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ROCHESTER COMMUNITY REPORTS THIRD QUARTER RESULTS

 Loss of $72.7 Million Due to Incremental Provision For Commercial
 Real Estate Assets; Nonperforming Assets Decline by 44 Percent
 ROCHESTER, N.Y., Sept. 29 /PRNewswire/ -- Rochester Community Savings Bank (NASDAQ: RCSB), today reported a net loss of $72.7 million or $5.37 per share for the third quarter ended Aug. 31, 1993, compared to net income of $2.9 million or $.21 per share in the 1992 third quarter. RCSB's net loss for the first nine months of fiscal 1993 was $67.6 million or $5.00 per share, compared to net income of $7.5 million or $.54 per share for the same period in fiscal 1992.
 Results for the recent quarter reflect the implementation of RCSB's previously announced plan to realize the company's underlying earning potential by accelerating the disposition of a substantial portion of its problem commercial real estate assets. As part of this plan, the company had indicated that it would record incremental provisions for these assets in the 1993 third quarter, which would result in a substantial net loss for the quarter and for the fiscal year ending Nov. 30. RCSB expects to return to profitability in the 1993 fourth quarter and to remain well above all regulatory capital requirements. In the 1993 third quarter, the company also completed an offering of convertible preferred stock which netted proceeds of $71.4 million to RCSB.
 At its meeting today, the board of directors elected Chairman and Chief Executive Officer Leonard S. Simon as President of The Rochester Community Savings Bank. Simon will now serve as Chairman, President and Chief Executive Officer of the company.
 In commenting on the company's recent actions and financial results, Simon stated, "This quarter's expected loss, while substantial, is also a major component of our program to significantly strengthen RCSB's financial position and future earnings. Since the start of the quarter, nonperforming assets have been reduced by $121 million with additional reductions expected over the next two quarters. At the same time, our recent successful preferred stock offering ensures that RCSB's capital position will remain exceptionally strong as we liquidate major problem commercial real estate assets and focus on developing our highly profitable consumer business."
 In further discussing the Bank's progress in reducing nonperforming assets, Simon noted that RCSB's level of nonperforming assets has decreased from 6.95 percent of total assets at the 1993 second quarter-end to 4.06 percent of total assets, the lowest level since the 1990 third quarter. At Aug. 31, 1993, nonperforming assets were $155.2 million, down 43.8 percent from $276.1 million at the end of the 1993 second quarter. The large decline in nonperforming assets was achieved primarily through the sale of $56.7 million in other real estate (ORE) and a reduction in the carrying value of ORE targeted for accelerated disposition.
 The Bank's provision for loan losses increased to $9.3 million in the 1993 third quarter from $4.3 million in the year-ago quarter due to the impact of incremental provisions for loans targeted for accelerated disposition. The bulk of the incremental provisions taken in the recent quarter was recorded in the real estate and other category of noninterest income due to the concentration of ORE and real estate investments in the assets targeted for accelerated disposition. At Aug. 31, 1993, RCSB's allowance for possible loan losses was $42.0 million, compared to $38.8 million at the 1993 second quarter-end and $37.9 million at the 1992 third quarter-end. The coverage ratio of loan loss reserves to nonperforming loans increased to 56.9 percent from 34.6 percent at 1992 year-end and compares to an average coverage ratio for nonperforming loans of 52.7 percent for all publicly traded thrifts (Source: SNL Thrift Datasource, Sept. 15, 1993). Delinquencies in the Bank's major consumer loan portfolios--residential mortgage, automobile and home equity--remained below industry averages.
 In assessing the outlook for RCSB, Simon stated, "With the significant improvements in asset quality already made, RCSB is emerging as a company with a solid book value, a stronger balance sheet, and the ability to deliver a sustained increase in earnings."
 Net interest income increased by 22.0 percent to $27.6 million in the 1993 third quarter, compared to $22.6 million in the 1992 third quarter. For the first nine months of 1993, net interest income was $81.9 million, 21.2 percent higher than net interest income of $67.6 million for the same period in fiscal 1992. The Bank's net interest margin increased to 3.31 percent in the first nine months of 1993 from 2.69 percent in the same 1992 period. RCSB's interest rate spread for the first nine months of 1993 was 3.37 percent, up from 2.89 percent in the year-ago period. Substantial improvements in net interest income, margin and spread reflect continued strength in RCSB's traditional banking activities, the favorable interest rate environment and the impact of retaining automobile loans in the Bank's loan portfolio.
 Losses in noninterest income for the 1993 third quarter and the nine- month period primarily reflect the portion of the incremental provision taken in the real estate and other category. For the recent quarter, the loss in noninterest income was $58.8 million, compared to noninterest income of $23.1 million in the 1992 third quarter. On a year-to-date basis, losses in noninterest income were $28.1 million in 1993, compared to noninterest income of $62.4 million in the same period in 1992.
 The $80.9 million loss in real estate and other in the 1993 third quarter was largely attributable to the incremental provision for ORE and real estate holdings that are targeted for the accelerated disposition program.
 Mortgage banking income increased to $18.0 million in the 1993 third quarter, 33.7 percent higher than the prior year's quarter. The positive effect of record loan originations on the quarter's mortgage banking income was offset partially by writedowns of purchased mortgage servicing rights attributable to accelerated prