family .........     18,677     23.00    24,429     31.90  
     Multi-family ................        231       .28       251       .31  
     Commercial real estate ......      3,085      3.80     3,599      4.70  
     Construction and land .......         38       .05        --        --  
                                     --------     ------ --------     ------ 
       Total adjustable rate loans     22,031     27.13    28,279     36.91  
                                     --------     ------ --------     ------ 

       Total loans ...............     81,191    100.00%   76,586    100.00% 
                                     --------     ------ --------     ------ 
                                     --------     ------ --------     ------ 

Less:                                                                        
   Deferred fees and discounts ...       (203)               (216)           
   Allowance for loan losses .....       (728)               (723)           
                                     --------            --------            

     Total loans receivable, net .   $ 80,260            $ 75,647            
                                     --------            --------            
                                     --------            --------            

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

(1) Includes direct automobile loans (on both new and used automobiles) and     
personal loans.                                                                 

   One- to Four-Family Residential Loans. The Bank's primary lending
activity is the origination, for retention in the Bank's portfolio, of one- to  
four-family residential mortgage loans secured by property located in the Bank's
primary lending area. Generally, one- to four-family residential mortgage loans 
are made in amounts up to 80% of the lesser of the appraised value or purchase  
price of the property. However, the Bank will originate one- to four-family     
residential mortgage loans with loan-to-value ratios of up to 95%, with private 
mortgage insurance required (except for qualifying first-time home buyers, for  
whom the Bank will originate loans with 90% loan-to-value ratios without private
mortgage insurance). Generally, residential mortgage loans are originated for   
terms of up to 25 years, though in recent years the Bank has been successful in 
marketing and originating the substantial majority of such loans with 15-year   
terms. One- to four-family fixed-rate loans are offered with both a monthly and 
bi-weekly payment feature. The Bank generally requires fire and casualty        
insurance, the establishment of a mortgage escrow account for the payment of    
real                                                                            

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estate taxes, hazard and flood insurance, as well as title insurance on all     
properties securing real estate loans made by the Bank.                         

    The Bank currently offers one- to four-family residential mortgage
loans with fixed and adjustable interest rates. Originations of fixed-rate loans
versus adjustable-rate loans are monitored on an ongoing basis and are affected 
significantly by the level of market interest rates, customer preference, the   
Bank's interest rate gap position, and loan products offered by the Bank's      
competitors. Particularly, in a relatively low interest rate environment,       
borrowers may prefer fixed-rate loans to adjustable-rate loans. Single family   
residential real estate loans often remain outstanding for significantly shorter
periods than their contractual terms because borrowers may refinance or prepay  
loans at their option. The average length of time that the Bank's single family 
residential mortgage loans remain outstanding varies significantly depending    
upon trends in market interest rates and other factors.                         

         The Bank's adjustable-rate mortgage ("ARM") loans currently provide for
maximum rate adjustments of 150 basis points per year and 600 basis points over 
the term of the loan. The Bank offers ARM loans with initial interest rates that
are below market, referred to as "teaser rates." However, in underwriting such  
loans, borrowers are qualified at the full index rate. The Bank's ARM loans     
adjust every year. After origination, the interest rate on such ARM loans is    
reset based upon a contractual spread or margin above the average yield on      
one-year United States Treasury securities, adjusted to a constant maturity (the
"U.S. Treasury Constant Maturity Index"), as published weekly by the Federal    
Reserve Board.                                                                  

        ARM loans decrease the risk associated with changes in market interest
rates by periodically repricing, but involve other risks because as interest    
rates increase, the underlying payments by the borrower increase, thus          
increasing the potential for default by the borrower. At the same time, the     
marketability of the underlying collateral may be adversely affected by higher  
interest rates. Upward adjustment of the contractual interest rate is also      
limited by the maximum periodic and lifetime interest rate adjustment permitted 
by the terms of the ARM loans, and, therefore, is potentially limited in        
effectiveness during periods of rapidly rising interest rates. At June 30, 1998,
23.0% of the Bank's loan portfolio consisted of one- to four-family residential 
loans with adjustable interest rates.                                           

        The Bank originates construction/permanent loans to homeowners for the
purpose of construction of primary and secondary residences. The Bank issues a  
commitment and has one closing which encompasses both the construction phase and
permanent financing. The construction phase is a maximum term of six months and 
the interest charged is the rate as stated in the commitment, with loan-to-value
ratios of up to 80% (or up to 95% with private mortgage insurance), of the      
completed project. The Bank generally does not originate loans secured by raw   
land.                                                                           

       Construction lending generally involves a greater degree of risk than
other one- to four-family mortgage lending. The repayment of the construction   
loan is, to a great degree, dependent upon the successful and timely completion 
of the construction of the subject property. Construction delays may further    
impair the borrower's ability to repay the loan.                                

 The Bank's residential mortgage loan originations are generally
obtained from the Bank's loan representatives operating in its branch offices   
through their contacts with existing or past loan customers, depositors of the  
Bank, referrals from attorneys and accountants who refer loan applications from 
the general public, and local realtors.                                         

      All one- to four-family residential mortgage loans originated by the
Bank include "due-on-sale" clauses, which give the Bank the right to declare a  
loan immediately due and payable in the event that, among other things, the     
borrower sells or otherwise disposes of the real property subject to the        
mortgage and the loan is not repaid.                                            

         At June 30, 1998, $64.7 million, or 79.7% of the Bank's loan portfolio,
consisted of one- to four-family residential mortgage loans. Approximately      
$666,000 of such loans (representing 16 loans) were included in nonperforming   
loans as of that date. See "Delinquencies and Classified Assets-Loans Past Due  
and Nonperforming Assets."                                                      

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      Commercial Real Estate and Multifamily Loans. At June 30, 1998, $4.5
million, or 5.6%, of the total loan portfolio consisted of commercial real      
estate loans. Commercial real estate loans are secured by office buildings,     
mixed-use properties and other commercial properties. The Bank originates fixed-
and adjustable-rate commercial mortgage loans with maximum terms of up to 20    
years. The maximum loan-to-value ratio of commercial real estate loans is       
generally 75%. At June 30, 1998, the largest commercial mortgage loan had a     
principal balance of $445,000 and was secured by a medical arts building.       

    In underwriting commercial real estate loans, the Bank reviews the
expected net operating income generated by the real estate to ensure that it is 
generally at least 110% of the amount of the monthly debt service; the age and  
condition of the collateral; the financial resources and income level of the    
borrower; and the borrower's business experience. The Bank's policy is to       
require personal guarantees from all commercial real estate borrowers.          

        Loans secured by commercial real estate generally are larger than one-
to four-family residential loans and involve a greater degree of risk.          
Commercial mortgage loans often involve large loan balances to single borrowers 
or groups of related borrowers. Payments on these loans depend to a large degree
on the results of operations and management of the properties or underlying     
businesses, and may be affected to a greater extent by adverse conditions in the
real estate market or the economy in general. Accordingly, the nature of        
commercial real estate loans makes them more difficult for Bank management to   
monitor and evaluate.                                                           

   The Bank originates a limited number of multi-family loans, which
totalled $338,000, or 0.48% of the Bank's total loans at June 30, 1998.         
Multi-family loans are generally secured by apartment buildings and condominiums
located in the Bank's primary market area. The Bank's underwriting practices and
the risks associated with multi-family loans do not differ substantially from   
that of commercial real estate loans.                                           

      Consumer Loans. The Bank's consumer loans consist of direct loans on
new and used automobiles, personal loans (either secured or unsecured), home    
equity loans, and other consumer loans (consisting of passbook loans, unsecured 
home improvement loans and recreational vehicle loans). At June 30, 1998,       
consumer loans totaled $9.4 million, or 11.6% of the total loan portfolio.      
Consumer loans (other than home equity loans) are originated at fixed rates with
terms to maturity of one to five years.                                         

       Consumer loans generally have shorter terms and higher interest rates
than one- to four-family mortgage loans. In addition, consumer loans expand the 
products and services offered by the Bank to better meet the financial services 
needs of its customers. Consumer loans generally involve greater credit risk    
than residential mortgage loans because of the difference in the underlying     
collateral. Repossessed collateral for a defaulted consumer loan may not provide
an adequate source of repayment of the outstanding loan balance because of the  
greater likelihood of damage to loss of or depreciation in the underlying       
collateral. The remaining deficiency often does not warrant further substantial 
collection efforts against the borrower beyond obtaining a deficiency judgment. 
In addition, consumer loan collections depend on the borrower's personal        
financial stability. Furthermore, the application of various federal and state  
laws, including federal and state bankruptcy and insolvency laws, may limit the 
amount that can be recovered on such loans.                                     

  The Bank's underwriting procedures for consumer loans include an
assessment of the applicant's credit history and the ability to meet existing   
and proposed debt obligations. Although the applicant's creditworthiness is the 
primary consideration, the underwriting process also includes a comparison of   
the value of the security, to the proposed loan amount. The Bank underwrites its
consumer loans internally, which the Bank believes limits its exposure to credit
risks associated with loans underwritten or purchased from brokers and other    
external sources.                                                               

        The Bank offers fixed-rate home equity loans that are secured by the
borrower's residence. Home equity loans are generally underwritten with terms   
not to exceed 15 years and under the same criteria that the Bank uses to        
underwrite one- to four-family fixed rate loans. Home equity loans may be       
underwritten with terms not to exceed 15 years and with a loan to value ratio of
80% when combined with the principal balance of the existing mortgage loan. The 
maximum amount of a home equity loan may not exceed $50,000 unless approved by  
the Board of Trustees. The Bank appraises the property securing the loan at the 
time of the loan application (but not thereafter) in order to determine the     
value of                                                                        

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the property securing the home equity loans. At June 30, 1998, the outstanding  
balance of home equity loans totaled $4.7 million, or 5.8% of the Bank's total  
loan portfolio.                                                                 

         Commercial Business Loans. The Bank also originates commercial business
loans up to 10 years at fixed rates. The Bank attributes growth in this         
portfolio to its ability to offer borrowers senior management attention as well 
as timely and local decision-making on commercial loan applications. The        
decision to grant a commercial business loan depends primarily on the           
creditworthiness and cash flow of the borrower (and any guarantors) and         
secondarily on the value of and ability to liquidate the collateral which       
consists of receivables, inventory and equipment. The Bank generally requires   
annual financial statements and tax returns from its commercial business        
borrowers and personal guarantees from the commercial business borrowers. The   
Bank also generally requires an appraisal of any real estate that secures the   
loan. At June 30, 1998, the Bank had $1.3 million of commercial business loans  
which represented 1.7% of the total loan portfolio. On such date, the average   
balance of the Bank's commercial business loans was approximately $25,000. The  
largest commercial business lending relationship had a balance of $255,000 and  
represented a loan to a local fire protection district secured by a fire truck. 
At June 30, 1998, the Bank's commercial loan portfolio included seven loans     
secured by fire trucks.                                                         

  Commercial business lending generally involves greater risk than
residential mortgage lending and involves risks that are different from those   
associated with residential and commercial real estate lending. Real estate     
lending is generally considered to be collateral based, with loan amounts based 
on predetermined loan to collateral values, and liquidation of the underlying   
real estate collateral is viewed as the primary source of repayment in the event
of borrower default. Although commercial business loans may be collateralized by
equipment or other business assets, the liquidation of collateral in the event  
of a borrower default is often an insufficient source of repayment because      
equipment and other business assets may be obsolete or of limited use, among    
other things. Accordingly, the repayment of a commercial business loan depends  
primarily on the creditworthiness of the borrower (and any guarantors), while   
liquidation of collateral is a secondary and often insufficient source of       
repayment.                                                                      

Loan Maturity Schedule. The following table sets forth certain
information as of June 30, 1998 regarding the amount of loans maturing or       
repricing in the Bank's portfolio. Adjustable-rate loans are included in the    
period in which interest rates are next scheduled to adjust rather than the     
period in which they contractually mature, and fixed-rate loans are included in 
the period in which the final contractual repayment is due.                     

        The following table illustrates the future maturities of such loans at
June 30, 1998.                                                                  

                                                        [Enlarge/Download Table]


                                           1 Year   3 Years    5 Years  10 Years                    
                                 Within    through  through     through through   Beyond            
                                 1 Year    3 Years  5 Years    10 years 20 years  20 Years   Total  
                                 ------    -------  -------    -------- --------  --------   -----  
                                                            (In Thousands)                          
                                                                                                    
Real Estate Loans:                                                                                  
   One-to four- family          $18,706   $   278   $   651   $ 8,375   $28,473   $ 8,222   $64,705 
   Home equity                       40       345     1,173     1,921     1,248      --       4,727 
   Multi-family                     231        --        --       128        29      --         388 
   Commercial                     3,359        49        82       444       587      --       4,521 
   Construction and land loans     --          --        --        --       358       440       798 
                                -------   -------   -------   -------   -------   -------   --------
     Total real estate loans    $22,336   $   672   $ 1,906   $10,868   $30,695   $ 8,662   $75,139 
                                -------   -------   -------   -------   -------   -------   --------
                                -------   -------   -------   -------   -------   -------   --------

   Consumer loans                   802     2,022     1,765        83        44      --       4,716 

   Commercial business loans        143       210       439       544        --      --       1,336 
                                -------   -------   -------   -------   -------   -------   --------

Total loan portfolio            $ 23,281  $ 2,904   $ 4,110   $11,495   $30,739   $ 8,662   $81,191 
                                -------   -------   -------   -------   -------   -------   --------
                                -------   -------   -------   -------   -------   -------   --------

The total amount of the above loans due after June 30, 1999 which have
predetermined interest rates is $57,910, while the total amount of loans due    
after such dates which have adjustable interest rates is $0.                    

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   The following table sets forth the loan origination and repayment
activities of the Bank for the periods indicated. The Bank did not purchase or  
sell any loans during the periods presented.                                    

                                                        [Enlarge/Download Table]


                                                                       Years Ended June 30,
                                                                          1998    1997     
                                                                        -------   -----    
                                                                           (In Thousands)  
                                                                                           
Originations by Type:                                                                      
   Adjustable rate:                                                                        
   One- to four-family ...............................................  $   742   $ 1,856  
   Commercial real estate ............................................       45      --    
                                                                        --------  ---------

       Total adjustable rate .........................................      787     1,856  
                                                                        --------  ---------

   Fixed rate:                                                                             
   One- to four-family ...............................................   15,030     9,535  
   Commercial real estate ............................................      150       586  
   Construction and land .............................................    2,930     2,605  
   Home equity .......................................................    2,064     1,996  
   Installment .......................................................    3,194     3,785  
   Commercial business ...............................................      350       568  
   Passbook ..........................................................      492       373  
                                                                        --------  ---------

       Total fixed-rate ..............................................   24,210    19,448  
                                                                        --------  ---------

       Total loans originated ........................................  $24,997   $21,304  
                                                                        --------  ---------

Repayments:                                                                                
   One- to four-family ...............................................   12,075     9,268  
   Commercial real estate ............................................    1,017         5  
   Construction and land .............................................    2,629     3,101  
   Home equity .......................................................    1,390     1,670  
   Installment .......................................................    2,780     3,208  
   Commercial business ...............................................       46       362  
   Passbook ..........................................................      455       506  
                                                                        --------  ---------

     Total principal repayments ......................................   20,392    18,120  
                                                                        --------  ---------

   Net increase (decrease) ...........................................  $ 4,605   $ 3,184  
                                                                        --------  ---------
                                                                        --------  ---------

Loan Approval Procedures and Authority. The Board of Trustees 
establishes the lending policies and loan approval limits of the Bank. Loan     
officers generally have the authority to originate mortgage loans, consumer     
loans and commercial business loans up to amounts established for each lending  
officer. All residential loans over $200,000, however, must be approved by the  
Executive Committee or the full Board of Trustees.                              

      The Board annually approves independent appraisers used by the Bank.
For larger loans, the Bank may require an environmental site assessment to be   
performed by an independent professional for all non-residential mortgage loans.
It is the Bank policy to require hazard insurance on all mortgage loans.        

        Loan Origination Fees and Other Income. In addition to interest earned
on loans, the Bank receives loan origination fees. Such fees and costs vary with
the volume and type of loans and commitments made and purchased, principal      
repayments, and competitive conditions in the mortgage markets, which in turn   
respond to the demand and availability of money.                                

    In addition to loan origination fees, the Bank also receives other
income that consists primarily of deposit transaction account service charges   
and late charges. The Bank also collects fees for originating savings bank life 
insurance on an agency basis and for referring student loan borrowers to Sallie 
Mae. Finally, the Bank installs,                                                

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maintains and services merchant bankcard equipment for local retailers and is   
paid a percentage of the transactions processed by such equipment.              

Loans-to-One Borrower. Savings banks are subject to the same  
loans-to-one borrower limits as those applicable to national banks, which under 
current regulations restrict loans to one borrower to an amount equal to 15% of 
unimpaired net worth on an unsecured basis, and an additional amount equal to   
10% of unimpaired net worth if the loan is secured by readily marketable        
collateral (generally, financial instruments and bullion, but not real estate). 
The Bank's policy provides that loans to one borrower (or related borrowers)    
should not exceed 10% of the Bank's capital and reserves.                       

      At June 30, 1998, the largest aggregate amount loaned by the Bank to
one borrower consisted of $507,000, which consisted of a commercial real estate 
loan of $444,650 and a commercial business loan of $62,356. The loans comprising
the lending relationship were performing in accordance with their terms.        

Delinquencies and Classified Assets                                             

       Collection Procedures. A computer generated late notice is sent and a
2% late charge is assessed when a payment is 15 days late. A second notice will 
be incorporated in the next month's billing notice, approximately 21 days after 
the first due payment. Accounts thirty days or more past due will be reviewed by
the collection manager and receive individual attention as required, including  
collection letters and telephone calls. Accounts that have a history of         
consistent late or delinquent payments will be monitored closely by the         
collection manager to avoid further deterioration. Accounts two or more payments
past due are reported to the Board of Trustees for consideration of foreclosure 
action. With respect to consumer loans, a late notice is sent and a late charge 
is assessed after 10 days (or, in the case of home equity loans, 15 days) after 
payment is due. A second notice is sent after 15 days (in the case of home      
equity loans, 25 days) thereafter. Loans 30 days or more past due are reviewed  
by the collection manager for individual attention, including collection letters
and telephone calls. Accounts three or more payments past due are reported to   
the Board of Trustees and are subject to legal action and repossession of       
collateral.                                                                     

   Loans Past Due and Non-performing Assets. Loans are reviewed on a
regular basis. Management determines that a loan is impaired when it is probable
that at least a portion of the loan will not be collected due to an irreversible
deterioration in the financial condition of the borrower or the value of the    
underlying collateral. When a loan is determined to be impaired, the measurement
of the loan is based on present value of estimated future cash flows, except    
that all collateral-dependent loans are measured for impairment on the fair     
value of the collateral. Management places loans on nonaccrual status once the  
loans have become over 90 days delinquent. Nonaccrual is defined as a loan in   
which collectibility is questionable and therefore interest on the loan will no 
longer be recognized on an accrual basis. Instead, such interest is recognized  
on a cash basis until such time as the borrower has brought the loan to         
nondelinquent status. At June 30, 1998, the Bank had non-performing loans of    
$884,000, and a ratio of non-performing loans to total loans of 1.10%.          

       Real estate acquired as a result of foreclosure or by deed in lieu of
foreclosure is classified as real estate owned ("REO") until such time as it is 
sold. When real estate is acquired through foreclosure or by deed in lieu of    
foreclosure, it is recorded at its fair value, less estimated costs of disposal.
If the value of the property is less than the loan, less any related specific   
loan loss provisions, the difference is charged against the allowance for loan  
losses. Any subsequent write-down of REO is charged against earnings. At June   
30, 1998, the Bank's REO totalled $124,000, and its ratio of non-preforming     
assets to total assets was 0.72%.                                               

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 The following table sets forth delinquencies in the Bank's loan
portfolio at June 30, 1998. When a loan is delinquent 90 days or more, the Bank 
fully reverses all accrued interest thereon and ceases to accrue interest       
thereafter. For all the dates indicated, the Bank did not have any material     
restructured loans within the meaning of SFAS 114.                              

                                                        [Enlarge/Download Table]


                                                  60-89 Days                       90 Days and Over     
                                         ------------------------------  -------------------------------
                                                              Percent                           Percent 
                                                              of Loan                           of Loan 
                                          Number   Amount     Category     Number    Amount     Category
                                          ------   ------     --------     ------    ------     --------
                                                                              (Dollars in Thousands)    
                                                                                                        
Real Estate:                                                                                            
   One- to four-family .................       8   $  387      75.88%         16    $  666       75.34% 
   Multi-family ........................       1      123      24.12          --        --          --  
   Commercial ..........................      --       --         --           2        91       10.29  
   Construction and land loans .........      --       --         --          --        --       --     

Consumer ...............................      --       --         --           4        20        2.27  
Commercial business ....................      --       --         --           3       107       12.10  
                                          ------   ------     ------       -----    ------      ------- 

     Total loan delinquencies ..........       9   $  510     100.00%         25    $  884      100.00% 
                                          ------   ------     ------       -----    ------      ------- 
                                          ------   ------     ------       -----    ------      ------- 

                                                                [Download Table]


                                             Total Delinquent Loans         
                                        ------------------------------------

                                                                Percent     
                                                                of Loan     
                                          Number    Amount      Category    
                                          ------    ------      --------    
                                                                            
Real Estate:                                                                
   One- to four-family .................     24    $1,053       75.54%      
   Multi-family ........................      1       123        8.82       
   Commercial ..........................      2        91        6.53       
   Construction and land loans .........     --        --          --       

Consumer ...............................      4        20        1.43       
Commercial business ....................      3       107        7.68       
                                            ----   ------      -------      

     Total loan delinquencies ..........     34    $1,394      100.00%      
                                            ----   ------      -------      
                                            ----   ------      -------      

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     Nonaccrual Loans and Nonperforming Assets. The following table sets
forth information regarding nonaccrual loans and other non-performing assets.   
The Bank had no accruing loans delinquent more than 90 days at June 30, 1998 or 
1997.                                                                           

                                                                [Download Table]


                                                             June 30,      
                                                      ------------------   
                                                        1998       1997    
                                                      ------------------   
                                                     (Dollars in Thousands)
                                                                           
Nonaccruing loans:                                                         
   One- to four-family ...............................   $  666    $  293  
   Commercial real estate ............................       91       296  
   Consumer ..........................................       20         5  
   Commercial business ...............................      107       139  
                                                         ------    ------- 

     Total ...........................................      884       733  
                                                         ------    ------- 

Foreclosed assets:                                                         
   One- to four-family ...............................       --        32  
   Multi-family ......................................       --        38  
   Nonfarm, nonresidential properties ................      124        --  

     Total ...........................................   $  124    $   70  
                                                         ------    ------- 
                                                         ------    ------- 

Total non-performing assets ..........................   $1,008    $  803  
                                                         ------    ------- 
                                                         ------    ------- 
Total as a percentage of total assets ................     0.72%      0.61%

       During the year ended June 30, 1998, gross interest income of $40,000
would have been recorded on nonaccruing loans under their original terms if the 
loans had been current throughout the period. No interest income was recorded on
nonaccruing loans or on accruing loans more than 90 days delinquent during the  
year ended June 30, 1998.                                                       

      Classification of Assets. Consistent with regulatory guidelines, the
Bank provides for the classification of loans and other assets considered to be 
of lesser quality. Such ratings coincide with the "Substandard", "Doubtful" and 
"Loss" classifications used by federal regulators in their examination of       
financial institutions. Generally, an asset is considered Substandard if it is  
inadequately protected by the current net worth and paying capacity of the      
obligors and/or the collateral pledged. Substandard assets include those        
characterized by the distinct possibility that the insured financial institution
will sustain some loss if the deficiencies are not corrected. Assets classified 
as Doubtful have all the weaknesses inherent in assets classified Substandard   
with the added characteristic that the weaknesses present make collection or    
liquidation in full, on the basis of currently existing facts, highly           
questionable and improbable. Assets classified as Loss are those considered     
uncollectible and of such little value that their continuance as assets without 
the establishment of a specific loss reserve and/or charge-off is not warranted.
Assets that do not currently expose the insured financial institution to        
sufficient risk to warrant classification in one of the aforementioned          
categories but otherwise possess weaknesses are designated "Special Mention."   

  When the Bank classifies problem assets as either Substandard or
Doubtful, it establishes general valuation allowances or "loss reserves" in an  
amount deemed prudent by management. General allowances represent loss          
allowances that have been established to recognize the inherent risk associated 
with lending activities, but which, unlike specific allowances, have not been   
allocated to particular problem assets. When the Bank classifies problem assets 
as "Loss," it is required either to establish a specific allowance for losses   
equal to 100% of the amount of assets so classified, or to charge-off such      
amount. The Bank's determination as to the classification of its assets and the 
amount of its valuation allowance is subject to review by its regulatory        
agencies, which can order the establishment of additional general or specific   
loss allowances. The Bank reviews its portfolio monthly to determine whether any
assets require classification in accordance with applicable regulations.        

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        On the basis of management's review of its assets, at June 30, 1998,
the Bank had classified a total of $113,000 of loans as follows:                

                                                                [Download Table]


                                    At June 30, 1998 
                                     (In Thousands)  
                                                     
Special mention.......................  $      --    
Substandard...........................        113    
Doubtful assets.......................         --    
Loss assets...........................         --    
                                        -------------

   Total classified loans               $     113    
                                        -------------
                                        -------------

General loss allowance                  $     511    
                                        -------------
                                        -------------

Specific loss allowance                 $     104    
                                        -------------
                                        -------------

Charge-offs...........................  $     126    
                                        -------------
                                        -------------

         Allowance for Loan Losses. The allowance for loan losses is established
through a provision for loan losses based on management's evaluation of the risk
inherent in the loan portfolio, the composition of the loan portfolio, specific 
impaired loans and current economic conditions. Such evaluation, which includes 
a review of all loans on which full collectibility may not be reasonably        
assured, considers among other matters, the estimated net realizable value or   
the fair value of the underlying collateral, economic conditions, historical    
loan loss experience and other factors that warrant recognition in providing for
an adequate loan loss allowance. In addition, various regulatory agencies, as an
integral part of their examination process, periodically review the Bank's      
allowance for loan losses and valuation of REO. Such agencies may require the   
Bank to recognize additions to the allowance based on their judgment about      
information available to them at the time of their examination. The allowance   
for loan losses is increased by a provision for loan losses (which results in a 
charge to noninterest expense) and is reduced by net charge-offs. The Bank's    
provision for loan losses is described in "Management's Discussion and Analysis 
of Financial Condition and Results of Operations." At June 30, 1998, the total  
allowance was $728,000, which amounted to 0.91% of total loans and 82.17% of    
nonperforming loans. Management will continue to monitor and modify the level of
the allowance for loan losses in order to maintain it at a level which          
management considers adequate to provide for potential loan losses. For the     
years ended June 30, 1998 and 1997, the Bank had charge-offs of $126,000 and    
$11,000, respectively, against this allowance.                                  

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     Analysis of the Allowance For Loan Losses. The following table sets
forth the analysis of the allowance for loan losses for the periods indicated.  

                                                                [Download Table]


                                                       Years Ended June 30, 
                                                        1998         1997   
                                                      (Dollars in Thousands)

                                                                            
Balance at beginning of period ......................   $723    $ 597       
                                                      ------   ------       

Charge-offs:                                                                
   One- to four-family ..............................     18       --       
   Commercial real estate ...........................     70       --       
   Consumer .........................................     28       11       
   Commercial business ..............................     10       --       
                                                      ------   -------      
       Total charge-offs ............................    126       11       
                                                      ------   -------      

Recoveries:                                                                 
   One- to four-family ..............................    --        12       
   Consumer .........................................     11       --       
                                                      ------   -------      
       Total recoveries .............................     11       12       
                                                      ------   -------      

Net charge-offs .....................................    115       (1)      
Additions charged to operations .....................    120      125       
                                                      ------   -------      
Balance at end of period ............................   $728     $723       
                                                      ------   -------      
                                                      ------   -------      

Ratio of net charge-offs during the period to                               
   average loans outstanding during the period ......   0.15%    0.01%      
                                                      ------   -------      
                                                      ------   -------      

Ratio of net charge-offs during the period to                               
   average non-performing assets ....................  12.74%    0.15%      
                                                      ------   -------      
                                                      ------   -------      

         Allocation of Allowance for Loan Losses. The following table sets forth
the allocation of the allowance for loan losses by loan category for the periods
indicated. The allowance is allocated to each loan category based on historical 
loss experience and economic conditions. The unallocated portions of the        
allowance represent general reserves for unused lines of credit and inherent    
risk associated with increased volume in lending transactions.                  

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                                                        [Enlarge/Download Table]


                                                                      June 30,                                
                                         -------------------------------------------------------------------- 
                                                       1998                               1997                
                                         -------------------------------     -------------------------------- 
                                                                    Percent                           Percent 
                                                                   of Loans                          of Loans 
                                                       Loan         in Each                Loan       in Each 
                                          Amount of   Amounts      Category   Amount of   Amounts    Category 
                                          Loan Loss     by         to Total   Loan Loss     by       to Total 
                                          Allowance  Category       Loans     Allowance  Category      Loans  
                                          ---------  --------      --------   ---------  --------    ---------
                                                                      (Dollars in Thousands)                  

                                                                                                              
One- to four-family..................... $     318  $  64,705         79.7%  $    293  $  60,981       79.6%  
Multi-family............................         1        388          0.5          1        195        0.3   
Commercial real estate..................        78      4,521          5.6         88      5,343        7.0   
Construction and land ..................         2        798          1.0          1        497        0.6   
Consumer................................        59      4,064          5.0         52      3,619        4.7   
Commercial business.....................        62      1,336          1.6         45      1,032        1.3   
Home equity loans.......................        14      4,727          5.8         12      4,053        5.3   
Passbook loans..........................         5        544          0.7          5        507        0.7   
Specific................................       104        108          0.1        205        359        0.5   
Unallocated.............................        85                                           21               
                                         ---------  ---------        ------- --------   --------       ------ 
   Total allowance for loan losses       $     728  $  81,191        100.0%  $    723   $ 76,586       100.0% 
                                         ---------  ---------        ------- --------   --------       ------ 
                                         ---------  ---------        ------- --------   --------       ------ 

Securities Investment Activities                                                

  Given the Bank's substantial portfolio of fixed-rate residential
mortgage loans, the Bank maintains high balances of liquid investments for the  
purpose of reducing interest rate risk. See "Management's Discussion and        
Analysis of Financial Condition and Results of Operations - Management of       
Interest Rate Risk". The securities investment policy is established by the     
Board of Trustees. This policy dictates that investment decisions will be made  
based on the safety of the investment, liquidity requirements, potential        
returns, cash flow targets, and desired risk parameters. In pursuing these      
objectives, management considers the ability of an investment to provide        
earnings consistent with factors of quality, maturity, marketability and risk   
diversification.                                                                

       The Bank's current policies generally limit securities investments to
U.S. Government and agency securities, federal funds sold, municipal bonds,     
corporate debt obligations and mutual funds. The two mutual funds in which the  
Bank invests have portfolios comprised primarily of adjustable-rate             
mortgage-backed securities and were purchased by the Bank to provide            
interest-earning liquid funds and an adjustable interest rate. In addition, the 
Bank's policy permits investments in mortgage-backed securities, including      
securities issued and guaranteed by Fannie Mae, Freddie Mac, and GNMA, and      
collateralized mortgage obligations ("CMOs"). The Bank's current securities     
investment strategy utilizes a risk management approach of diversified investing
among three categories: short-, intermediate- and long-term. The emphasis of    
this approach is to increase overall investment securities yields while managing
interest rate risk. The Bank will only invest in securities rated A or higher by
at least one nationally recognized rating agency (or securities attaining such  
rating as a result of guarantees by insurance companies), with the exception of 
occasional investments in smaller non-rated local bonds. The Bank does not      
engage in any hedging transactions, such as interest rate swaps or caps.        

        At June 30, 1998, the Bank had $47.8 million in investment securities,
or 34.1% of total assets. SFAS No. 115 requires the Bank to designate its       
securities as held to maturity, available for sale or trading, depending on the 
Bank's ability and intent regarding its investments. As of June 30, 1998, the   
entire investment securities portfolio was classified as available for sale. At 
June 30, 1998, the Bank's mortgage-backed securities portfolio totaled $5.2     
million, or 3.7% of total assets and the Bank's asset-backed securities         
portfolio totalled $6.3 million, or 4.5% of total assets.                       

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     Book Value of Investment Securities. The following table sets forth
certain information regarding the investment securities and other interest      
earning assets as of the dates indicated.                                       

                                                        [Enlarge/Download Table]


                                                                        June 30,               
                                                     ------------------------------------------
                                                               1998                  1997      
                                                     ------------------     -------------------
                                                        Book       % of       Book         % of
                                                       Value      Total      Value        Total
                                                       -----      -----      -----        -----
                                                                      (Dollars in Thousands)   

                                                                                               
Investment securities available for sale:                                                      
   U.S. government securities ......................  $12,969      27.4%    $18,532      43.2% 
   Federal agency obligations ......................    8,569      18.1       7,145      16.7  
   Corporate debt securities .......................    3,736       7.8       3,079       7.3  
   Municipal bonds .................................    7,390      15.6       6,312      14.7  
   Equity securities ...............................       81       0.2         100       0.2  
   Mortgage-backed securities ......................    5,196      11.0       5,221      12.2  
   Asset-backed securities .........................    6,305      13.2         784       1.8  
   Mutual funds ....................................    2,353       5.0       1,644       3.8  
   Other ...........................................       75       0.2          75       0.1  

       Subtotal ....................................   46,674      98.5%     42,892     100.0% 

FHLB stock .........................................      700       1.5          --        --  

   Total investment securities and FHLB stock ......  $47,374     100.0%    $42,892     100.0% 
                                                       ------    ------      ------     -----  
                                                       ------    ------      ------     -----  

     Investment Portfolio Maturities. The following table sets forth the
scheduled maturities, book value, market value and weighted average yields for  
the Bank's investment portfolio at June 30, 1998.                               

                                                        [Enlarge/Download Table]


                                                           At June 30, 1998                             
                                  -----------------------------------------------------------------     
                                   Less Than   1 to 5     5 to 10        Over     Total                 
                                    1 Year      Year       Years      10 Years  Securities              
                                     Book       Book       Book         Book       Book      Market     
                                     Value      Value      Value        Value      Value      Value     
                                   ---------   ------     -------     --------  ----------   ------     
                                                         (Dollars in Thousands)                         

                                                                                                        
U.S. government securities ......  $ 5,731    $ 6,643    $   595    $      --    $ 12,969   $13,190     
Federal agency obligations ......    1,001      7,568       --             --       8,569     8,620     
Mortgage-backed securities ......      270      3,452        343        1,131       5,196     5,189     
Asset-backed securities .........     --        1,203      2,083        3,019       6,305     6,324     
Corporate debt securities .......      100      2,400      1,236           --       3,736     3,799     
Municipal bonds .................      955      3,679      2,756           --       7,390     7,479     
Equity securities ...............       81       --         --             --          81        81     
Mutual funds ....................    2,353       --         --             --       2,353     2,321     
FHLB stock ......................      700       --         --             --         700       700     
Other ...........................       75       --         --             --          75        75     
                                   -------    -------    -------    ----------   -------    ------------

Total securities ................  $11,266    $24,945    $ 7,013    $   4,150    $47,374    $47,778     
                                   -------    -------    -------    ----------   -------    ------------
                                   -------    -------    -------    ----------   -------    ------------

Weighted average yield ..........     6.36%      6.23%      5.65%        6.25%      6.12%        --     
                                   -------    -------    -------    ----------   -------    ------------
                                   -------    -------    -------    ----------   -------    ------------

Mortgage-Backed Securities. The Bank purchases mortgage-backed
securities in order to: (i) generate positive interest rate spreads with minimal
administrative expense; (ii) lower the Bank's credit risk as a result of the    
guarantees provided by Freddie Mac, Fannie Mae, and GNMA; and (iii) increase    
liquidity. At June 30, 1998, mortgage-backed securities (including CMOs) totaled
$5.2 million or 3.7% of total assets, all of which were classified as available 
for sale. At June 30, 1998, all of the mortgage-backed securities were fixed    
rate. The mortgage-backed securities portfolio had coupon rates ranging from    
5.25% to 7.15%, a weighted average yield of 6.13% and a weighted average life   
(including pre-payment assumptions) of 1.85 years at June 30, 1998. The         
estimated market value of the Bank's mortgage-backed securities at June 30, 1998
was $5.2 million, which was $7,000 less than cost.                              

        Mortgage-backed securities are created by the pooling of mortgages and
the issuance of a security with an interest rate that is less than the interest 
rate on the underlying mortgages. Mortgage-backed securities typically          

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represent a participation interest in a pool of single-family or multi-family   
mortgages, although the Bank focuses its investments on mortgage-backed         
securities backed by single-family mortgages. The issuers of such securities    
(generally U.S. Government agencies and government sponsored enterprises,       
including Fannie Mae, Freddie Mac and GNMA) pool and resell the participation   
interests in the form of securities to investors, such as the Bank, and         
guarantee the payment of principal and interest to these investors.             
Mortgage-backed securities generally yield less than the loans that underlie    
such securities because of the cost of payment guarantees and credit            
enhancements. In addition, mortgage-backed securities are usually more liquid   
than individual mortgage loans and may be used to collateralize certain         
liabilities and obligations of the Bank.                                        

      Investments in mortgage-backed securities involve a risk that actual
prepayments will be greater than estimated over the life of the security, which 
may require adjustments to the amortization of any premium or accretion of any  
discount relating to such instruments thereby altering the net yield on such    
securities. There is also reinvestment risk associated with the cash flows from 
such securities or in the event such securities are prepaid. In addition, the   
market value of such securities may be adversely affected by changes in interest
rates.                                                                          

     Management reviews prepayment estimates periodically to ensure that
prepayment assumptions are reasonable considering the underlying collateral for 
the securities at issue and current interest rates and to determine the yield   
and estimated maturity of the Bank's mortgage-backed securities portfolio. Of   
the Bank's $5.2 million mortgage-backed securities portfolio at June 30, 1998,  
$3.7 million with a weighted average yield of 6.20% had contractual maturities  
within five years, $343,000 with a weighted average yield of 5.25% had          
contractual maturities of five to ten years and the remaining $1.1 million with 
a weighted average yield of 6.20% had contractual maturities more than 10 years.
However, the actual maturity of a security may be less than its stated maturity 
due to prepayments of the underlying mortgages. Prepayments that are faster than
anticipated may shorten the life of the security and may result in a loss of any
premiums paid and thereby reduce the net yield on such securities. Although     
prepayments of underlying mortgages depend on many factors, the difference      
between the interest rates on the underlying mortgages and the prevailing       
mortgage interest rates generally is the most significant determinant of the    
rate of prepayments. During periods of declining mortgage interest rates,       
refinancing generally increases and accelerates the prepayment of the underlying
mortgages and the related security. Under such circumstances, the Bank may be   
subject to reinvestment risk because, to the extent that the Bank's securities  
prepay faster than anticipated, the Bank may not be able to reinvest the        
proceeds of such repayments and prepayments at a comparable rate of return.     
Conversely, in a rising interest rate environment prepayments may decline,      
thereby extending the estimated life of the security and depriving the Bank of  
the ability to reinvest cash flows at the increased rates of interest.          

   At June 30, 1998, the Bank's portfolio of asset-backed securities
totalled $6.3 million, or 4.5% of total assets, all of which were classified as 
available for sale. At June 30, 1998, all of the asset-backed securities were   
fixed rate. The portfolio had coupon rates ranging form 5.25% to 7.00%, a       
weighted average yield of 6.37% and a weighted average life (including          
prepayment assumptions) of 1.75 years at June 30, 1998. The estimated market    
value of the Bank's asset-backed securities portfolio at June 30, 1998 was $6.3 
million, which was $19,000 greater than cost at such date.                      

       Asset-backed securities are a type of debt security collateralized by
various loans and assets including: automobile loans, equipment leases, credit  
card receivables, home equity and improvement loans, manufactured housing,      
student loans and other consumer loans. In the case of the Bank, its            
asset-backed securities are collateralized by automobile loans and              
second-mortgage loans.                                                          

       Issuance of asset-backed securities begins with creation of a special
purpose bankruptcy-remote trust to hold collateral on behalf of investors and to
administer the distribution of cash flows. The business of a bankruptcy-remote  
asset-backed securities trust is restricted to the purchase of loans and        
issuance of debt collateralized by those loans. Because consumer loans are      
amortizing, alternate principal cash flow structures can be created and tranched
in a very similar manner as CMOs. There are several typical structures available
to investors in the asset-backed securities market: excess spread,              
senior/subordinated, reserve funds and surety bond guaranteed. Excess spread is 
the first line of protection for most asset-backed securities and is the        
difference between interest cash flow from the underlying loans and the combined
investor coupon, servicing fee, charge-offs and trust costs. Senior/subordinated
structures are internal credit support designating one portion of the           
transaction as junior to the remaining portion. Obligations to the senior class 
are honored prior to junior class obligations in the event of a cash flow       
shortfall from the collateral. A reserve fund                                   

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is, in effect, part of the subordinated piece retained, in a declining balance, 
by the trust so that a portion of the junior class may be rated investment      
grade. Surety bond or guarantee structures are guarantees by third party        
AAA-rated monoline insurance companies. Insurers generally guarantee (or wrap)  
the principal and interest payments of 100% of a transaction, not just the      
subordinated class.                                                             

         Asset-backed securitizations provide the Bank with a broad selection of
fixed-income alternatives, most with higher credit ratings and less downgrade   
risk than corporate bonds and more stable cash flows than mortgage related      
securities. Prepayments and structure risk of asset-backed securities are less  
of a concern than CMO securities due to the shorter maturities of the underlying
collateral promoting greater stability of payments.                             

         Of the Bank's $6.3 million portfolio of asset-backed securities at June
30, 1998, $1.2 million with a weighted average yield of 5.70% had contractual   
maturities within 5 years, $2.1 million with a weighted average yield of 6.20%  
had contractual maturities of 5 to 10 years, and the remaining $3.7 million with
a weighted average yield of 6.72% had contractual maturities of more than 10    
years.                                                                          

Sources of Funds                                                                

        General. Deposits, repayments and prepayments of loans and securities,
proceeds from sales of securities, and proceeds from maturing securities and    
cash flows from operations are the primary sources of the Bank's funds for use  
in lending, investing and for other general purposes.                           

         Deposits. The Bank offers a variety of deposit accounts with a range of
interest rates and terms. The Bank's deposit accounts consist of savings, NOW   
accounts, non-interest bearing checking accounts and money market accounts, and 
certificates of deposit. The Bank also offers IRAs.                             

      At June 30, 1998, deposits totaled $122.3 million. At June 30, 1998,
the Bank had a total of $55.6 million in certificates of deposit, of which $43.1
million had maturities of one year or less. Although the Bank has a significant 
portion of its deposits in shorter-term certificates of deposit, management     
monitors activity on these accounts and, based on historical experience and the 
Bank's current pricing strategy, believes it will retain a large portion of such
accounts upon maturity.                                                         

      The flow of deposits is influenced significantly by general economic
conditions, changes in money market rates, prevailing interest rates and        
competition. Deposits are obtained predominantly from the areas in which the    
Bank's branch offices are located. The Bank relies primarily on competitive     
pricing of its deposit products and customer service and long-standing          
relationships with customers to attract and retain these deposits; however,     
market interest rates and rates offered by competing financial institutions     
significantly affect the Bank's ability to attract and retain deposits. The Bank
uses traditional means of advertising its deposit products, including radio,    
television, and print media and it generally does not solicit deposits from     
outside its market area. While certificates of deposit in excess of $100,000 are
accepted by the Bank, they are not subject to preferential rates. The Bank does 
not actively solicit such deposits as they are more difficult to retain than    
core deposits. Historically, the Bank has not used brokers to obtain deposits.  

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       The following table sets forth the deposit activities of the Bank for
the periods indicated.                                                          

                                                                [Download Table]


                                                               Years Ended          
                                                                 June 30,           
                                                         1998              1997     
                                                    -------------     ------------- 
                                                         (Dollars in Thousands)     

                                                                                    
Opening balance.................................... $     115,855     $     114,187 
Deposits...........................................       228,799           200,355 
Withdrawals........................................       227,002           203,188 
Interest credited..................................         4,672             4,501 
Ending balance.....................................       122,324           115,855 
Net increase ......................................         6,469             1,668 
Percent increase ..................................          5.58%             1.47%


        The following table indicates the amount of the Bank's certificates of
deposit by time remaining until maturity as of June 30, 1998.                   

                                                        [Enlarge/Download Table]


                                                            Over                                            
                                               3 Months    4 to 12               Over                       
                                                or Less     Months             12 Months         Total      
                                             ----------  -----------         --------------  ---------------
                                                                  (In Thousands)                            
                                                                                                            
Certificates of deposit less than $100,000   $   10,828  $    27,014         $       11,088  $        48,930
Certificates of deposit of $100,000 or more         936        4,272                  1,464            6,672
                                             ----------  -----------         --------------  ---------------
Total certificates of deposit                $   11,764  $    31,286         $       12,552  $        55,602
                                             ----------  -----------         --------------  ---------------
                                             ----------  -----------         --------------  ---------------


         The following tables set forth information, by various rate categories,
regarding the balance of deposits by types of deposit for the periods indicated.

                                                        [Enlarge/Download Table]


                                                                         June 30,                         
                                                -------------------------------------------------------   
                                                           1998                          1997             
                                                -------------------------        ----------------------   
                                                  Amount          Percent        Amount         Percent   
                                                                  (Dollars in Thousands)                  
Transactions and Savings Deposits:                                                                        
                                                                                                          
   Demand accounts............................. $     7,514           6.14%    $    6,345            5.48%
   Savings accounts............................      33,412          27.31         32,480           28.04 
   NOW accounts................................       6,187           5.06          5,341            4.61 
   Money market accounts.......................      19,609          16.03         20,439           17.64 
                                                     ------          -----         ------           ----- 
Total Non-Certificates.........................      66,722          54.54%        64,605           55.77%
                                                     ------          -----         ------           ----- 
                                                                     -----                          ----- 
Certificates:                                                                                             
   0.00-3.99%..................................         612           0.50            490            0.42 
   4.00-5.99%..................................      46,733          38.20         41,974           36.23 
   6.00-7.99%..................................       8,257           6.76          8,786            7.58 
   8.00% and over..............................          --             --             --              -- 
                                                     ------          -----         ------           ----- 
Total Certificates.............................      55,602          45.46         51,250           44.23 
                                                     ------          -----         ------           ----- 
Total Deposits................................. $   122,324         100.00%    $  115,855          100.00%
                                                    -------         ------        -------          ------ 
                                                    -------         ------        -------          ------ 


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       The following table sets forth the amount and remaining maturities of
the Bank's certificates of deposit accounts at June 30, 1998.                   

                                                        [Enlarge/Download Table]


                                                    0.00-         4.00-   6.00% or                Percent
                                                    3.99%         5.99%    greater       Total   of Total
                                                    -----         -----    -------       -----   --------
                                                                         (Dollars in Thousands)          
                                                                                                         
Certificate accounts maturing in quarter ending:                                                         
    30-Sep-98..................................   $   612      $11,152   $    --      $11,764     21.16% 
    31-Dec-98..................................        --       11,518       463       11,981     21.55  
    31-Mar-99..................................        --        9,055     1,944       10,999     19.78  
    30-Jun-99..................................        --        7,101     1,204        8,305     14.94  
    30-Sep-99..................................        --        2,074       395        2,469      4.44  
    31-Dec-99..................................        --        2,169       229        2,398      4.31  
    31-Mar-00..................................        --        1,137       408        1,545      2.78  
    30-Jun-00..................................        --          781       367        1,148      2.06  
    30-Sep-00..................................        --          716       152          868      1.56  
    31-Dec-00..................................        --          685       397        1,082      1.95  
    31-Mar-01..................................        --          104       498          602      1.08  
    30-Jun-01..................................        --          224       316          540      0.97  
    Thereafter.................................        --           17     1,884        1,901      3.42  
                                                  -----------  -------   -------      -------     -----  
    Total......................................   $   612      $46,733   $ 8,257      $55,602    100.00% 
                                                  -----------  -------   -------      -------     -----  
                                                  -----------  -------   -------      -------     -----  
    Percent of total...........................       1.0%        84.1%     14.9%                        
                                                  -----------  -------   -------                         
                                                  -----------  -------   -------                         


      Borrowed Funds. In the event that the Bank requires funds beyond its
ability to generate them in internally, additional sources of funds are         
available through the use of short-term FHLB advances and two credit facilities 
made available to the Bank by other financial institutions. At June 30, 1998,   
the Bank had no borrowed funds.                                                 

Properties                                                                      

    The Bank currently conducts its business through four full-service
banking offices. The following table sets forth the Bank's offices as of June   
30, 1998. The Bank's current facilities are considered by management to be      
adequate for the needs of the Bank in the foreseeable future.                   

                                                                [Download Table]


     Location              Leased  Original      Date of    Net Book Value 
                             or      Year         Lease     of Property or 
                            Owned  Leased or   Expiration      Leasehold   
                                   Acquired                 Improvements at
                                                             June 30, 1998 
                                                             (In Thousands)
-------------------------  ------  ---------   ----------   -------------- 
                                                                           
Main Office: (1)                                                           
Main & Church Streets       Owned    1963          --       $      209     
Catskill, New York  12414                                                  

Full Service Branches:                                                     
Route 385                   Owned    1974          --               87     
West Coxsackie, NY 12051                                                   

Main Street                 Owned    1988          --              261     
Cairo, NY 12413                                                            

Route 32                    Owned    1997          --              973     
Greenville, NY 12083                                                       

Operations Dept.:                                                          
429 Main Street            Leased    1990     May 31, 2000          --     
Catskill, NY 12414                                                         


-----------------------------------                                             
(1)  Includes adjacent parking lot.                                             

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Legal Proceedings                                                               

      The Bank is not involved in any pending legal proceedings other than
routine legal proceedings occurring in the ordinary course of business which, in
the aggregate, involve amounts which are believed by management to be immaterial
to the financial condition or operations of the Bank.                           

Personnel                                                                       

    As of June 30, 1998, the Bank had 53 full-time employees and three
part-time employees. The employees are not represented by a collective          
bargaining unit and the Bank considers its relationship with its employees to be
good. See "Management of the Bank - Executive Compensation" for a description of
certain compensation and benefit programs offered to the Bank's employees.      

FEDERAL AND STATE TAXATION

Federal Taxation                                                                

       General. The Mutual Company, the Company and the Bank will be subject
to federal income taxation in the same general manner as other corporations,    
with some exceptions discussed below. The following discussion of federal       
taxation is intended only to summarize certain pertinent federal income tax     
matters and is not a comprehensive description of the tax rules applicable to   
the Bank.                                                                       

 Method of Accounting. For federal income tax purposes, the Bank
currently reports its income and expenses on the accrual method of accounting   
and uses a tax year ending December 31 for filing its consolidated federal      
income tax returns. The Small Business Protection Act of 1996 (the "1996 Act")  
eliminated the use of the reserve method of accounting for bad debt reserves by 
savings institutions, effective for taxable years beginning after 1995.         

     Bad Debt Reserves. Prior to the 1996 Act, the Bank was permitted to
establish a reserve for bad debts and to make annual additions to the reserve.  
These additions could, within specified formula limits, be deducted in arriving 
at the Bank's taxable income. As a result of the 1996 Act, the Bank must use the
specific charge off method in computing its bad debt deduction beginning with   
its 1996 Federal tax return. In addition, the federal legislation requires the  
recapture (over a six year period) of the excess of tax bad debt reserves at    
December 31, 1995 over those established as of December 31, 1987. The amount of 
such reserve subject to recapture as of June 30, 1998, was approximately        
$379,000.                                                                       

      Taxable Distributions and Recapture. Prior to the 1996 Act, bad debt
reserves created prior to January 1, 1988 were subject to recapture into taxable
income should the Bank fail to meet certain thrift asset and definitional tests.
New federal legislation eliminated these thrift related recapture rules.        
However, under current law, pre-1988 reserves remain subject to recapture should
the Bank make certain non-dividend distributions.                               

 At June 30, 1998, the Bank's total federal pre-1988 reserve was
approximately $379,000. This reserve reflects the cumulative effects of federal 
tax deductions by the Bank for which no Federal income tax provision has been   
made.                                                                           

       Minimum Tax. The Code imposes an alternative minimum tax ("AMT") at a
rate of 20% on a base of regular taxable income plus certain tax preferences    
("alternative minimum taxable income" or "AMTI"). The AMT is payable to the     
extent such AMTI is in excess of an exemption amount. Net operating losses can  
offset no more than 90% of AMTI. Certain payments of alternative minimum tax may
be used as credits against regular tax liabilities in future years. The Bank has
not been subject to the alternative minimum tax and has no such amounts         
available as credits for carryover.                                             

       Net Operating Loss Carryovers. A financial institution may carry back
net operating losses to the preceding two taxable years and forward to the      
succeeding 20 taxable years. This provision applies to losses incurred in       
taxable                                                                         

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years beginning after August 5, 1997. At June 30, 1998, the Bank had no net     
operating loss carryforwards for federal income tax purposes.                   

      Corporate Dividends-Received Deduction. The Company may exclude from
its income 100% of dividends received from the Bank as a member of the same     
affiliated group of corporations. Following completion of the Reorganization and
Offering, it is expected that the Mutual Company will own less than 80% of the  
outstanding Common Stock of the Company. As such, the Mutual Company will not be
permitted to file a consolidated federal income tax return with the Company and 
the Bank. The corporate dividends-received deduction is 80% in the case of      
dividends received from corporations with which a corporate recipient does not  
file a consolidated return, and corporations which own less than 20% of the     
stock of a corporation distributing a dividend may deduct only 70% of dividends 
received or accrued on their behalf.                                            

State Taxation                                                                  

         New York State Taxation - General. The Company and the Bank will report
income on a combined calendar year basis to New York State. The New York State  
franchise tax on banking corporations is imposed in an amount equal to the      
greater of (a) 9% of "entire net income" allocable to New York State (b) 3% of  
"alternative entire net income" allocable to New York State (c) 0.01% of the    
average value of assets allocable to New York State or (d) $250. Entire net     
income is based on federal taxable income, subject to certain modifications.    
Alternative entire net income is equal to entire net income without certain     
modifications. The Mutual Company will file a separate New York State franchise 
tax return.                                                                     

         Bad Debt Reserves. The Bank is allowed to utilize the reserve method of
accounting for New York State franchise tax purposes and is required to maintain
two reserve accounts-the Reserve for Losses on Nonqualifying Loans (the "NY NQL 
Reserve") and the Reserve for Losses on Qualifying Real Property Loans (the "NY 
QRPL Reserve"). The addition to the NY NQL Reserve must be computed under the   
"experience method". The addition to the NY QRPL Reserve may be computed under  
either the experience method or the "percentage of taxable income method" (the  
"PTI method"). The deduction under the PTI method is equal to 32% of entire net 
income (before the deduction for the bad debt reserve addition), which must     
first be allocated to the NY NQL Reserve. The balance, if any, is the allowable 
addition to the NY QRPL reserve, subject to a limitation based upon 6% of       
Qualifying Real Property Loans ("QRPL"). As of December 31, 1997, the Bank's NY 
QRPL Reserve was subject to this limitation.                                    

      The Bank will not be subject to the six-year recapture of the excess
federal bad debt reserve at December 31, 1995.                                  

      Recapture of New York State Bad Debt Reserves. If the Bank ceases to
qualify as a "thrift institution" (as defined in the New York State tax law), or
fails to hold at least 60% of its assets in "Qualifying Assets", it will no     
longer be entitled to use the reserve method and must recapture into entire net 
income a portion of its NY QRPL Reserve. The amount subject to recapture is     
generally equal to the excess of the NY QRPL Reserve over the federal QRPL      
Reserve as of December 31, 1995. The amount of the Bank's NY QRPL Reserve       
subject to recapture is approximately $1.8 million. Since it is the Banks'      
intention to continue to qualify as a thrift institution and to meet the 60%    
Qualifying Asset test, a deferred tax liability has not been established for the
$162,000 New York State tax that would result from such failure.                

 Net Operating Loss Deductions. For New York State franchise tax
purposes, the Bank is not entitled to carry back or forward net operating losses
("NOLs") incurred in taxable years ending before January 1, 2001. NOLs incurred 
in taxable years beginning on or after January 1, 2001 can be carried forward to
the succeeding 20 taxable years. No carryback of NOLs will be permitted.        

       Corporate Dividends-Received Deduction. Similar to the federal rules,
the Company and the Bank will file a combined New York State franchise tax      
report and intercompany dividends will be eliminated. However, the Mutual       
Company will not own the requisite percentage (generally 80% or more) of the    
common stock of the Company necessary to file on a combined basis with the      
Company. As long as the Mutual Company owns more than 50% of the common         

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stock of the Company, it will be eligible for a 60% dividends-received          
deduction. The Mutual Company will not be entitled to any dividends-received    
deduction if it owns 50% or less of the common stock of the Company.            

        Delaware State Taxes. As a Delaware holding company not earning income
in Delaware, the Company will be exempt from Delaware corporate income tax, but 
will be required to file an annual report with, and pay an annual franchise tax 
to, the State of Delaware.                                                      

REGULATION

General                                                                         

      The Bank is a New York-chartered mutual savings bank and its deposit
accounts are insured up to applicable limits by the FDIC through the BIF. The   
Bank is subject to extensive regulation by the Department, as its chartering    
agency; and by the FDIC, as its deposit insurer. The Bank is required to file   
reports with, and is periodically examined by, the FDIC and the Superintendent  
concerning its activities and financial condition and must obtain regulatory    
approvals prior to entering into certain transactions, including, but not       
limited to, mergers with or acquisitions of other banking institutions. The Bank
is a member of the FHLB of New York and is subject to certain regulations by the
Federal Home Loan Bank System. Both the Company and the Mutual Company, as bank 
holding companies, will be subject to regulation by the Federal Reserve Board   
and will be required to file reports with the Federal Reserve Board. Any change 
in such regulations, whether by the Department, the FDIC, or the Federal Reserve
Board could have a material adverse impact on the Bank, the Company, or the     
Mutual Company.                                                                 

    Certain of the regulatory requirements applicable to the Bank, the
Company and the Mutual Company are referred to below or elsewhere herein.       

New York Bank Regulation                                                        

 The exercise by an FDIC-insured savings bank of the lending and
investment powers under the New York State Banking Law is limited by FDIC       
regulations and other federal law and regulations. In particular, the applicable
provisions of New York State Banking Law and regulations governing the          
investment authority and activities of an FDIC insured state-chartered savings  
bank have been substantially limited by the Federal Deposit Insurance           
Corporation Improvement Act of 1991 ("FDICIA") and the FDIC regulations issued  
pursuant thereto.                                                               

        The Bank derives its lending, investment and other authority primarily
from the applicable provisions of New York State Banking Law and the regulations
of the Department, as limited by FDIC regulations. Under these laws and         
regulations, savings banks, including the Bank, may invest in real estate       
mortgages, consumer and commercial loans, certain types of debt securities,     
including certain corporate debt securities and obligations of federal, state   
and local governments and agencies, certain types of corporate equity securities
and certain other assets. Under the statutory authority for investing in equity 
securities, a savings bank may invest up to 7.5% of its assets in corporate     
stock, with an overall limit of 5% of its assets invested in common stock.      
Investment in the stock of a single corporation is limited to the lesser of 2%  
of the outstanding stock of such corporation or 1% of the savings bank's assets,
except as set forth below. Such equity securities must meet certain earnings    
ratios and other tests of financial performance. A savings bank's lending powers
are not subject to percentage of assets limitations, although there are limits  
applicable to single borrowers. A savings bank may also, pursuant to the        
"leeway" power, make investments not otherwise permitted under the New York     
State Banking Law. This power permits investments in otherwise impermissible    
investments of up to 1% of assets in any single investment, subject to certain  
restrictions and to an aggregate limit for all such investments of up to 5% of  
assets. Additionally, in lieu of investing in such securities in accordance with
and reliance upon the specific investment authority set forth in the New York   
State Banking Law, savings banks are authorized to elect to invest under a      
"prudent person" standard in a wider range of investment securities as compared 
to the types of investments permissible under such specific investment          
authority. However, in the event a savings bank elects to utilize the "prudent  
person" standard, it will be unable to avail itself of the other provisions of  
the New York State Banking Law and regulations which set forth specific         
investment authority. The Bank has not elected to conduct its investment        

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activities under the "prudent person" standard. A savings bank may also exercise
trust powers upon approval of the Department.                                   

        New York State chartered savings banks may also invest in subsidiaries
under their service corporation investment authority. A savings bank may use    
this power to invest in corporations that engage in various activities          
authorized for savings banks, plus any additional activities which may be       
authorized by the Banking Board. Investment by a savings bank in the stock,     
capital notes and debentures of its service corporations is limited to 3% of the
bank's assets, and such investments, together with the bank's loans to its      
service corporations, may not exceed 10% of the savings bank's assets.          
Furthermore, New York banking regulations impose requirements on loans which a  
bank may make to its executive officers and directors and to certain            
corporations or partnerships in which such persons have equity interests. These 
requirements include, but are not limited to, requirements that (i) certain     
loans must be approved in advance by a majority of the entire board of trustees 
and the interested party must abstain from participating directly or indirectly 
in the voting on such loan, (ii) the loan must be on terms that are not more    
favorable than those offered to unaffiliated third parties, and (iii) the loan  
must not involve more than a normal risk of repayment or present other          
unfavorable features.                                                           

       Under the New York State Banking Law, the Superintendent may issue an
order to a New York State chartered banking institution to appear and explain an
apparent violation of law, to discontinue unauthorized or unsafe practices and  
to keep prescribed books and accounts. Upon a finding by the Department that any
director, trustee or officer of any banking organization has violated any law,  
or has continued unauthorized or unsafe practices in conducting the business of 
the banking organization after having been notified by the Superintendent to    
discontinue such practices, such director, trustee or officer may be removed    
from office after notice and an opportunity to be heard. The Bank does not know 
of any past or current practice, condition or violation that might lead to any  
proceeding by the Superintendent or the Department against the Bank or any of   
its trustees or officers.                                                       

Insurance of Accounts and Regulation by the FDIC                                

     The Bank is a member of the BIF, which is administered by the FDIC.
Deposits are insured up to applicable limits by the FDIC and such insurance is  
backed by the full faith and credit of the U.S. Government. As insurer, the FDIC
imposes deposit insurance premiums and is authorized to conduct examinations of 
and to require reporting by FDIC-insured institutions. It also may prohibit any 
FDIC-insured institution from engaging in any activity the FDIC determines by   
regulation or order to pose a serious risk to the FDIC. The FDIC also has the   
authority to initiate enforcement actions against savings banks, after giving   
the Superintendent an opportunity to take such action, and may terminate the    
deposit insurance if it determines that the institution has engaged or is       
engaging in unsafe or unsound practices, or is in an unsafe or unsound          
condition.                                                                      

In late 1995, the FDIC approved a final rule regarding deposit
insurance premiums which, effective with respect to the semi-annual premium     
assessment beginning January 1, 1996, reduced deposit insurance premiums for BIF
member institutions to zero basis points (subject to an annual minimum of       
$2,000) for institutions in the lowest risk category.                           

As a result of legislation passed in 1996, relating to the    
recapitalization of the Savings Association Insurance Fund ("SAIF"), from 1997  
through 1999, FDIC-insured institutions will pay an insurance premium of        
approximately 1.3 basis points of their BIF-assessable deposits. Based upon     
assessable deposits at June 30, 1998, the Bank would expect to pay $3,600 in    
insurance premiums per quarter during 1998.                                     

Regulatory Capital Requirements                                                 

         The FDIC has adopted risk-based capital guidelines to which the Bank is
subject. The guidelines establish a systematic analytical framework that makes  
regulatory capital requirements more sensitive to differences in risk profiles  
among banking organizations. The Bank is required to maintain certain levels of 
regulatory capital in relation to regulatory risk-weighted assets. The ratio of 
such regulatory capital to regulatory risk-weighted assets is referred to as the
Bank's "risk-based capital ratio." Risk-based capital ratios are determined by  
allocating assets and specified off-                                            

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balance sheet items to four risk-weighted categories ranging from 0% to 100%,   
with higher levels of capital being required for the categories perceived as    
representing greater risk.                                                      

      These guidelines divide a savings bank's capital into two tiers. The
first tier ("Tier I") includes common equity, retained earnings, certain        
non-cumulative perpetual preferred stock (excluding auction rate issues) and    
minority interests in equity accounts of consolidated subsidiaries, less        
goodwill and other intangible assets (except mortgage servicing rights and      
purchased credit card relationships subject to certain limitations).            
Supplementary ("Tier II") capital includes, among other items, cumulative       
perpetual and long-term limited-life preferred stock, mandatory convertible     
securities, certain hybrid capital instruments, term subordinated debt and the  
allowance for loan and lease losses, subject to certain limitations, less       
required deductions. Savings banks are required to maintain a total risk-based  
capital ratio of 8%, of which at least 4% must be Tier I capital.               

         In addition, the FDIC has established regulations prescribing a minimum
Tier I leverage ratio (Tier I capital to adjusted total assets as specified in  
the regulations). These regulations provide for a minimum Tier I leverage ratio 
of 3% for banks that meet certain specified criteria, including that they have  
the highest examination rating and are not experiencing or anticipating         
significant growth. All other banks are required to maintain a Tier I leverage  
ratio of 3% plus an additional cushion of at least 100 to 200 basis points. The 
FDIC may, however, set higher leverage and risk-based capital requirements on   
individual institutions when particular circumstances warrant. Savings banks    
experiencing or anticipating significant growth are expected to maintain capital
ratios, including tangible capital positions, well above the minimum levels.    

Standards for Safety and Soundness                                              

  The federal banking agencies have adopted a final regulation and
Interagency Guidelines Prescribing Standards for Safety and Soundness           
("Guidelines") to implement the safety and soundness standards required under   
federal law. The Guidelines set forth the safety and soundness standards that   
the federal banking agencies use to identify and address problems at insured    
depository institutions before capital becomes impaired. The standards set forth
in the Guidelines address internal controls and information systems; internal   
audit system; credit underwriting; loan documentation; interest rate risk       
exposure; asset growth; and compensation, fees and benefits. The agencies also  
adopted additions to the Guidelines which require institutions to examine asset 
quality and earnings standards. If the appropriate federal banking agency       
determines that an institution fails to meet any standard prescribed by the     
Guidelines, the agency may require the institution to submit to the agency an   
acceptable plan to achieve compliance with the standard, as required by federal 
law. The final regulations establish deadlines for the submission and review of 
such safety and soundness compliance plans.                                     

Limitations on Dividends and Other Capital Distributions                        

        The FDIC has the authority to use its enforcement powers to prohibit a
savings bank from paying dividends if, in its opinion, the payment of dividends 
would constitute an unsafe or unsound practice. Federal law also prohibits the  
payment of dividends by a bank that will result in the bank failing to meet its 
applicable capital requirements on a pro forma basis. New York law restricts the
Bank from declaring a dividend which would reduce its capital below (i) the     
amount required to be maintained by state and federal law and regulations, or   
(ii) the amount of the Bank's liquidation account established in connection with
the Reorganization. The liquidation account is expected initially to total $15.7
million. New York law also prescribes that dividends declared by a stock savings
bank in any calendar year shall not exceed the total of its net profits for that
year combined with its retained net profits of the preceding two years, plus any
required transfer to surplus or for the retirement of any preferred stock,      
unless approved by the Superintendent.                                          

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Prompt Corrective Action                                                        

        The federal banking agencies have promulgated regulations to implement
the system of prompt corrective action required by federal law. Under the       
regulations, a bank shall be deemed to be (i) "well capitalized" if it has total
risk-based capital of 10.0% or more, has a Tier I risk-based capital ratio of   
6.0% or more, has a Tier I leverage capital ratio of 5.0% or more and is not    
subject to any written capital order or directive; (ii) "adequately capitalized"
if it has a total risk-based capital ratio of 8.0% or more, a Tier I risk-based 
capital ratio of 4.0% or more and a Tier I leverage capital ratio of 4.0% or    
more (3.0% under certain circumstances) and does not meet the definition of     
"well capitalized"; (iii) "undercapitalized" if it has a total risk-based       
capital ratio that is less than 8.0%, a Tier I risk-based capital ratio that is 
less than 4.0% or a Tier I leverage capital ratio that is less than 4.0% (3.0%  
under certain circumstances); (iv) "significantly undercapitalized" if it has a 
total risk-based capital ratio that is less than 6.0%, a Tier I risk-based      
capital ratio that is less than 3.0% or a Tier I leverage capital ratio that is 
less than 3.0%; and (v) "critically undercapitalized" if it has a ratio of      
tangible equity to total assets that is equal to or less than 2.0%. Federal law 
and regulations also specify circumstances under which a federal banking agency 
may reclassify a well capitalized institution as adequately capitalized and may 
require an adequately capitalized institution to comply with supervisory actions
as if it were in the next lower category (except that the FDIC may not          
reclassify a significantly undercapitalized institution as critically           
undercapitalized).                                                              

     Based on the foregoing, the Bank is currently classified as a "well
capitalized" savings institution.                                               

Activities and Investments of Insured State-Chartered Banks Acting as Principal 

       Federal law generally limits the activities and equity investments of
FDIC-insured, state-chartered banks to those that are permissible for national  
banks, notwithstanding state laws. Under regulations dealing with equity        
investments, an insured state bank generally may not, directly or indirectly,   
acquire or retain any equity investment of a type, or in an amount, that is not 
permissible for a national bank. An insured state bank is not prohibited from,  
among other things, (i) acquiring or retaining a majority interest in a         
subsidiary; (ii) investing as a limited partner in a partnership the sole       
purpose of which is the direct or indirect investment in the acquisition,       
rehabilitation, or new construction of a qualified housing project, provided    
that such limited partnership investments may not exceed 2% of the bank's total 
assets; (iii) acquiring up to 10% of the voting stock of a company that solely  
provides or reinsures directors', trustees', and officers' liability insurance  
coverage or bankers' blanket bond group insurance coverage for insured          
depository institutions; and (iv) acquiring or retaining the voting shares of a 
depository institution if certain requirements are met.                         

   Federal law and FDIC regulations permit certain exceptions to the
foregoing limitation. For example, certain state-chartered banks, such as the   
Bank, may continue to invest in common or preferred stock listed on a National  
Securities Exchange or the National Market System of NASDAQ, and in the shares  
of an investment company registered under the Investment Company Act of 1940, as
amended. As of June 30, 1998, the Bank had no securities pursuant to this       
exception.                                                                      

Transactions with Affiliates                                                    

         Under current federal law, transactions between depository institutions
and their affiliates are governed by Sections 23A and 23B of the Federal Reserve
Act. An affiliate of a savings bank is any company or entity that controls, is  
controlled by, or is under common control with the savings bank, other than a   
subsidiary. In a holding company context, at a minimum, the parent holding      
company of a savings bank and any companies which are controlled by such parent 
holding company are affiliates of the savings bank. Generally, Section 23A      
limits the extent to which the savings bank or its subsidiaries may engage in   
"covered transactions" with any one affiliate to an amount equal to 10% of such 
savings bank's capital stock and surplus, and contains an aggregate limit on all
such transactions with all affiliates to an amount equal to 20% of such capital 
stock and surplus. The term "covered transaction" includes the making of loans  
or other extensions of credit to an affiliate; the purchase of assets from an   
affiliate, the purchase of, or an investment in, the securities of an affiliate;
the acceptance of securities of an affiliate as collateral for a loan or        
extension of credit to any person; or issuance of a guarantee, acceptance, or   
letter of credit on behalf of an affiliate. Section 23A also                    

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establishes specific collateral requirements for loans or extensions of credit  
to, or guarantees, acceptances on letters of credit issued on behalf of an      
affiliate. Section 23B requires that covered transactions and a broad list of   
other specified transactions be on terms substantially the same, or no less     
favorable, to the savings bank or its subsidiary as similar transactions with   
nonaffiliates.                                                                  

       Further, Section 22(h) of the Federal Reserve Act restricts a savings
bank with respect to loans to directors, executive officers, and principal      
stockholders. Under Section 22(h), loans to directors, executive officers and   
stockholders who control, directly or indirectly, 10% or more of voting         
securities of a savings bank, and certain related interests of any of the       
foregoing, may not exceed, together with all other outstanding loans to such    
persons and affiliated entities, the savings bank's total capital and surplus.  
Section 22(h) also prohibits loans above amounts prescribed by the appropriate  
federal banking agency to directors, executive officers, and stockholders who   
control 10% or more of voting securities of a stock savings bank, and their     
respective related interests, unless such loan is approved in advance by a      
majority of the board of directors of the savings bank. Any "interested"        
director may not participate in the voting. The loan amount (which includes all 
other outstanding loans to such person) as to which such prior board of director
approval is required, is the greater of $25,000 or 5% of capital and surplus or 
any loans over $500,000. Further, pursuant to Section 22(h), loans to directors,
executive officers and principal stockholders must generally be made on terms   
substantially the same as offered in comparable transactions to other persons.  
Section 22(g) of the Federal Reserve Act places additional limitations on loans 
to executive officers.                                                          

Holding Company Regulation                                                      

   Federal Bank Holding Company Regulation. Upon consummation of the
Reorganization, the Company, as the sole shareholder of the Bank, and the Mutual
Company, as indirect controlling shareholder of the Bank, will become bank      
holding companies. Bank holding companies are subject to comprehensive          
regulation and regular examinations by the Federal Reserve Board under the Bank 
Holding Company Act of 1956, as amended (the "BHCA"), and the regulations of the
Federal Reserve Board. The Federal Reserve Board also has extensive enforcement 
authority over bank holding companies, including, among other things, the       
ability to assess civil money penalties, to issue cease and desist or removal   
orders and to require that a holding company divest subsidiaries (including its 
bank subsidiaries). In general, enforcement actions may be initiated for        
violations of law and regulations and unsafe or unsound practices.              

         After consummation of the Reorganization and Offering, the Company will
be subject to capital adequacy guidelines for bank holding companies (on a      
consolidated basis) which are substantially similar to those of the FDIC for the
Bank. On a pro forma consolidated basis after the Reorganization and Offering,  
the Company's pro forma stockholders' equity will exceed these requirements.    

       Under Federal Reserve Board policy, a bank holding company must serve
as a source of strength for its subsidiary bank. Under this policy the Federal  
Reserve Board may require, and has required in the past, a holding company to   
contribute additional capital to an undercapitalized subsidiary bank.           

    Under the BHCA, a bank holding company must obtain Federal Reserve
Board approval before: (i) acquiring, directly or indirectly, ownership or      
control of any voting shares of another bank or bank holding company if, after  
such acquisition, it would own or control more than 5% of such shares (unless it
already owns or controls the majority of such shares); (ii) acquiring all or    
substantially all of the assets of another bank or bank holding company; or     
(iii) merging or consolidating with another bank holding company.               

The BHCA also prohibits a bank holding company, with certain  
exceptions, from acquiring direct or indirect ownership or control of more than 
5% of the voting shares of any company which is not a bank or bank holding      
company, or from engaging directly or indirectly in activities other than those 
of banking, managing or controlling banks, or providing services for its        
subsidiaries. The principal exceptions to these prohibitions involve certain    
non-bank activities which, by statute or by Federal Reserve Board regulation or 
order, have been identified as activities closely related to the business of    
banking or managing or controlling banks. The list of activities permitted by   
the Federal Reserve Board includes, among other things, operating a savings     
association, mortgage company, finance company, credit card company or factoring
company; performing certain data processing operations; providing certain       
investment                                                                      

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and financial advice; underwriting and acting as an insurance agent for certain 
types of credit-related insurance; leasing property on a full-payout,           
non-operating basis; selling money orders, travelers' checks and United States  
Savings Bonds; real estate and personal property appraising; providing tax      
planning and preparation services; and, subject to certain limitations,         
providing securities brokerage services for customers.                          

  Interstate Banking and Branching. Federal law allows the Federal
Reserve Board to approve an application of an adequately capitalized and        
adequately managed bank holding company to acquire control of, or acquire all or
substantially all of the assets of, a bank located in a state other than such   
holding company's home state, without regard to whether the transaction is      
prohibited by the laws of any state. The Federal Reserve Board may not approve  
the acquisition of the bank that has not been in existence for the minimum time 
period (not exceeding five years) specified by the statutory law of the host    
state. The Federal Reserve Board is prohibited from approving an application if 
the applicant (and its depository institution affiliates) controls or would     
control more than 10% of the insured deposits in the United States or 30% or    
more of the deposits in the target bank's home state or in any state in which   
the target bank maintains a branch. Individual states continue to have authority
to limit the percentage of total insured deposits in the state which may be held
or controlled by a bank or bank holding company to the extent such limitation   
does not discriminate against out-of-state banks or bank holding companies.     
Individual states may also waive the 30% state-wide concentration limit referred
to above.                                                                       

       Additionally, beginning on June 1, 1997, the federal banking agencies
were authorized to approve interstate merger transactions without regard to     
whether such transaction is prohibited by the law of any state, unless the home 
state of one of the banks "opted out" by adopting a law which applies equally to
all out-of-state banks and expressly prohibits merger transactions involving    
out-of-state banks. Interstate acquisitions of branches are permitted only if   
the law of the state in which the branch is located permits such acquisitions.  
In response to Riegle-Neal, the State of New York enacted laws allowing         
interstate mergers and branching on a reciprocal basis.                         

         Federal law authorizes the FDIC to approve interstate branching de novo
by national and state banks, respectively, only in states which specifically    
allow for such branching. The appropriate federal banking agencies are required 
to prescribe regulations which prohibit any out-of-state bank from using the    
interstate branching authority primarily for the purpose of deposit production. 
The FDIC and Federal Reserve Board have adopted such regulations. These         
regulations include guidelines to ensure that interstate branches operated by an
out-of-state bank in a host state are reasonably helping to meet the credit     
needs of the communities which they serve. Should the FDIC determination that a 
bank interstate branch is not reasonably helping to meet the credit needs of the
communities serviced by an interstate branch, the FDIC is authorized to close   
the interstate branch or not permit the bank to open a new branch in the state  
in which the bank previously opened an interstate branch.                       

       Dividends. The Federal Reserve Board has issued a policy statement on
the payment of cash dividends by bank holding companies, which expresses the    
Federal Reserve Board's view that a bank holding company should pay cash        
dividends only to the extent that the holding company's net income for the past 
year is sufficient to cover both the cash dividends and a rate of earning       
retention that is consistent with the holding company's capital needs, asset    
quality and overall financial condition. The Federal Reserve Board also         
indicated that it would be inappropriate for a company experiencing serious     
financial problems to borrow funds to pay dividends. Furthermore, under the     
prompt corrective action regulations adopted by the Federal Reserve Board, the  
Federal Reserve Board may prohibit a bank holding company from paying any       
dividends if the holding company's bank subsidiary is classified as             
"undercapitalized."                                                             

       Bank holding companies are required to give the Federal Reserve Board
prior written notice of any purchase or redemption of its outstanding equity    
securities if the gross consideration for the purchase or redemption, when      
combined with the net consideration paid for all such purchases or redemptions  
during the preceding 12 months, is equal to 10% or more of their consolidated   
net worth. The Federal Reserve Board may disapprove such a purchase or          
redemption if it determines that the proposal would constitute an unsafe or     
unsound practice or would violate any law, regulation, Federal Reserve Board    
order, or any condition imposed by, or written agreement with, the Federal      
Reserve Board. This notification requirement does not apply to any company that 
meets the well-capitalized standard for commercial banks, has a safety and      
soundness examination rating of at least a "2" and is not subject to any        
unresolved supervisory issues.                                                  

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    New York State Bank Holding Company Regulation. In addition to the
federal bank holding company regulations, a bank holding company organized or   
doing business in New York State also may be subject to regulation under the New
York State Banking Law. The term "bank holding company," for the purposes of the
New York State Banking Law, is defined generally to include any person, company 
or trust that directly or indirectly either controls the election of a majority 
of the directors or owns, controls or holds with power to vote more than 10% of 
the voting stock of a bank holding company or, if the Company is a banking      
institution, another banking institution, or 10% or more of the voting stock of 
each of two or more banking institutions. In general, a bank holding company    
controlling, directly or indirectly, only one banking institution will not be   
deemed to be a bank holding company for the purposes of the New York State      
Banking Law. Under New York State Banking Law, the prior approval of the Banking
Board is required before: (1) any action is taken that causes any company to    
become a bank holding company; (2) any action is taken that causes any banking  
institution to become or be merged or consolidated with a subsidiary of a bank  
holding company; (3) any bank holding company acquires direct or indirect       
ownership or control of more than 5% of the voting stock of a banking           
institution; (4) any bank holding company or subsidiary thereof acquires all or 
substantially all of the assets of a banking institution; or (5) any action is  
taken that causes any bank holding company to merge or consolidate with another 
bank holding company. Additionally, certain restrictions apply to New York State
bank holding companies regarding the acquisition of banking institutions which  
have been chartered five years or less and are located in smaller communities.  
Officers, directors and employees of New York State bank holding companies are  
subject to limitations regarding their affiliation with securities underwriting 
or brokerage firms and other bank holding companies and limitations regarding   
loans obtained from its subsidiaries. Although the Company will not be a bank   
holding company for purposes of New York State law upon the Effective Date of   
the Reorganization, any future acquisition of ownership, control, or the power  
to vote 10% or more of the voting stock of another bank or bank holding company 
would cause it to become such.                                                  

   Mutual Holding Company Regulation. Under New York law, the Mutual
Company may exercise all powers and privileges of a New York chartered mutual   
savings bank, except for the power of accepting deposits. As a bank holding     
company, the Mutual Company is also authorized to exercise all powers and engage
in all activities permitted to a bank holding company under the BHCA.           

        Dividend Waivers by the Mutual Holding Company. It has been the policy
of many mutual holding companies to waive the receipt of dividends declared by  
any savings institution subsidiary. In connection with its approval of the      
Reorganization, however, it is expected that the Federal Reserve Board will     
impose certain conditions on the waiver by the Mutual Company of dividends paid 
on the Common Stock. In particular, the Mutual Company is expected to be        
required to obtain prior Federal Reserve Board approval before it may waive any 
dividends. As of the date hereof, management does not believe that the Federal  
Reserve Board has given its approval to any waiver of dividends by any mutual   
holding company that has requested its approval.                                

       The terms of the Federal Reserve Board approval of the Reorganization
are also expected to require that the amount of any waived dividends will not be
available for payment to Minority Stockholders and be excluded from capital for 
purposes of calculating dividends payable to Minority Stockholders. Moreover,   
the cumulative amount of waived dividends must be maintained in a restricted    
capital account which would be added to any liquidation account of the Bank, and
would not be available for distribution to Minority Stockholders. The restricted
capital account and liquidation account amounts would not be reflected in the   
Bank's financial statements or the notes thereto, but would be considered as a  
notational or memorandum account of the Bank, and would be maintained in        
accordance with the rules, regulations and policy of the Office of Thrift       
Supervision except that such rules would be administered by the Federal Reserve 
Board, and any other rules and regulations adopted by the Federal Reserve Board.
The Plan of Reorganization also provides that if the Mutual Company converts to 
stock form in the future, any waived dividends would reduce the percentage of   
the converted company's shares of Common Stock issued to Minority Stockholders  
in connection with any such transaction. See "Conversion of the Mutual Company  
to Stock Form."                                                                 

    Management does not believe that the Mutual Company will initially
waive dividends declared by the Company. If the Mutual Company decides that it  
is in its best interest to waive a particular dividend to be paid by the        
Company, and the Federal Reserve Board approves such waiver, then the Company   
would pay such dividend only to Minority Stockholders, and the amount of the    
dividend waived by the Mutual Company would be treated in the manner            

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described above. The Mutual Company's decision as to whether or not to waive a  
particular dividend, if such waiver is approved by the Federal Reserve Board,   
will depend on a number of factors, including the Mutual Company's capital      
needs, the investment alternatives available to the Mutual Company as compared  
to those available to the Company, and regulatory approvals. There can be no    
assurance (i) that after the Reorganization the Mutual Company will waive       
dividends paid by the Company, (ii) that the Federal Reserve Board will approve 
any dividend waivers by the Mutual Company or (iii) of the terms that may be    
imposed by the Federal Reserve Board on any dividend waiver.                    

Conversion of the Mutual Company to Stock Form. New York law, 
regulations of the Department and the Plan of Reorganization permit the Mutual  
Company to convert from the mutual to the capital stock form of organization (a 
"Conversion Transaction"). There can be no assurance when, if ever, a Conversion
Transaction will occur, and the board of trustees has no current intention or   
plan to undertake a Conversion Transaction. In a Conversion Transaction, the    
Mutual Company would merge with and into the Bank or the Company, with the Bank 
or the Company as the resulting entity, and certain depositors of the Bank would
receive the right to subscribe for additional shares of the resulting entity. In
a Conversion Transaction, each share of Common Stock outstanding immediately    
prior to the completion of the Conversion Transaction held by persons other than
the Mutual Company would be automatically converted into and become the right to
receive a number of shares of Common Stock of the resulting entity determined   
pursuant to an exchange ratio that ensures that after the Conversion            
Transaction, subject to the Dividend Waiver and MHC Assets Adjustment described 
below (if required by the applicable federal banking regulators) and any        
adjustment to reflect the receipt of cash in lieu of fractional shares, the     
percentage of the to-be outstanding shares of the resulting entity issued to    
Minority Stockholders in exchange for their Common Stock would be equal to the  
percentage of the outstanding shares of Common Stock held by Minority           
Stockholders immediately prior to the Conversion Transaction. The total number  
of shares held by Minority Stockholders after the Conversion Transaction also   
would be affected by any purchases by such persons in the offering that would be
conducted as part of the Conversion Transaction.                                

         As set forth in the Plan of Reorganization, the Dividend Waiver and MHC
Assets Adjustment would adjust the percentage of the to-be outstanding shares of
the resulting entity issued in exchange for minority shares to reflect (i) the  
aggregate amount of dividends waived by the Mutual Company and (ii) assets,     
other than Common Stock, held by the Mutual Company. Pursuant to the Dividend   
Waiver and MHC Assets Adjustment, the percentage of the to-be outstanding shares
of the resulting entity issued to Minority Stockholders in exchange for their   
minority shares (the "Adjusted Minority Ownership Percentage") is equal to the  
percentage of the outstanding shares of Common Stock held by Minority           
Stockholders multiplied by the Dividend Waiver Fraction. The Dividend Waiver    
Fraction is equal to the product of (a) a fraction, of which the numerator is   
equal to the Company's stockholders' equity at the time of the Conversion       
Transaction less the aggregate amount of dividends waived by the Mutual Company,
and the denominator is equal to the Company's stockholders' equity at the time  
of the Conversion Transaction, and (b) a fraction, of which the numerator is    
equal to the appraised pro forma market value of the resulting entity in the    
Conversion Transaction minus the value of the Mutual Company's assets other than
Common Stock and the denominator is equal to the appraised pro forma market     
value of the resulting entity in the Conversion Transaction.                    

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Federal Securities Law                                                          

      The Common Stock of the Company to be issued in the Offering will be
registered with the SEC under the Exchange Act prior to completion of the       
Reorganization and the Offering. the Company will be subject to the             
information, proxy solicitation, insider trading restrictions and other         
requirements of the SEC under the Exchange Act.                                 

The Company Common Stock held by persons who are affiliates   
(generally officers, directors and principal stockholders) of the Company may   
not be resold without registration or unless sold in accordance with certain    
resale restrictions. If the Company meets specified current public              
information requirements, each affiliate of the Company is able to sell in      
the public market, without registration, a limited number of shares in any      
three-month period.                                                             

Federal Reserve System                                                          

   The Federal Reserve Board requires all depository institutions to
maintain noninterest-bearing reserves at specified levels against their         
transaction accounts (primarily checking, NOW and Super NOW checking            
accounts). At June 30, 1998, the Bank was in compliance with these reserve      
requirements.                                                                   

Community Reinvestment Act                                                      

  Under the Community Reinvestment Act, as amended (the "CRA"), as
implemented by FDIC regulations, a savings bank has a continuing and            
affirmative obligation, consistent with its safe and sound operation, to help   
meet the credit needs of its entire community, including low and moderate       
income neighborhoods. The CRA does not establish specific lending               
requirements or programs for financial institutions nor does it limit an        
institution's discretion to develop the types of products and services that     
it believes are best suited to its particular community, consistent with the    
CRA. The CRA requires the FDIC, in connection with its examination of a         
savings institution, to assess the institution's record of meeting the credit   
needs of its community and to take such record into account in its evaluation   
of certain applications by such institution. The CRA requires the FDIC to       
provide a written evaluation of an institution's CRA performance utilizing a    
four-tiered descriptive rating system. The Bank's latest CRA rating was         
"outstanding."                                                                  

      New York State Regulation. The Bank is also subject to provisions of
the New York State Banking Law which impose continuing and affirmative          
obligations upon banking institutions organized in New York State to serve      
the credit needs of its local community ("NYCRA") which are substantially       
similar to those imposed by the CRA. Pursuant to the NYCRA, a bank must file    
an annual NYCRA report and copies of all federal CRA reports with the Banking   
Department. The NYCRA requires the Banking Department to make an annual         
written assessment of a bank's compliance with the NYCRA, utilizing a           
four-tiered rating system, and make such assessment available to the public.    
The NYCRA also requires the Superintendent to consider a bank's NYCRA rating    
when reviewing a bank's application to engage in certain transactions,          
including mergers, asset purchases and the establishment of branch offices or   
automated teller machines, and provides that such assessment may serve as a     
basis for the denial of any such application.                                   

The Bank's NYCRA rating as of its latest examination was      
"outstanding."                                                                  

Federal Home Loan Bank System                                                   

  The Bank is a member of the FHLB of New York, which is one of 12
regional FHLBs, that administers the home financing credit function of          
savings institutions. Each FHLB serves as a reserve or central bank for its     
members within its assigned region. It is funded primarily from proceeds        
derived from the sale of consolidated obligations of the FHLB System. It        
makes loans to members (i.e., advances) in accordance with policies and         
procedures established by the board of directors of the FHLB. These policies    
and procedures are subject to the regulation and oversight of the Federal       
Housing Finance Board. All advances from the FHLB are required to be fully      
secured by sufficient collateral as determined by the FHLB. In addition, all    
long-term advances are required to provide funds for residential home           
financing.                                                                      

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     As a member, the Bank is required to purchase and maintain stock in
the FHLB of New York. At June 30, 1998, the Bank had $700,000 of FHLB stock.    
The dividend yield from FHLB stock was 7.45% at June 30, 1998. No assurance     
can be given that such dividends will continue in the future at such levels.    

    Under federal law, the FHLBs are required to provide funds for the
resolution of troubled savings institutions and to contribute to low and        
moderately priced housing programs through direct loans or interest subsidies   
on advances targeted for community investment and low- and moderate-income      
housing projects. These contributions have affected adversely the level of      
FHLB dividends paid and could continue to do so in the future. These            
contributions could also have an adverse effect on the value of FHLB stock in   
the future. A reduction in value of the Bank's FHLB stock may result in a       
corresponding reduction in the Bank's capital.                                  

 MANAGEMENT OF GREENE COUNTY BANCORP, INC.

Directors of the Company                                                        

      The Board of Directors of the Company consists of nine members, each
of whom is currently serving as a trustee of the Bank. Directors of the         
Company will serve three-year staggered terms so that approximately one-third   
of the directors will be elected at each annual meeting of stockholders. The    
class of directors whose term of office expires at the first annual meeting     
of stockholders following completion of the Reorganization consists of          
directors Whittaker, O'Grady and Smith. The class of directors whose term       
expires at the second annual meeting of stockholders following completion of    
the Reorganization consists of directors Buck, Klein and Camera. The class of   
directors whose term of office expires at the third annual meeting of           
stockholders following the completion of the Reorganization consists of         
directors Ingalls, Slutzky and Jenkins. The biographical information            
regarding these individuals is set forth under "Management of the               
Bank-Biographical Information."                                                 

Executive Officers of the Company                                               

     The following individuals are executive officers of the Company and
hold the offices set forth below opposite their names. The biographical         
information for each executive officer is set forth under "Management of the    
Bank--Biographical Information."                                                

                                                                [Download Table]


Name                 Age*  Position                             
----                 ---   --------                             
                                                                
J. Bruce Whittaker    55   President and Chief Executive Officer
Bruce P. Egger        49   Vice President and Secretary         
Edmund L. Smith, Jr.  55   Vice President and Treasurer         
Daniel T. Sager       44   Vice President                       


--------------                                                                  
*As of June 30, 1998                                                            

     The executive officers of the Company are elected annually and hold
office until their respective successors have been elected or until death,      
resignation, retirement or removal by the board.                                

    Since the formation of the Company, none of the executive officers
has received remuneration from the Company. It is not anticipated that the      
executive officers of the Company will initially receive any remuneration in    
his or her capacity as an executive officer. For information concerning         
compensation of executive officers of the Bank, see "Management of the Bank."   

Indemnification and Limitation of Liability                                     

 The Certificate of Incorporation of the Company provides that a
director or officer of the Company shall be indemnified by the Company to the   
fullest extent authorized by the Delaware General Corporation Law ("DGCL")      
against all expenses, liability and loss reasonably incurred or suffered by     
such person in connection with his or her activities as a director or officer   
or as a director or officer of another company, if the director or officer      
held such                                                                       

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position at the request of the Company. Delaware law requires that such         
director, officer, employee or agent, in order to be indemnified, must have     
acted in good faith and in a manner reasonably believed to be not opposed to    
the best interests of the Company and, with respect to any criminal action or   
proceeding, either had reasonable cause to believe such conduct was lawful or   
did not have reasonable cause to believe his or her conduct was unlawful.       

     In addition, the Certificate of Incorporation and Delaware law also
provide that the Company may maintain insurance, at its expense, to protect     
itself and any director, officer, employee or agent of the Company or another   
corporation, partnership, joint venture, trust or other enterprise against      
any expense, liability or loss, whether or not the Company has the power to     
indemnify such person against such expense, liability or loss under the DGCL.   
The Company intends to obtain such insurance.                                   

      The Certificate of Incorporation also provides that directors of the
Company shall not be personally liable to the Company or its stockholders for   
monetary damages for breach of fiduciary duty as a director, except for         
liability (i) for any breach of the director's duty of loyalty to the Company   
or its stockholders, (ii) for acts or omissions not in good faith or which      
involve intentional misconduct or a knowing violation of law, (iii) under       
Section 174 of the Delaware General Corporation Law (which relates to           
unlawful dividends or stock purchases or redemptions), or (iv) for any          
transaction from which the director derived an improper personal benefit.       

MANAGEMENT OF THE BANK

Directors of the Bank                                                           

     Upon completion of the Reorganization, the initial directors of the
Bank will consist of those persons who currently serve on the Board of          
Trustees of the Bank. The directors of the Bank will have three year terms      
which will be staggered to provide for the election of approximately            
one-third of the board members each year. Directors of the Bank will be         
elected by the Company as sole stockholder of the Bank. The proposed            
directors of the Bank are as follows:                                           

                                                        [Enlarge/Download Table]


     Director           Age *         Occupation                           Director Since  Term Expires
-----------------       ---           ----------                           --------------  ------------
                                                                                                       
Walter H. Ingalls      67      Retired Lumber Company President                 1966           2001    

J. Bruce Whittaker     55      President and Chief Executive Officer,           1987           1999    
                               Greene County Savings Bank                                              

Richard J. Buck        73      Retired Partner, Insurance Agency                1970           2000    

Raphael Klein          71      Retired Movie Theater Owner                      1986           2000    

Paul Slutzky           50      General Manager-Construction Company             1992           2001    

Anthony Camera, Jr.    72      Retired President and Chief Executive            1986           2000    
                               Officer, Mutual Insurance Company                                       

David H. Jenkins, DVM  44      Veterinarian/Owner-Catskill Animal Hospital      1996           2001    

Dennis R. O'Grady      58      Pharmacist/Co-Owner-Mikhitarian Pharmacy         1981           1999    

Martin C. Smith        53      Employee-Main Bros. Oil Co., Inc.                1993           1999    


--------------                                                                  
*As of June 30, 1998                                                            

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Executive Officers of the Bank                                                  

    The following table sets forth certain information (as of June 30,
1998) regarding the executive officers of the Bank, all of whom currently       
serve in their indicated position as executive officers of the Bank.            

                                                                [Download Table]


Name                 Age  Position                             
----                 ---  --------                             
                                                               
J. Bruce Whittaker   55   President and Chief Executive Officer

Bruce P. Egger       49   Vice President and Secretary         

Edmund L. Smith, Jr. 55   Vice President and Treasurer         

Daniel T. Sager      44   Vice President-Lending               


      The executive officers of the Bank will be elected annually and will
hold office until the next annual meeting of the board of directors of the      
Bank held immediately after the annual meeting of stockholders of the Bank,     
and until their successors are elected and qualified, or until death,           
resignation, retirement or removal by the board of directors.                   

Biographical Information                                                        

Trustees of the Bank                                          

    J. Bruce Whittaker is President and Chief Executive Officer of the
     Bank, and has served in that position since 1987. Mr. Whittaker has
     been affiliated with the Bank in various capacities since 1972. Mr.
Whittaker was appointed to the Board of Trustees in 1987.     

         Walter H. Ingalls is the Chairman of the Board. Mr. Ingalls is retired.
   Prior to his retirement, Mr. Ingalls was the President of the GNH
Lumber Co., a lumber company located in Norton Hill, New York.

       Richard J. Buck is retired. Prior to his retirement, he was a partner
         with Grossman Agency, a general insurance agency in Catskill, New York.

        Raphael Klein is retired. Prior to his retirement, he was the co-owner
of Klein Theaters, a movie theater chain in Hudson, New York. 

        Paul Slutzky is the General Manager of I. & O. A. Slutzky Constr. Co.,
a construction company located in Hunter, New York.           

 Anthony Camera, Jr. is retired. Prior to his retirement, he was
       President of Commercial Mutual Insurance Co., an insurance company in
Catskill, New York.                                           

   David H. Jenkins, DVM is a veterinarian and the owner of Catskill
Animal Hospital, Catskill, New York.                          

   Dennis R. O'Grady is a pharmacist and the co-owner of Mikhitarian
Pharmacy located in Catskill, New York.                       

        Martin C. Smith is currently employed by Main Bros. Oil Co., Inc., and
        is the former owner of R.E. Smith Fuel Company, which was purchased by
Main Bros. Oil Co., Inc., located in Albany, New York.        

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Executive Officers of the Bank Who Are Not Trustees           

       Bruce P. Egger has served as Vice President and Secretary of the Bank
        since 1987 and has been affiliated with the Bank in various capacities
       since 1977. Prior to that time, Mr. Egger worked in the retail trade.

         Edmund L. Smith, Jr., has served as Vice President and Treasurer of the
  Bank since 1988 and has been affiliated with the Bank in various
        capacities since 1975. Prior to that time, Mr. Smith was the bursar of
Columbia-Greene Community College.                            

        Daniel T. Sager has served as Vice President-Lending of the Bank since
        1995 and has been affiliated with the Bank in various capacities since
        1987. Prior to that time, Mr. Sager was employed as branch manager for
a commercial bank.                                            

Meetings and Committees of the Bank's Board                                     

The Board of Trustees of the Bank meets monthly and may have  
additional special meetings as may be called by the Chairman or as otherwise    
provided by law. During the year ended June 30, 1998, the board held 13         
meetings. No trustee attended fewer than 75% in the aggregate of the total      
number of meetings of the board or board committees on which such trustee       
served during the period. The Board of Trustees of the Bank has the following   
standing committees: Audit Committee, Personnel Committee, Appraisal and Loan   
Committee, Re-Inspection Committee and Executive Committee.                     

Board of Directors and Committees of the Company after the Reorganization       

     Following the Reorganization, the board of directors of the Company
is expected to meet monthly, or more often as may be necessary. The board of    
directors initially is expected to have a standing executive committee and an   
audit committee. The board of directors may, by resolution, designate one or    
more additional committees.                                                     

     The executive committee initially will consist of the following six
directors of the Company: Messrs. Buck, Ingalls, Klein, Slutzky, Whittaker      
and Smith. The executive committee is expected to meet as necessary when the    
board is not in session to exercise general control and supervision in all      
matters pertaining to the interests of the Company, subject at all times to     
the direction of the board of directors. The executive committee may also       
serve as the nominating committee for the purpose of identifying, evaluating    
and recommending potential candidates for election to the board.                

  The audit committee initially will consist of the following four
directors of the Company: Messrs. Ingalls, Camera, Jenkins and O'Grady. The     
audit committee is expected to meet at least quarterly to examine and approve   
the audit report prepared by the independent auditors of the Bank, to review    
and recommend the independent auditors to be engaged by the Company, to         
review the internal audit function and internal accounting controls of the      
Company, and to review and approve audit policies.                              

Compensation of Directors                                                       

     Directors of the Bank will receive an annual retainer of $6,000 and
a fee of $500 per meeting for attendance at Board and Committee meetings.       
Directors of the Bank and the Company who are also employees of the Bank and    
the Company are not eligible to receive Board fees. Initially, no separate      
compensation will be paid to directors for service on the Board of Directors    
or Board committees of the Company.                                             

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Executive Compensation                                                          

    Summary Compensation Table. The following table sets forth for the
year ended June 30, 1998, certain information as to the total remuneration      
paid by the Bank to the Chief Executive Officer of the Bank. No other           
executive officer of the Bank during the year ended June 30, 1998 received      
total annual compensation in excess of $100,000.                                

                                                        [Enlarge/Download Table]


                                      Annual Compensation (1)                         Long-Term Compensation           
                                 -----------------------------------  -------------------------------------------------
                                                                              Awards            Payouts                
                                                                      -----------------------   -------                
                                                           Other                                                       
                                                           Annual     Restricted     Options/              All Other   
                                                        Compensation  Stock           SARS       LTIP      Compensation
Name and Principal Position     Salary       Bonus          (2)       Awards(3)       (#)(4)     Payouts       (5)     
---------------------------    --------  ------------   ------------  ----------     --------    -------   ------------
                                                                                                                       
J. Bruce Whittaker             $120,000     $2,300           --          --             --         --         $3,600   
President and Chief Executive                                                                                          
  Officer                                                                                                              


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

(1)      In accordance with the rules on executive officer and director         
  compensation disclosure adopted by the SEC, Summary Compensation
        information is excluded for the years ended June 30, 1997 and 1996, as
the Bank was not a public company during such periods.        
(2)      The Bank also provides each qualifying employee, including Mr.         
     Whittaker, life insurance equal to twice the employee's salary. The
     aggregate value of this benefit to Mr. Whittaker did not exceed the
        lesser of $50,000 or 10% of the total annual salary and bonus reported
for such officer.                                             
(3)      Does not include awards pursuant to the Stock Award Plan, as such      
 awards were not earned, vested or granted in fiscal 1998. For a
         discussion of the terms of the Stock Award Plan that are intended to be
adopted by the Company, see "--Stock Award Plan."             
(4)      No stock options or SARs were earned or granted in fiscal 1998. For a  
       discussion of the Stock Option Plan that is intended to be adopted by
the Company, see "Stock Option Plan."                         
(5)      Consists of the Bank's contribution to the Bank's 401(k) Plan on behalf
of Mr. Whittaker.                                             

Report of Independent Compensation Consultant. Pursuant to    
regulations of the Department applicable to the Reorganization, the Bank must   
obtain the opinion of an independent compensation consultant as to whether or   
not the total compensation for the executive officers and trustees/directors    
of the Bank, viewed as a whole and on an individual basis, is reasonable and    
proper in comparison to the compensation provided to executive officers and     
directors of similar publicly-traded financial institutions. The Bank has       
obtained an opinion from William M. Mercer, Incorporated, Rochester, New        
York, which indicates that, based upon published professional survey data of    
similarly situated publicly-traded financial institutions operating in the      
relevant markets as of October 1, 1998 with respect to the total cash           
compensation (base salary and annual incentive) for executive officers and      
total compensation for trustees of the Bank, such compensation, viewed as a     
whole and on an individual basis, is reasonable and proper in comparison to     
the compensation provided to similarly situated publicly-traded financial       
institutions, and that, with respect to the amount of shares of Common Stock    
expected to be reserved under the ESOP, the Stock Award Plan and Stock Option   
Plan as a whole, such amounts reserved for granting are reasonable in           
comparison to similar publicly-traded financial institutions.                   

   Compensation of Officers and Directors through Benefit Plans. The
Bank's current tax-qualified employee pension benefit plans consist of a        
defined benefit pension plan and a defined contribution plan with a salary      
deferral feature under 401(k) of the Internal Revenue Code. As a result of      
the Reorganization, the Company and the Bank will be able to compensate         
employees with stock-based compensation pursuant to the ESOP, the Stock Award   
Plan and the Stock Option Plan described below.                                 

    Employment Agreement. The Bank intends to enter into an employment
agreement with its President and Chief Executive Officer, J. Bruce Whittaker.   
The agreement will have a term of 36 months. On each anniversary date, the      
agreement may be extended for an additional twelve months, so that the          
remaining term will be 36 months. If the agreement is not renewed, the          
agreement will expire 36 months following the anniversary date. Under the       
agreement, the current Base Salary for Mr. Whittaker (as defined in the         
agreement) is $125,000. The Base Salary may be increased                        

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but not decreased. In addition to the Base Salary, the agreement provides       
for, among other things, participation in retirement plans and other employee   
and fringe benefits applicable to executive personnel. In addition to the       
above, the Bank will provide Mr. Whittaker and his dependents with continuing   
health care coverage upon Mr. Whittaker's retirement or other termination of    
employment after attainment of age 55 with 25 years of service, in              
substantially the same amount as provided to Mr. Whittaker and his dependents   
prior to the termination of his employment. Such coverage, which will survive   
the termination or expiration of the agreement, will cease upon Mr.             
Whittaker's attainment of age 65. The agreement provides for termination by     
the Bank for cause at any time. In the event the Bank terminates the            
executive's employment for reasons other than disability, retirement, or for    
cause, or in the event of the executive's resignation from the Bank (such       
resignation to occur within the period or periods set forth in the employment   
agreement) upon (i) failure to re-elect the executive to his current offices,   
(ii) a material change in the executive's functions, duties or                  
responsibilities, or relocation of his principal place of employment by more    
than 30 miles, (iii) liquidation or dissolution of the Bank or the Company,     
(iv) a breach of the agreement by the Bank, or (v) following a change in        
control of the Bank or the Company, the executive, or in the event of death,    
his beneficiary, would be entitled to severance pay in an amount equal to       
three times the highest Base Salary and the highest bonus paid during any of    
the last three years. Mr. Whittaker would receive an aggregate of $375,000      
pursuant to his employment agreement upon a change in control of the Bank or    
the Company, based upon his current level of compensation. The Bank would       
also continue the executive's life, dental and disability coverage for 36       
months from the date of termination, and would continue his health coverage     
until Mr. Whittaker attains age 65 (as discussed above). In the event the       
payments to the executive would include an "excess parachute payment" as        
defined by Code Section 280G (relating to payments made in connection with a    
change in control), the payments would be reduced in order to avoid having an   
excess parachute payment.                                                       

   Under the agreement, the executive's employment may be terminated
upon his retirement in accordance with any retirement policy established on     
behalf of the executive and with his consent. Upon the executive's              
retirement, he will be entitled to all benefits available to him under any      
retirement or other benefit plan maintained by the Bank. In the event of the    
executive's disability for a period of six months, the Bank may terminate the   
agreement provided that the Bank will be obligated to pay him his Base Salary   
for the remaining term of the agreement or one year, whichever is longer,       
reduced by any benefits paid to the executive pursuant to any disability        
insurance policy or similar arrangement maintained by the Bank. In the event    
of the executive's death, the Bank will pay his Base Salary to his named        
beneficiaries for one year following his death, and will also continue          
medical, dental, and other benefits to his family for one year. The             
employment agreement provides that, following his termination of employment,    
the executive will not compete with the Bank for a period of one year.          

  Defined Contribution Plan. Effective September 1, 1995, the Bank
adopted the Financial Institutions Thrift Plan (the "Prior Plan"). In           
connection with the Reorganization, effective October 1, 1998, the Bank         
withdrew from the Prior Plan and adopted The Bank of Greene County Employees'   
Savings & Profit Sharing Plan and Trust (the "Plan") in order to permit the     
investment of Plan assets in Common Stock. Employees are eligible to join the   
Plan on the first of the month following completion of one year of continuous   
employment (during which 1,000 hours are completed). The first year             
eligibility period runs from the date of hire to the anniversary of such        
date. If an employee does not satisfy the eligibility requirements during       
such period then the next eligibility period shall be the calendar year.        
Employees are eligible to contribute, on a pre-tax basis, up to 15% of their    
eligible salary, in increments of 1%. The Bank shall make a matching            
contribution equal to 50% of a member's contributions on up to 6% of a          
member's compensation. In addition, the Bank may make an additional             
discretionary contribution allocated among members' accounts on the basis of    
compensation. All employee contributions and earnings thereon under the Plan    
are at all times fully 100% vested. A member vests in employer matching and     
discretionary contributions at the rate of 20% per year beginning in the        
second year of employment and continuing until the member is 100% vested        
after six years of employment. Employees are entitled to borrow, within tax     
law limits, from amounts allocated to their accounts.                           

     Plan benefits will be paid to each member in a lump sum or in equal
payments over a fixed period upon termination, disability or death. In          
addition, the Plan permits employees to withdraw salary reduction               
contributions prior to age 59-1/2 or termination in the event the employee      
suffers a financial hardship. In certain circumstances, the Plan permits        
employees to withdraw the Bank's matching contributions to their accounts.      
The Plan permits employees to direct the investment of their own accounts       
into various investment options.                                                

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     At December 31, 1997, the market value of the Prior Plan trust fund
was approximately $899,856. The total contribution (i.e, both the employee      
and Bank contributions) to the Prior Plan for the Prior Plan year ended         
December 31, 1997, was approximately $109,654.                                  

Defined Benefit Pension Plan. The Bank maintains the Financial
Institutions Retirement Fund, which is a qualified, tax-exempt defined          
benefit plan ("Retirement Plan"). All employees age 21 or older who have        
worked at the Bank for a period of one year in which they have 1,000 or more    
hours of service are eligible for membership in the Plan. Once eligible, an     
employee must have been credited with 1,000 or more hours of service with the   
Bank during the year in order to accrue benefits under the Retirement Plan.     
The Bank annually contributes an amount to the Retirement Plan necessary to     
satisfy the actuarially determined minimum funding requirements in accordance   
with the Employee Retirement Income Security Act ("ERISA").                     

     The regular form of all retirement benefits (i.e., normal, early or
disability) is a life annuity with a guaranteed term of 10 years. For a         
married participant, the normal form of benefit is a joint and survivor         
annuity where, upon the participant's death, the participant's spouse is        
entitled to receive a benefit equal to 50% of that paid during the              
participant's lifetime. An optional form of benefit may be selected instead     
of the normal form of benefits. These optional forms include various annuity    
forms as well as a lump sum payment after age 55. Benefits payable upon death   
may be made in a lump sum, installments over 10 years, or a lifetime annuity.   

 The normal retirement benefit payable at or after age 65, is an
amount equal to 1.5% multiplied by years of benefit service (not to exceed      
30) times average compensation based on the average of the five years           
providing the highest average. A reduced benefit is payable upon retirement     
at age 55 at or after completion of five years of service. A member is fully    
vested in his account upon completion of 5 or more years of employment or       
upon attaining normal retirement age.                                           

  The following table indicates the annual retirement benefit that
would be payable under the Retirement Plan upon retirement at age 65 in         
calendar year 1998, expressed in the form of a single life annuity for the      
average salary and benefit service classifications specified below.             

                                                                [Download Table]


Highest Five-Year  Years of Service and Benefit Payable at Retirement(1)
     Average       -----------------------------------------------------
  Compensation        15            20            25            30      
-----------------     --            --            --            --      
                                                                        
     $50,000        $11,250      $15,000       $18,750       $22,500    
     $75,000         16,875       22,500        28,125        33,750    
    $100,000         22,500       30,000        37,500        45,000    
    $125,000         28,125       37,500        46,875        56,250    
    $150,000         33,750       45,000        56,250        67,500    


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

(1)      No additional credit is received for years of service in excess of 30; 
        however, increases in compensation after 30 years will generally cause
an increase in benefits.                                      

      As of June 30, 1998, Mr. J. Bruce Whittaker had 26 years of credited
service (i.e., benefit service), under the Retirement Plan.                     

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Employee Stock Ownership Plan and Trust. The Bank intends to  
implement an employee stock ownership plan ("ESOP") in connection with the      
Reorganization. Employees with at least one year of employment with the Bank    
and who have attained age 21 are eligible to participate. As part of the        
Reorganization, the ESOP intends to borrow funds from the Company and use       
those funds to purchase a number of shares equal to up to 8% of the Minority    
Ownership Interest. Collateral for the loan will be the Common Stock            
purchased by the ESOP. The loan will be repaid principally from the Bank's      
discretionary contributions to the ESOP over a period of up to ten years. It    
is anticipated that the interest rate for the loan will be a floating rate      
equal to the Prime Rate published in the Wall Street Journal at the time of     
the Offering. Shares purchased by the ESOP will be held in a suspense account   
for allocation among participants as the loan is repaid.                        

 Contributions to the ESOP and shares released from the suspense
account in an amount proportional to the repayment of the ESOP loan will be     
allocated among ESOP participants on the basis of compensation in the year of   
allocation. For this purpose, compensation is defined as wages reported on      
federal income tax form W-2 but not in excess of Code Section 401(a)(17)        
limit. Participants in the ESOP will receive credit for service prior to the    
effective date of the ESOP. A participant is 100% vested in his benefits        
after five years or upon normal retirement (as defined in the ESOP), early      
retirement, disability or death of the participant. A participant who           
terminates employment for reasons other than death, retirement, or disability   
prior to five years of credited service will forfeit his benefits under the     
ESOP. Benefits will be payable in the form of Common Stock and/or cash upon     
death, retirement, early retirement, disability or separation from service.     
Alternatively, a participant may request that the benefits be paid entirely     
in the form of Common Stock or entirely in cash. The Bank's contributions to    
the ESOP are discretionary, subject to the loan terms and tax law limits,       
and, therefore, benefits payable under the ESOP cannot be estimated. Pursuant   
to Statement of Position 93-6, (Employers' Accounting for Employee Stock        
Ownership Plans), the Bank is required to record compensation expense in an     
amount equal to the fair market value of the shares released from the           
suspense account.                                                               

 In connection with the establishment of the ESOP, the Bank will
establish a committee of nonemployee directors to administer the ESOP. The      
Bank will either appoint its non-employee directors or an independent           
financial institution to serve as trustee of the ESOP. The ESOP trustee,        
subject to its fiduciary duty, must vote all allocated shares held in the       
ESOP in accordance with the instructions of participating employees. Under      
the ESOP, nondirected shares, and shares held in the suspense account, will     
be voted in a manner calculated to most accurately reflect the instructions     
it has received from participants regarding the allocated stock so long as      
such vote is in accordance with the provisions of ERISA.                        

     Stock Option Plan. At a meeting of the Company's stockholders to be
held no earlier than six months after the completion of the Reorganization,     
the board of directors intends to submit for shareholder approval a Stock       
Option Plan for directors and officers of the Bank and of the Company. If       
approved by the stockholders, Common Stock in an aggregate amount equal to      
10% of the Minority Ownership Interest would be reserved for issuance by the    
Company upon the exercise of the stock options granted under the Stock Option   
Plan. Ten percent of the Minority Ownership Interest would amount to 73,694     
shares, 86,603 shares, 99,594 shares and 114,533 shares at the minimum,         
midpoint, maximum and adjusted maximum of the Offering Range, respectively.     
If the plan is approved within one year of the completion of the                
Reorganization, no options would be granted under the Stock Option Plan until   
the date on which shareholder approval is received.                             

  The exercise price of the options granted under the Stock Option
Plan will be equal to the fair market value of the shares on the date of        
grant of the stock options. If the Stock Option Plan is adopted within one      
year following the Offering, options will become exercisable at a rate of 20%   
at the end of each twelve (12) months of service with the Bank after the date   
of grant, subject to early vesting in the event of death or disability.         
Options granted under the Stock Option Plan would be adjusted for capital       
changes such as stock splits and stock dividends. Notwithstanding the           
foregoing, awards will be 100% vested upon termination of employment due to     
death or disability, and if the Stock Option Plan is adopted more than 12       
months after the Offering, awards would be 100% vested upon normal retirement   
or a change in control of the Bank or the Company. Under FDIC and Department    
rules, if the Stock Option Plan is adopted within the first 12 months after     
completion of the Offering, no individual officer can receive more than 25%     
of the awards under the plan, no outside director can receive more than 5% of   
the awards under the plan, and all outside                                      

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directors as a group can receive no more than 30% of the awards under the       
plan in the aggregate. No determination has been made as to the specific        
terms of the plan or as to awards thereunder.                                   

The Stock Option Plan would be administered by a committee of 
non-employee members of the Company's board of directors. Options granted       
under the Stock Option Plan to employees could be "incentive" stock options     
designed to result in beneficial tax treatment to the employee but no tax       
deduction to the Company. Non-qualified stock options could also be granted     
under the Stock Option Plan, and will be granted to the non-employee            
directors who receive grants of stock options. In the event an option           
recipient terminated his employment or service as an employee or director,      
the options would terminate during certain specified periods. The Stock         
Option Plan will terminate ten years following its adoption, unless earlier     
terminated by the Company.                                                      

    Stock Award Plan. At a meeting of the Company's stockholders to be
held no earlier than six months after the completion of the Reorganization,     
the board of directors also intends to submit the Stock Award Plan for          
shareholder approval. The Stock Award Plan will provide the Bank's directors    
and officers an ownership interest in the Company in a manner designed to       
encourage them to continue their service with the Bank. The Bank will           
contribute funds to the restricted stock plan from time to time to enable it    
to acquire an aggregate amount of Common Stock equal to up to 3% of the         
shares of the Minority Ownership Interest if the restricted stock plan is       
adopted within one year of completion of the Offering, or up to 5% of the       
Minority Ownership Interest if the restricted stock plan is adopted more than   
a year after completion of the Offering. Five percent of the Minority           
Ownership Interest would amount to 36,847 shares, 43,301 shares, 49,797         
shares or 57,266 shares at the minimum, midpoint, maximum or adjusted maximum   
of the Offering Range, respectively. In the event that additional authorized    
but unissued shares would be acquired by the Stock Award Plan after the         
Offering, the interests of existing stockholders would be diluted. The          
executive officers and directors will be awarded Common Stock under the Stock   
Award Plan without having to pay cash for the shares. No awards under the       
Stock Award Plan will be made until the date the Stock Award Plan is approved   
by the Company's stockholders.                                                  

Awards under the Stock Award Plan would be nontransferable and
nonassignable, and during the lifetime of the recipient could only be earned    
by the director or officer. If the Stock Award Plan is adopted within one       
year following completion of the Offering, the shares which are subject to an   
award would vest and be earned by the recipient at a rate of 20% of the         
shares awarded at the end of each full twelve (12) months of service with the   
Bank after the date of grant of the award. Awards would be adjusted for         
capital changes such as stock dividends and stock splits. Notwithstanding the   
foregoing, awards would be 100% vested upon termination of employment or        
service due to death or disability, and if the Stock Award Plan is adopted      
more than 12 months after completion of the Reorganization, awards would be     
100% vested upon normal retirement or a change in control of the Bank or the    
Company. If employment or service were to terminate for other reasons, the      
award recipient would forfeit any nonvested award. If employment or service     
is terminated for cause (as would be defined in the Stock Award Plan), shares   
not already delivered under the Stock Award Plan would be forfeited. Under      
FDIC and Department rules, if the Stock Award Plan is adopted within the        
first 12 months after completion of the Reorganization and Offering, shares     
of Common Stock granted under the restricted stock plan may not exceed 3% of    
the Minority Ownership Interest, no individual officer can receive more than    
25% of the awards under the plan, no outside director can receive more than     
5% of the awards under the plan, and all outside directors as a group can       
receive no more than 30% of the awards under the plan in the aggregate. No      
determination has been made as to the specific terms of the plan or as to       
awards thereunder. The Stock Award Plan would be administered by a committee    
of non-employee members of the Company's board of directors. The Stock Award    
Plan will terminate fifteen years following its adoption, unless earlier        
terminated by the Company.                                                      

When shares become vested under the Stock Award Plan, the     
participant will recognize income equal to the fair market value of the         
Common Stock earned, determined as of the date of vesting, unless the           
recipient makes an election under ss. 83(b) of the Code to be taxed earlier.    
The amount of income recognized by the participant would be a deductible        
expense for tax purposes for the Company. If the Stock Award Plan is adopted    
within one year following completion of the Reorganization and the Offering,    
dividends and other earnings will accrue and be payable to the award            
recipient when the shares vest. If the Stock Award Plan is adopted within one   
year following completion of the Reorganization and the Offering, shares not    
yet vested under the Stock Award Plan will be voted by the trustee of the       
Stock Award Plan, taking into account the best interests of the recipients of   
the Stock Award Plan grants. If the Stock                                       

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Award Plan is adopted more than one year following completion of the            
Reorganization and Offering, dividends declared on unvested shares will be      
distributed to the participant when paid, and the participant will be           
entitled to vote the unvested shares.                                           

Indebtedness of Management                                                      

Under New York Banking law, the Bank, as a mutual institution,
cannot make a loan to a trustee or a person who is an "executive officer" for   
regulatory purposes, except for loans made to executive officers that are       
secured by a first mortgage on a primary residence or by a deposit account at   
the Bank. Any such loans that are outstanding have been made in the ordinary    
course of business on the same terms and conditions as the Bank would make to   
any other customer and do not involve more than a normal risk of                
collectibility or present other unfavorable features. Following the             
Reorganization, the Bank will not be subject to this restriction in             
connection with loans to directors and executive officers.                      

The Bank also is subject to Sections 22(h), 23A and 23B of the
Federal Reserve Act which limit the amount of credit and other transactions     
between a bank and its executive officers and its affiliates, prescribes        
terms and conditions for bank affiliate transactions deemed to be consistent    
with safe and sound banking practices, and restricts the types of collateral    
security permitted in connection with a bank's extension of credit to an        
affiliate.                                                                      

RESTRICTIONS ON ACQUISITION OF THE COMPANY

    The Mutual Holding Company Structure. Under New York law, the Plan
of Reorganization, and the Company's governing corporate instruments, at        
least 51% of the Company's voting shares must be owned by the Mutual Company.   
The Mutual Company will be controlled by its board of trustees, who will        
consist of all persons (except for one) who also are members of the board of    
directors of the Company and the Bank. The Mutual Company will be able to       
elect all members of the board of directors of the Company, and as a general    
matter, will be able to control the outcome of all matters presented to the     
stockholders of the Company for resolution by vote, except for matters that     
require a vote greater than a majority. The Mutual Company, acting through      
its board of trustees, will be able to control the business and operations of   
the Company and the Bank, and will be able to prevent any challenge to the      
ownership or control of the Company by Minority Stockholders. Accordingly, a    
change in control of the Company and the Bank cannot occur unless the Mutual    
Company first converts to the stock form of organization. Although New York     
law, applicable regulations and the Plan of Reorganization permit the Mutual    
Company to convert from the mutual to the capital stock form of organization,   
it is not anticipated that a conversion of the Mutual Company will occur in     
the foreseeable future.                                                         

In addition to the anti-takeover aspects of the Mutual Company
structure, the following is a general summary of certain provisions of the      
Company's Certificate of Incorporation and bylaws and certain other             
regulatory provisions that will restrict the ability of stockholders to         
influence management policies, and that may be deemed to have an                
"anti-takeover" effect. The following description of certain of these           
provisions is necessarily general and, with respect to provisions contained     
in the Company's Certificate of Incorporation and bylaws and the Bank's         
proposed stock charter and bylaws, reference should be made in each case to     
the document in question, each of which is part of the Bank's application to    
the Superintendent and the Company's Registration Statement filed with the      
SEC. See "Additional Information." The following discussion does not reflect    
the powers and provisions of the Bank's charter.                                

Provisions of the Company's Certificate of Incorporation and Bylaws             

Restrictions on Call of Special Meetings. The Certificate of  
Incorporation provides that a special meeting of stockholders may be called     
by the Chairman of the Board of the Company or pursuant to a resolution         
adopted by a majority of the board of directors. Stockholders are not           
authorized to call a special meeting of stockholders.                           

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Absence of Cumulative Voting. The Certificate of Incorporation
provides that there shall be no cumulative voting rights in the election of     
directors.                                                                      

Limitation on Voting Rights. The Certificate of Incorporation 
provides that (i) no person shall directly or indirectly offer to acquire or    
acquire the beneficial ownership of more than 5% of any class of equity         
security of the Company, inclusive of shares of such class held by the Mutual   
Company (provided that such limitation shall not apply to the Mutual Company    
or any tax-qualified employee stock benefit plans maintained by the Company);   
and that (ii) shares beneficially owned in violation of the stock ownership     
restriction described above shall not be entitled to vote and shall not be      
voted by any person or counted as voting stock in connection with any matter    
submitted to a vote of stockholders. For these purposes, a person (including    
management) who has obtained the right to vote shares of the Common Stock       
pursuant to revocable proxies shall not be deemed to be the "beneficial         
owner" of those shares if that person is not otherwise deemed to be a           
beneficial owner of those shares.                                               

      Amendments to Certificate of Incorporation and Bylaws. Amendments to
the Certificate of Incorporation must be approved by the Company's board of     
directors and also by a majority of the outstanding shares of the Company's     
voting stock; provided, however, that approval by at least 80% of the           
outstanding voting stock is generally required for certain provisions (i.e.,    
provisions relating to the call of special stockholder meetings, cumulative     
voting, limitation on voting rights and director liability).                    

The bylaws may be amended by the affirmative vote of the total
number of directors of the Company or the affirmative vote of at least 80% of   
the total votes eligible to be voted at a duly constituted meeting of           
stockholders.                                                                   

Federal Reserve Board Regulations                                               

The Change in Bank Control Act and the BHCA, together with the
Federal Reserve Board regulations under those acts, require that the consent    
of the Federal Reserve Board be obtained prior to any person or company         
acquiring "control" of a bank holding company. Control is conclusively          
presumed to exist if an individual or company acquires more than 25% of any     
class of voting stock of the bank holding company. Control is rebuttably        
presumed to exist if the person acquires more than 10% of any class of voting   
stock of a bank holding company if either (i) the holding company has           
registered securities under Section 12 of the Exchange Act or (ii) no other     
person will own a greater percentage of that class of voting securities         
immediately after the transaction. The regulations provide a procedure to       
rebut the rebuttable control presumption. Since the Company's Common Stock      
will be registered under Section 12 of the Exchange Act, any acquisition of     
10% or more of the Company's Common Stock will give rise to a rebuttable        
presumption that the acquiror of such stock controls the Company, requiring     
the acquiror, prior to acquiring such stock, to rebut the presumption of        
control to the satisfaction of the Federal Reserve Board or obtain Federal      
Reserve Board approval for the acquisition of control. Restrictions             
applicable to the operations of bank holding companies may deter companies      
from seeking to obtain control of the Company. See "Regulation."                

New York Banking Law                                                            

      In addition to federal law, the New York State Banking Law generally
requires prior approval of the New York State Banking Board before any action   
is taken that causes any entity or person to acquire direct or indirect         
control of a banking institution that is organized in New York State. Control   
is presumed to exist if any company or person directly or indirectly owns,      
controls or holds with power to vote 10% or more of the voting stock of a       
banking institution or of any company or person that owns, controls or holds    
with power to vote 10% or more of the voting stock of a banking institution.    

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 DESCRIPTION OF CAPITAL STOCK OF THE COMPANY

General                                                                         

     The Company is authorized to issue 4,000,000 shares of Common Stock
having a par value of $.10 per share. The Company currently expects to issue    
between 1,584,009 and 2,143,071 shares, with an adjusted maximum of 2,464,532   
shares, of Common Stock and no shares of preferred stock in the Reorganization. 
Each share of the Common Stock will have the same relative rights as, and will  
be identical in all respects with, each other share of the Common Stock. Upon   
payment of the purchase price for the Common Stock, in accordance with the Plan 
of Reorganization, all such stock will be duly authorized, fully paid, validly  
issued, and non-assessable.                                                     

         The Common Stock of the Company will represent nonwithdrawable capital,
will not be an account of an insurable type, and will not be insured by the     
FDIC.                                                                           

Common Stock                                                                    

         Voting Rights. Under Delaware law, the holders of the Common Stock will
possess exclusive voting power in the Company. Each stockholder will be entitled
to one vote for each share held on all matters voted upon by stockholders,      
except as discussed in "Restrictions on Acquisition of the Company--Provisions  
of the Company's Certificate of Incorporation and Bylaws--Limitation on Voting  
Rights." There will be no right to cumulate votes in the election of directors. 
If the Company issues preferred stock, subsequent to the Reorganization, holders
of the preferred stock may also possess voting rights.                          

        Dividends. Upon consummation of the Reorganization, the Company's only
asset will be investments made with the net proceeds of the Offering, the ESOP  
loan and the Bank's common stock. The payment of dividends by the Company is    
subject to limitations that are imposed by law and applicable regulation. The   
Company's source for the payment of cash dividends may in the future depend on  
the receipt of dividends from the Bank. See "Dividend Policy." The holders of   
Common Stock will be entitled to receive and share equally in such dividends as 
may be declared by the board of directors of the Company out of funds legally   
available therefor. If the Company issues preferred stock, the holders thereof  
may have a priority over the holders of the Common Stock with respect to        
dividends.                                                                      

         Liquidation or Dissolution. In the unlikely event of the liquidation or
dissolution of the Company, the holders of the Common Stock will be entitled to 
receive -- after payment or provision for payment of all debts and liabilities  
of the Company (including all deposits in the Bank and accrued interest thereon)
and after distribution of the liquidation account established upon completion of
the Offering for the benefit of Eligible Account Holders and Supplemental       
Eligible Account Holders who continue their deposit accounts at the Bank - all  
assets of the Company available for distribution, in cash or in kind. See "The  
Reorganization and Offering--Liquidation Rights." If preferred stock is issued  
subsequent to the Offering, the holders thereof may have a priority over the    
holders of Common Stock in the event of liquidation or dissolution.             

        No Preemptive Rights. Holders of the Common Stock will not be entitled
to preemptive rights with respect to any shares that may be issued. The Common  
Stock will not be subject to call for redemption, and, upon receipt by the      
Company of the full purchase price therefor, each share of the Common Stock will
be fully paid and nonassessable.                                                

TRANSFER AGENT AND REGISTRAR

        American Securities Transfer & Trust, Inc., Denver, Colorado, will act
as the transfer agent and registrar for the Common Stock.                       

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 LEGAL AND TAX MATTERS

The legality of the Common Stock and the federal income tax   
consequences of the Reorganization will be passed upon for the Bank and the     
Company by the firm of Luse Lehman Gorman Pomerenk & Schick, P.C., Washington,  
D.C., special counsel to the Company and the Bank. The New York income tax      
consequences of the Reorganization will be passed upon for the Company and the  
Bank by PricewaterhouseCoopers, LLP. The federal income tax consequences of     
certain matters relating to the establishment of the Charitable Foundation will 
be passed upon for the Company and the Bank by PricewaterhouseCoopers, LLP.     
Certain legal matters will be passed upon for Friedman Billings, Ramsey & Co,   
Inc. by Patton Boggs, LLC, Washington, D.C.                                     

 EXPERTS

       The financial statements of Greene County Savings Bank as of June 30,
1998 and for each of the years in the two-year period ended June 30, 1998 have  
been included herein and in the registration statement in reliance upon the     
report of PricewaterhouseCoopers, LLP, independent certified public accountants,
appearing elsewhere herein, and upon the authority of said firm as "Experts" in 
accounting and auditing.                                                        

      FinPro has consented to the publication herein of the summary of its
report to the Bank and the Company setting forth its belief as to the estimated 
pro forma market value of the Common Stock upon completion of the Reorganization
and its valuation with respect to Subscription Rights.                          

ADDITIONAL INFORMATION

         The Company has filed with the SEC a registration statement under the
Securities Act with respect to the Common Stock offered hereby. As permitted by 
the rules and regulations of the SEC, this Prospectus does not contain all the  
information set forth in the registration statement. Such information can be    
examined without charge at the public reference facilities of the SEC located at
450 Fifth Street, NW, Washington, D.C. 20549, and copies of such material can be
obtained from the SEC at prescribed rates. The SEC maintains a web site that    
contains reports, proxy and information statements and other information        
regarding issuers that file electronically with the SEC. The address of this web
site is http://www.sec.gov. The statements contained herein as to the contents  
of any contract or other document filed as an exhibit to the registration       
statement are, of necessity, brief descriptions thereof and are not necessarily 
complete but do contain all material information regarding such documents; each 
such statement is qualified by reference to such contract or document.          

       The Bank has filed an Application with the Department with respect to
the Reorganization. Pursuant to the rules and regulations of the Department,    
this Prospectus omits certain information contained in that Application. The    
Application may be examined at the office of the Department, 2 Rector Street,   
New York, New York, and at the Bank's main office at 425 Main Street, Catskill, 
New York, 12414-1300.                                                           

       In connection with the Offering, the Company will register the Common
Stock with the SEC under Section 12(g) of the Exchange Act; and, upon such      
registration, the Company and the holders of its Common Stock will become       
subject to the proxy solicitation rules, reporting requirements and restrictions
on stock purchases and sales by directors, officers and greater than 10%        
stockholders, the annual and periodic reporting and certain other requirements  
of the Exchange Act. Under the Plan, the Company has undertaken that it will not
terminate such registration for a period of at least three years following the  
Reorganization.                                                                 

       A copy of the Certificate of Incorporation and bylaws of the Company,
as well as the Plan of Reorganization, are available without charge from the    
Bank by contacting the Secretary, 425 Main Street, Catskill, New York, 12414-   
1300; (518) 943-3700. Copies of the Independent Valuation are available for     
inspection at each of the Bank's offices.                                       
offices.                                                                        

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GREENE COUNTY SAVINGS BANK

FINANCIAL STATEMENTS
 (and Report of Independent Accountants)

For the Years Ended June 30, 1998 and 1997

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Report of Independent Accountants                                               

To the Board of Trustees                                                        
Greene County Savings Bank                                                      

In our opinion, the accompanying statement of financial condition and the       
related statements of income and changes in net worth and cash flows present    
fairly, in all material respects, the financial position of Greene County       
Savings Bank at June 30, 1998, and the results of their operations and their    
cash flows for each of the two years in the period ended June 30, 1998, in      
conformity with generally accepted accounting principles. These financial       
statements are the responsibility of the Company's management; our              
responsibility is to express an opinion on these financial statements based on  
our audits. We conducted our audits of these statements in accordance with      
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are 
free of material misstatement. An audit includes examining, on a test basis,    
evidence supporting the amounts and disclosures in the financial statements,    
assessing the accounting principles used and significant estimates made by      
management, and evaluating the overall financial statement presentation. We     
believe that our audits provide a reasonable basis for the opinion expressed    
above.                                                                          

/s/ PricewaterhouseCoopers LLP                                                  

Albany, New York                                                                
August 7, 1998                                                                  

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Greene County Savings Bank                                                      

Statement of Financial Condition                                                
June 30, 1998                                                                   

                                                                [Download Table]


                   ASSETS                                                 

                                                                          
Cash and due from banks                                 $       2,476,032 
Federal funds sold                                              5,796,051 
                                                        ----------------- 
     Total cash and cash equivalents                            8,272,083 

Investment securities, at fair value                           47,778,335 

Loans                                                          81,191,211 
     Less: allowance for possible loan losses                    (728,478)
     Unearned origination fees and costs, net                    (202,771)
                                                        ----------------- 
       Net loans receivable                                    80,259,962 

Premises and equipment                                          2,584,281 
Accrued interest receivable                                     1,091,120 
Prepaid expenses and other assets                                 143,600 
Other real estate                                                 123,548 
                                                        ----------------- 

             Total assets                               $     140,252,929 
                                                        ----------------- 
                                                        ----------------- 

                   LIABILITIES AND NET WORTH                              

Deposits:                                                                 
     Savings certificates, $100,000 and over            $       6,672,000 
     Other savings certificates                                48,930,036 
     Regular and day-to-day                                    32,950,825 
     Money market accounts                                     19,609,467 
     Checking accounts                                          7,514,136 
     NOW accounts                                               6,186,521 
     Christmas Club                                               460,774 
                                                        ----------------- 
                                                              122,323,759 

Accrued interest and other liabilities                            509,314 
Accrued income taxes                                                2,101 
Tax escrow funds                                                1,687,530 
                                                        ----------------- 
             Total liabilities                                124,522,704 

Net worth:                                                                
     Surplus                                                    2,706,456 
     Undivided profits                                         12,781,369 
     Unrealized gain on securities available for sale,                    
       net of applicable deferred income taxes                    242,400 
                                                        ----------------- 

             Total net worth                                   15,730,225 
                                                        ----------------- 

             Total liabilities and net worth            $     140,252,929 
                                                        ----------------- 
                                                        ----------------- 

The accompanying notes are an integral part of the financial statements.        

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Greene County Savings Bank                                                      

Statements of Income                                                            
For the Years Ended June 30, 1998 and 1997                                      

                                                        [Enlarge/Download Table]


                                                              1998                1997    
                                                                                          
Interest income:                                                                          
     Interest on loans                               $      6,367,282    $     6,175,215  
     Interest and dividends on investments:                                               
       US Treasury                                            985,130            962,932  
       US Government agencies                                 856,073            687,256  
       State and political subdivisions                       341,222            362,490  
       Corporation debt securities                            405,225            456,678  
       Mortgage-backed securities                             110,488             69,863  
       Other securities                                        17,724             23,441  
     Federal funds sold                                       393,310            536,826  
     Other interest income                                     26,902             22,615  
                                                     ------------------  -----------------
                                                            9,503,356          9,297,316  
                                                     ------------------  -----------------

Interest expense:                                                                         
     Interest on deposits                                   4,967,487          4,779,678  
                                                     ------------------  -----------------

             Net interest income                            4,535,869          4,517,638  
                                                     ------------------  -----------------

Less: provision for loan losses                               120,000            125,000  
                                                     ------------------  -----------------

Net interest income after provision for loan losses         4,415,869          4,392,638  

Non-interest income:                                                                      
     Service charges on deposit accounts                      251,188            230,442  
     Other operating income                                   185,479            289,968  
                                                     ------------------  -----------------
       Total other income                                     436,667            520,410  
                                                     ------------------  -----------------

Non-interest expenses:                                                                    
     Salaries and employee benefits                         1,571,650          1,491,651  
     Occupancy expense, net                                   208,381            157,190  
     Equipment and furniture expense                          185,476            163,845  
     Other                                                  1,183,752            960,563  
                                                     ------------------  -----------------
       Total other expenses                                 3,149,259          2,773,249  
                                                     ------------------  -----------------

             Income before provision for taxes              1,703,277          2,139,799  

Provision for income taxes                                                                
     Current                                                  565,609            720,287  
     Deferred                                                 (12,248)           (28,625) 
                                                     ------------------  -----------------
       Total provision for income taxes                       553,361            691,662  
                                                     ------------------  -----------------

             Net income                              $      1,149,916    $     1,448,137  
                                                     ------------------  -----------------
                                                     ------------------  -----------------


The accompanying notes are an integral part of the financial statements.        

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Greene County Savings Bank                                                      

Statements of Changes in Net Worth                                              
For the Years Ended June 30, 1998 and 1997                                      

                                                        [Enlarge/Download Table]


                                                                           Unrealized                     
                                                                           Gain (loss)                    
                                                                          on Securities                   
                                                                            Available-                    
                                                                           For-sale, net       Total      
                                              Undivided                     of Deferred         Net       
                                               Profits        Surplus       Income Taxes       Worth      
                                            -------------  -------------  --------------   -------------- 
                                                                                                          
Balances at June 30, 1996                   $ 10,183,316   $  2,706,456   $    (7,200)    $  12,882,572   

Net income for year ended                                                                                 
     June 30, 1997                             1,448,137                                      1,448,137   

Change in unrealized gain on                                                                              
     securities available for sale, net of                                                                
     applicable deferred income taxes                                          75,200            75,200   
                                            -------------  -------------  --------------    --------------

Balance at June 30, 1997                      11,631,453      2,706,456        68,000        14,405,909   
                                            -------------  -------------  --------------    --------------

Net income for year ended                                                                                 
     June 30, 1998                             1,149,916                                      1,149,916   

Change in unrealized gain on                                                                              
     securities available for sale, net of                                                                
     applicable deferred income taxes                                         174,400           174,400   
                                            -------------  -------------  --------------    --------------

Balance at June 30, 1998                    $ 12,781,369    $  2,706,456   $  242,400     $  15,730,225   
                                            -------------  -------------  --------------    --------------
                                            -------------  -------------  --------------    --------------


The accompanying notes are an integral part of the financial statements.        

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Greene County Savings Bank                                                      

Statements of Cash Flows                                                        
For the Years Ended June 30, 1998 and 1997                                      

                                                        [Enlarge/Download Table]


                                                                        1998               1997      

                                                                                                     
Net income                                                      $     1,149,916    $      1,448,137  

Adjustments to reconcile net income to net cash provided                                             
    by operating activities:                                                                         
    Depreciation                                                        147,128             110,400  
    Net accretion of security premiums and discounts                   (161,533)           (167,837) 
    Provision for loan losses                                           120,000             125,000  
    Loss on sale of other real estate                                     2,793              12,009  
    Provision (credit) for deferred income taxes                        (12,248)            (28,625) 
    Net change in unearned loan fees and costs                          (12,848)            (57,951) 
    Net (increase) decrease in accrued interest receivable              (48,580)            257,062  
    Net (increase) decrease in prepaids and other assets                 11,571             443,512  
    Net (decrease) increase in other liabilities                       (235,666)             47,460  
                                                                -----------------  ------------------
          Net cash provided by operating activities                     960,533           2,189,167  
                                                                -----------------  ------------------

Cash flows from investing activities:                                                                
    Proceeds from maturities of available-for-sale securities         7,686,731           7,500,000  
    Purchases of securities available-for-sale                      (12,651,981)        (10,888,898) 
    Principal payments on securities available-for-sale               2,423,055             744,667  
    Principal payments on mortgage-backed securities                                                 
       available-for-sale                                             1,923,198           1,338,993  
    Purchases of mortgage-backed securities available-for-sale       (4,024,423)            -        
    Proceeds from maturities of mortgage-backed securities                                           
       available-for-sale                                               325,809             -        
    Proceeds from sale of other real estate                             179,699              68,378  
    Net increase in loans receivable                                 (4,971,125)         (2,730,620) 
    Purchases of premises and equipment                              (1,060,217)           (409,778) 
                                                                -----------------  ------------------
          Net cash used by investing activities                     (10,169,254)         (4,377,258) 
                                                                -----------------  ------------------

Cash flows from financing activities                                                                 
    Net increase in deposits                                          6,468,829           1,668,328  
    Net increase (decrease) in escrow payments                          123,905             (25,143) 
                                                                -----------------  ------------------
          Net cash provided by financing activities                   6,592,734           1,643,185  
                                                                -----------------  ------------------

Net decrease in cash and cash equivalents                            (2,615,987)           (544,906) 

Cash and cash equivalents at beginning of period                     10,888,070          11,432,976  
                                                                -----------------  ------------------

Cash and cash equivalents at end of period                      $     8,272,083    $     10,888,070  
                                                                -----------------  ------------------
                                                                -----------------  ------------------

Cash paid during the period for:                                                                     
    Interest                                                    $     4,967,903    $      4,779,770  
                                                                -----------------  ------------------

    Income taxes                                                $       833,551    $        738,257  
                                                                -----------------  ------------------

Non-cash investing activity:                                                                         
    Foreclosed loans transferred to other real estate           $       252,007    $         70,457  
                                                                -----------------  ------------------
    Net change in unrealized gain on available-for-sale                                              
       securities                                               $       174,400    $         75,200  
                                                                -----------------  ------------------


The accompanying notes are an integral part of the financial statements.        

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Notes to Financial Statements                                                   

1.  Summary of Significant Accounting Policies                                  

Nature of operations:                                                   

  Greene County Savings Bank (the "Bank" or "Company"), a New York
  State-charted mutual savings bank, has four full service offices
       located in its market area consisting of Greene County, New York. The
       Bank is primarily engaged in the business of attracting deposits from
  the general public in the Bank's market area, and investing such
         deposits, together with other sources of funds, in loans and investment
securities.                                                   

Use of estimates:                                                       

      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
        liabilities and disclosure of contingent assets and liabilities at the
       date of the financial statements and the reported amounts of revenues
       and expenses during the reporting period. Actual results could differ
from those estimates.                                         

Cash and cash equivalents:                                              

         Cash and cash equivalents include cash on hand, amounts due from banks,
      interest-bearing deposits (with original maturity of three months or
     less) and federal funds sold. Generally, federal funds are sold for
         one-day periods. The carrying amounts reported in the balance sheet for
  cash and cash equivalents approximate those assets' fair values.

Investment securities:                                                  

The Company has classified its investments in debt and equity 
     securities as available-for-sale. Available-for-sale securities are
        reported at fair value, with net unrealized gains and losses reflected
       as a separate component of net worth, net of applicable income taxes.
     None of the Company's investment securities have been classified as
trading or held-to-maturity securities.                       

        Realized gains or losses on investment security transactions are based
    on the specific identification method and are reported under other
         income. Fair values of investment securities are based on quoted market
     prices, where available. If quoted market prices are not available,
fair values are based on quoted market prices of comparable   
 instruments. Premiums and discounts are amortized and accreted,
         respectively, using methods that approximate the effective yield method
   over the remaining contractual maturity, adjusted for anticipated
prepayments.                                                  

Loans:                                                                  

      Fair values for variable rate loans that reprice frequently, with no
        significant credit risk, are based on carrying values. Fair values for
         fixed rate loans are estimated using discounted cash flows and interest
         rates currently being offered for loans with similar terms to borrowers
    of similar credit quality. The carrying amount of accrued interest
approximates fair value.                                      

    Interest on loans is accrued and credited to income based upon the
         principal amount outstanding. Unearned discount on installment loans is
     recognized as income over the term of the loan, principally using a
         method that approximates the effective yield method. Nonrefundable loan
        fees and related direct costs are deferred and amortized over the life
         of the loan as an adjustment to loan yield using the effective interest
method.                                                       

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Notes to Financial Statements                                                   

1.  Summary of Significant Accounting Policies                                  

Allowance for possible loan losses:                                     

   The allowance for loan losses is maintained at a level considered
 adequate to provide for potential loan losses. The allowance is
   increased by a provision for loan losses, charged to expense, and
    reduced by net charge-offs. The level of the allowance is based on
      management's evaluation of the collectibility of the loan portfolio,
         including the nature of the portfolio, credit concentrations, trends in
   historical loss experience, specific impaired loans, and economic
         conditions. The Bank considers residential mortgages, home equity loans
       and installment loans to customers small, homogeneous loans which are
evaluated for impairment collectively based on historical loss
   experience. Commercial mortgage and business loans are considered
      impaired if it is probable that the Bank will not be able to collect
         scheduled payments of principal and interest when due, according to the
      contractual terms of the loan agreement. The measurement of impaired
        loans is generally based on the present value of estimated future cash
    flows, except that all collateral dependent loans are measured for
     impairment based on the fair value of the collateral. No loans were
       deemed impaired during the fiscal years ended June 30, 1998 and 1997.

Income recognition on impaired and non-accrual loans:                   

        The Bank places a loan, including impaired loans, on nonaccrual status
         when it is specifically determined to be impaired or when principal and
 interest is delinquent for 90 days or more. Any unpaid interest
        previously accrued on these loans is reversed from income. When a loan
       is specifically determined to be impaired, collection of interest and
principal are generally applied as a reduction to principal   
outstanding. Interest income on all other nonaccrual loans is 
recognized on a cash basis.                                   

Premises and equipment:                                                 

    Premises and equipment is stated at cost. Depreciation is computed
      using principally the straight-line method over the estimated useful
     lives of the related assets. Maintenance and repairs are charged to
expense when incurred. Gains and losses from sales or other   
dispositions of depreciable property are included in current  
operations.                                                   

Other real estate:                                                      

Properties acquired through foreclosure, or by deed in lieu of
       foreclosure, are carried at the lower of cost (fair value at the date
of foreclosure) or fair value less estimated disposal costs.  

Deposits:                                                               

        Fair values disclosed for demand and savings deposits are equal to the
  carrying amounts at the reporting date. The carrying amounts for
         variable rate money market and certificates of deposit approximate fair
       values at the reporting date. Fair values for fixed rate certificates
         of deposit are estimated using discounted cash flows and interest rates
        currently being offered on similar certificates. The carrying value of
accrued interest approximates fair value.                     

Restrictions on retained earnings:                                      

         Retained earnings of the Bank are subject to certain restrictions under
New York State Banking regulations. As required under these   
       regulations, if the net worth of the Bank is less than ten percent of
       the amount due depositors at the close of any accounting period, five
         percent of net earnings, before dividends paid to depositors and losses
         on sale of assets, for such period is credited to appropriated retained
earnings.                                                     

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Greene County Savings Bank                                                      

Notes to Financial Statements, Continued                                        

1.  Summary of Significant Accounting Policies, Continued                       

Restrictions on retained earnings, continued:                           

      Unappropriated retained earnings represent accumulated undistributed
        net earnings of the Bank which have not been allocated to appropriated
      equity and are not restricted as to use under New York State banking
regulations.                                                  

Income taxes:                                                           

     Provisions for income taxes are based on taxes currently payable or
       refundable and deferred income taxes on temporary differences between
       the tax basis of assets and liabilities and their reported amounts in
   the financial statements. Deferred tax assets and liabilities are
      reported in the financial statements at currently enacted income tax
     rates applicable to the period in which the deferred tax assets and
liabilities are expected to be realized or settled.           

2.  Investment Securities                                                       

Securities available-for-sale at June 30, 1998 consist of the following:

                                                        [Enlarge/Download Table]


                                                      Gross         Gross           Estimated   
                                    Amortized      Unrealized     Unrealized          Fair      
                                       Cost           Gains         Losses            Value     
                                  --------------  -------------  ------------    ---------------
                                                                                                
U.S. Treasury                     $   12,969,356  $     221,625  $      1,216    $   13,189,765 
U.S. Government agencies               8,569,188         59,086         7,793         8,620,481 
State and political subdivisions       7,389,943        101,296        11,652         7,479,587 
Mortgage-backed securities             5,196,204          8,442        15,586         5,189,060 
Asset-backed securities                6,304,752         20,227         1,296         6,323,683 
Corporate debt securities              3,735,833         64,429         1,466         3,798,796 
Equity securities and other               81,454                                         81,454 
Foreign obligations                       75,000                                         75,000 
Federal Home Loan Bank stock             700,000                                        700,000 
Mutual funds                           2,352,605                       32,096         2,320,509 
                                  --------------  -------------  ------------    ---------------
                                  $   47,374,335  $     475,105  $     71,105  $     47,778,335 
                                  --------------  -------------  ------------    ---------------
                                  --------------  -------------  ------------    ---------------


    The amortized cost and estimated fair value of debt securities at June
     30, 1998, by contractual maturity, are shown below. Expected maturities
    may differ from contractual maturities, because borrowers may have the
    right to call or prepay obligations with or without call or prepayment
penalties.                                                        

                                                                [Download Table]


                                                             Estimated     
                                          Amortized             Fair       
                                             Cost               Value      
                                       -----------------  -----------------
                                                                           
Amounts maturing in:                                                       
   One year or less                    $      7,787,368   $      7,828,078 
   After one year through five years         20,290,540         20,563,884 
   After five years through ten years         4,586,412          4,696,667 
   Mortgage-backed securities                 5,196,204          5,189,060 
   Asset-backed securities                    6,304,752          6,323,683 
                                       -----------------  -----------------

                                       $     44,165,276   $     44,601,372 
                                       -----------------  -----------------
                                       -----------------  -----------------


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Greene County Savings Bank                                                      

Notes to Financial Statements, Continued                                        

2.  Investment Securities, Continued                                            

The Bank participates in a securities lending program with the
        custodian of substantially all Bank securities. Under the terms of the
  agreement, the custodian acts as an agent for the Bank and loans
    available securities to borrowers. At June 30, 1998, $4,985,000 of
securities were on loan under this program.                   

3.  Loans                                                                       

   Major classifications of loans at June 30, 1998 are summarized as
follows                                                       

                                                                [Download Table]

                                                                         
Real estate mortgages:                                                   
   Residential                                           $    64,705,332 
   Commercial                                                  5,706,421 
Home equity loans                                              4,727,206 
Commercial loans                                               1,336,229 
Installment loans to individuals                               4,171,688 
Passbook loans to individuals                                    544,335 
                                                         ----------------

                                                         $    81,191,211 
                                                         ----------------
                                                         ----------------


        At June 30, 1998, loans to officers and trustees were not significant.

         Changes in the allowance for possible loan losses for the periods ended
June 30 were as follows:                                      

                                                                [Download Table]


                                      1998             1997      
                                                                 
Balance, beginning of year    $       723,019    $      596,924  
Provision charged to expense          120,000           125,000  
Loans charged off                    (126,224)          (11,002) 
Recoveries                             11,683            12,097  
                              -----------------  ----------------

                              $       728,478    $      723,019  
                              -----------------  ----------------
                              -----------------  ----------------


      At June 30, 1998, the Bank's impaired loans for which specific valuation
allowances were recorded were not significant.                    

4.  Premises and Equipment                                                      

     A summary of premises and equipment at June 30, 1998 is as follows:

                                                                [Download Table]

                                                                         
Land                                                            409,702  
Buildings and improvements                                    2,156,500  
Furniture and equipment                                       1,859,570  
                                                         ----------------
                                                              4,425,772  
Less:  accumulated depreciation                              (1,841,491) 
                                                         ----------------
                                                          $   2,584,281  
                                                         ----------------
                                                         ----------------


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Greene County Savings Bank                                                      

Notes to Financial Statements, Continued                                        

5.  Income Taxes                                                                

The provision for income taxes consists of the following:     

                                                                [Download Table]


                                     1998               1997       
                                                                   
Current:                                                           
   Federal income tax          $         471,448   $       573,013 
   State income tax                       94,161           147,274 
                               ------------------  ----------------
     Total current                       565,609           720,287 
Deferred income tax                     (12,248)          (28,625) 
                               ------------------  ----------------
     Total income tax expense  $         553,361   $       691,662 
                               ------------------  ----------------
                               ------------------  ----------------


The Bank's effective tax rate differs from the federal statutory rate   
as follows:                                                             

                                                                [Download Table]


                                                            1998         1997   
                                                                                
Tax based on federal statutory rate                          34%          34%   
State income taxes, net of federal benefit                  3.7          4.5    
Tax exempt income                                          (5.7)        (5.9)   
Other, net                                                   .5          (.3)   
                                                        -----------   ----------
     Total income tax expense                              32.5%        32.3%   
                                                        -----------   ----------
                                                        -----------   ----------


 The components of the deferred tax assets and liabilities at June 30 were
as follows:                                                             

                                                                [Download Table]


                                         1998        1997    
                                                             
Deferred tax assets:                                         
   Allowance for loan losses         $ 184,414    $ 145,257  
   Nonaccruing interest                 34,739       17,583  
   Loan origination fee adjustments                  24,281  
                                     -----------  -----------
     Total deferred tax assets       $ 219,153    $ 187,121  
                                     -----------  -----------
                                     -----------  -----------
Deferred tax liabilities:                                    
   Depreciation                        160,069      133,104  
   Investments                         219,403       97,590  
                                     -----------  -----------

     Total deferred tax liabilities  $ 379,472    $ 230,694  
                                     -----------  -----------
                                     -----------  -----------


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Greene County Savings Bank                                                      

Notes to Financial Statements, Continued                                        

6.  Commitments and Contingent Liabilities                                      

Financial Instruments with off-balance sheet risk and concentrations of 
credit:                                                                 

   The Bank enters into financial agreements in the normal course of
     business that have off-balance sheet risk. These agreements include
        commitments to extend credit and involve, to varying degrees, elements
       of credit risk in excess of the amount recognized on the statement of
financial condition.                                          

         The Bank uses the same credit policies in making commitments as it does
for on-balance sheet instruments.                             

         Contract amounts of financial instruments that represent credit risk at
June 30, 1998 are as follows:                                 

                                                                [Download Table]

                                                                       
Commercial lines of credit                              $      235,000 
Commitments to extend credit                                 2,154,300 
                                                        ---------------

                                                        $    2,389,300 
                                                        ---------------
                                                        ---------------


 Commitments to extend credit and commercial lines of credit are
      agreements to lend to a customer as long as there is no violation of
       any condition established in the contract. Commitments generally have
     fixed expiration dates or other termination clauses and may require
        payment of a fee. Since many of the commitments are expected to expire
     without being fully drawn upon, the total commitment amounts do not
         necessarily represent future cash requirements. The Bank evaluates each
customer's credit worthiness on a case-by-case basis.         

 The amount of collateral, if any, required by the Bank upon the
       extension of credit is based on management's credit evaluation of the
         customer. Commitments to extend credit are primarily secured by a first
      lien on real estate. Collateral on extensions of commercial lines of
         credit varies but may include accounts receivable, inventory, property,
plant and equipment, and income producing commercial property.

7.  Employee Benefit Plans                                                      

         Substantially all Bank employees who have completed one year of service
and attained the age of 21 are covered by a noncontributory,  
multi-employer, defined benefit pension plan. Under the plan, 
       retirement benefits are primarily a function of both years of service
       and level of compensation. The Bank recognized pension expense in the
 amount of $102,000 and $151,000 in 1998 and 1997, respectively.

      The Bank also participated in a multi-employer, defined contribution
       plan covering substantially all employees who have completed one year
       of service. The plan includes Section 401(k) and Thrift provisions as
defined under the Internal Revenue Code. The provisions permit
    employees to contribute up to 15% of their total compensation on a
 pre-tax basis. The Bank matches 50% of the first 6% of employee
        contributions. Company contributions associated with the plan amounted
to $56,000 and $36,000 in 1998 and 1997, respectively.        

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Greene County Savings Bank                                                      

Notes to Financial Statements, Continued                                        

8.  Lines-of-Credit                                                             

         At June 30, 1998, the Bank had available two lines-of-credit from other
    financial institutions for $2,000,000 and $1,000,000. These credit
      lines are collateralized by investment securities and carry interest
       based on the federal funds rate or other published rates. At June 30,
1998, there was no outstanding balances on these credit lines.

9.  Concentrations of Credit Risk                                               

         The Bank grants residential, consumer and commercial loans to customers
       primarily located in Greene County, New York. Although the Bank has a
   diversified loan portfolio, a substantial portion of its debtors'
       ability to honor their contracts is dependent upon the employment and
other economic factors of the County.                         

10. Fair Value of Financial Instruments                                         

         The Company determines fair values based on quoted market values, where
   available, or on estimates using present value or other valuation
techniques. Those techniques are significantly affected by the
       assumptions used, including the discount rate and estimates of future
        cash flows. In that regard, the derived fair value estimates cannot be
        substantiated by comparison to independent markets and, in many cases,
  could not be realized in immediate settlement of the instrument.
        Statement of Financial Accounting Standard No. 107, "Disclosures About
  Fair Value of Financial Instruments," excludes certain financial
  instruments and all nonfinancial instruments from its disclosure
       requirements. Accordingly, the aggregate fair value amounts presented
      do not represent the underlying value of the Company. The methods to
       determine fair value for each financial instrument are listed in Note
1. The carrying amounts and estimated fair values of financial
instruments as of June 30, 1998 are as follows:               

                                                                [Download Table]


                                           June 30, 1998           
                                 ----------------------------------
                                    Carrying            Fair       
(in thousands)                       Amount             Value      
                                 ---------------   --------------- 
                                                                   
Cash and short-term investments  $         8,272   $         8,272 
Investment securities            $        47,374   $        47,778 

Net loans                        $        80,260   $        81,453 

Deposits                         $       122,324   $       122,427 


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Greene County Savings Bank                                                      

Notes to Financial Statements, Continued                                        

11. Regulatory Matters                                                          

The Bank is subject to various regulatory capital requirements
   administered by federal banking agencies. Failure to meet minimum
  capital requirements can initiate certain mandatory and possibly
     additional discretionary actions by regulators that, if undertaken,
         could have a direct material effect on the Bank's financial statements.
    Under capital adequacy guidelines and the regulatory framework for
prompt corrective action, the Bank must meet specific capital 
     guidelines that involve quantitative measures of the Bank's assets,
      liabilities, and certain off-balance-sheet items as calculated under
 regulatory accounting practices. The Bank's capital amounts and
  classifications are also subject to qualitative judgments by the
  regulators about components, risk weightings, and other factors.

   Quantitative measures established by regulation to ensure capital
       adequacy require the Bank to maintain minimum amounts and ratios (set
      forth in the table below) of total and Tier I capital (as defined in
      the regulations) to risk-weighted assets (as defined), and of Tier I
 capital (as defined) to average assets (as defined). Management
         believes, as of June 30, 1998, that the Bank meets all capital adequacy
requirements to which it is subject.                          

                                                        [Enlarge/Download Table]


                                                                                    To be Well Capitalized  
                                                            For Capital                  Under Prompt       
                                  Actual                 Adequacy Purposes            Action Provisions     
                         --------------------------   -------------------------  ---------------------------
                            Amount         Ratio        Amount        Ratio         Amount         Ratio    
                                                                                                            
As of June 30, 1998:                                                                                        
  Total capital                                                                                             
   (to risk weighted     $  16,216,000      21%      $  6,098,000        8%      $  7,622,000        10%    
       assets)                                                                                              

  Tier I Capital                                                                                            
   (to risk weighted     $  15,488,000      20%      $  3,049,000        4%      $  4,574,000        6%     
       assets)                                                                                              

  Tier I capital                                                                                            
    (to average assets)  $  15,488,000      11%      $  5,588,000        4%      $  6,985,000        5%     


12. Subsequent Event                                                            

      On July 1, 1998, the Board of Trustees of the Bank adopted a Plan of
       Conversion to convert from a state-chartered mutual savings bank to a
       state-chartered stock savings bank with the concurrent formation of a
        holding company. The holding company will be organized for the purpose
      of acquiring and holding all of the outstanding capital stock of the
       Bank to be issued in the conversion. The Conversion is expected to be
    accomplished through the adoption of a new state stock charter and
       bylaws for the Bank and the sale of the holding company's stock in an
underwritten public offering.                                 

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Greene County Savings Bank                                                      

Notes to Financial Statements, Continued                                        

12. Subsequent Event, Continued                                                 

      At the time of the Conversion, the Bank will establish a liquidation
        account in an amount equal to its capital as of the date of the latest
         statement of financial condition appearing in the final prospectus. The
    liquidation account will be maintained for the benefit of eligible
     account holders who continue to maintain their accounts at the Bank
        after the Conversion. The liquidation account will be reduced annually
to the extent that eligible account holders have reduced their
       qualifying deposits as of each anniversary date. Subsequent increases
will not restore an eligible account holder's interest in the 
   liquidation account. In the event of a complete liquidation, each
         eligible account holder will be entitled to receive a distribution from
   the liquidation account in an amount proportionate to the current
adjusted qualifying balances for account then held.           

    Subsequent to the Conversion, the Bank may not declare or pay cash
     dividends on or repurchase any of its shares of common stock if the
     effect thereof would cause stockholders' equity to be reduced below
   applicable regulatory capital maintenance requirements or if such
declaration and payment would otherwise violate regulatory    
requirements.                                                 

        The registration statement on Form SB-2 is expected to be filed by the
       proposed holding company of the Bank with the Securities and Exchange
         Commission in the fall of 1998, at which point it will become effective
in accordance with Section 8(a) of the Securities Act of 1933.

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GLOSSARY

ARM                         Adjustable rate mortgage loan                       

Associate                   The term "Associate" of a person is defined to mean 

                  (i) any corporation or organization (other
                than the Bank or its subsidiaries or the
                    Company) of which such person is a director,
            officer, partner or 10% shareholder;

                    (ii) any trust or other estate in which such
                    person has a substantial beneficial interest
            or serves as trustee or in a similar
                  fiduciary capacity; provided, however that
                such term shall not include any employee
                stock benefit plan of the Company or the
         Bank in which such a person has a
               substantial beneficial interest or as a
                   trustee or in a similar fiduciary capacity;
and                     

                    (iii) any relative or spouse of such person,
                  or relative of such spouse, who either has
                the same home as such person or who is a
              director or officer of the Bank or its
   subsidiaries or the Company

ATM                         Automated Teller Machine                            

Bank                        Greene County Savings Bank                          

BHCA                        Bank Holding Company Act of 1956, as amended        

BIF                         Bank Insurance Fund administered by the FDIC        

Charitable Foundation       The Bank of Greene County Charitable Foundation to  
                        be established by Greene County Bancorp, Inc. to
                           which the Bank and the Company will contribute cash
  and shares of Common Stock

CMO                         Collateralized mortgage obligations                 

Code                        The Internal Revenue Code of 1986, as amended       

Community                   Offering Offering for sale to members of the general
                           public of any shares of Common Stock not subscribed
                         for in the Subscription Offering, with preference
                         given first to natural persons residing in Greene
County, New York        

Common Stock                Common Stock, par value of $.10 per share, offered  
                            by the Company in connection with the Reorganization

Company                     Greene County Bancorp, Inc., the parent holding     
                           company for The Bank of Greene County and issuer of
                  the shares of Common Stock in the Offering

Department                  The New York State Banking Department               

DGCL                        Delaware General Corporation Law                    

Eligible Account Holders    Holders of deposit accounts with Greene County      
                           Savings Bank with account balances of at least $100
                    as of the close of business on June 30, 1997

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ERISA                       Employee Retirement Income Security Act of 1974, as 
amended                 

ESOP                        The Employee Stock Ownership Plan and Trust         

Estimated Valuation Range   Estimated pro forma market value of the Common Stock
                        ranging from $15.8 million to $21.4 million. The
                           Estimated Valuation Range may be increased to $24.6
                       million without a resolicitation of subscribers

Exchange Act                Securities Exchange Act of 1934, as amended         

Expiration Date             12:00 noon, New York Time, on December 17, 1998     

FASB                        Financial Accounting Standards Board                

Federal Reserve Board       Board of Governors of the Federal Reserve System    

FDIC                        Federal Deposit Insurance Corporation               

FDICIA                      Federal Deposit Insurance Corporation Improvement   
Act of 1991, as amended 

FHLB                        Federal Home Loan Bank of New York                  

FinPro                      FinPro, Inc., an independent valuation appraisal    
firm                    

FNMA                        Federal National Mortgage Association               

GNMA                        Government National Mortgage Association            

Guidelines                  Interagency Guidelines Prescribing Standards of     
Safety and Soundness    

Independent Valuation       The appraisal of the pro forma market value of the  
                            Company's Common Stock as determined by FinPro, Inc.
as of October 7, 1998   

IRA                         Individual retirement account or arrangement        

IRS                         Internal Revenue Service                            

Minority Stockholders       Stockholders of the Company other than the Mutual   
Company                 

MMDA                        Money Market Demand Account                         

Mutual                      Company Greene County Bancorp, MHC, a New           
                York-chartered mutual corporation, which
                            will own, and which by law must own, at least 51% of
                 the shares of Common Stock of the Company

NASD                        National Association of Securities Dealers, Inc.    

Nasdaq System               National Association of Securities Dealers Automated
Quotation System        

NOW account                 Negotiable Order of Withdrawal Account              

Offering                    The offer and sale of Common Stock to depositors and
              the public pursuant to this Prospectus

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Offering Range              The offer and sale by the Company of between 705,039
                          and 953,877 shares (subject to adjustment to up to
                          1,096,958 shares) of Common Stock pursuant to this
Prospectus              

Order Form                  The stock order form for ordering stock accompanied 
                     by a certification concerning certain matters

Plan of Reorganization      The Greene County Savings Bank Plan of              
                      Reorganization from a Mutual Savings Bank to a
                      Mutual Holding Company and Stock Issuance Plan

Reorganization              The reorganization of the Bank from the mutual to   
                           the stock form of organization, the organization of
                      the Company, the issuance of all of the Bank's
                      common stock to the Company, the issuance of a
                      majority of Company Common Stock to the Mutual
                       Company, and the offer and sale of the Minority
                            Shares to depositors and the public pursuant to this
Prospectus              

REO                         Real estate owned                                   

SEC                         Securities and Exchange Commission                  

Special Meeting             Special Meeting of depositors of the Bank called for
                           the purpose of approving the Plan of Reorganization

Subscription Offering       The Offering of Common Stock pursuant to            
                non-transferable subscription rights, in
                       order of priority, to Eligible Account Holders,
                           the ESOP, and Supplemental Eligible Account Holders

Subscription Price          The $10.00 purchase price per share for the Common  
Stock in the Offering   

Supplemental Eligible       Depositors of the Bank, who are not eligible account
Account Holders             holders, with account balances of at least $100 as  
                      of the close of business on September 30, 1998

Superintendent              The Superintendent of Banks of the State of New York

Voting Record Date          The close of business on October 31, 1998, the date 
                          for determining depositors entitled to vote at the
Special Meeting         

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

      No person has been authorized to give any information or to make any
representation other than as contained in this Prospectus and, if given or made,
such information or representation must not be relied upon as having been       
authorized by the Company or the Bank. This Prospectus does not constitute an   
offer to sell or the solicitation of an offer to buy any security other than the
shares of Common Stock offered hereby to any person in any jurisdiction in which
such offer or solicitation is not authorized, or in which the person making such
offer or solicitation is not qualified to do so, or to any person to whom it is 
unlawful to make such offer or solicitation. Neither the delivery of this       
Prospectus nor any sale hereunder shall, under any circumstances, create any    
implication that information herein is correct as of any time subsequent to the 
date hereof.                                                                    

 Greene County Bancorp, Inc.
 (Proposed Holding Company for
 Greene County Savings Bank)

Up to 1,096,958 Shares

Common Stock
($.10 par value per share)

----------
PROSPECTUS
----------

FRIEDMAN, BILLINGS, RAMSEY & CO., INC.

 November 12, 1998

 THESE SECURITIES ARE NOT DEPOSITS OR ACCOUNTS

AND ARE NOT FEDERALLY INSURED OR GUARANTEED.

Until December 15, 1998 or 25 days after the commencement of the Offering, all
dealers effecting transactions in the registered securities, whether or not     
participating in this distribution, may be required to deliver a Prospectus.    
This is in addition to the obligation of dealers to deliver a Prospectus when   
acting as underwriters and with respect to their unsold allotments or           
subscriptions.                                                                  

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

Dates Referenced Herein   and   Documents Incorporated by Reference

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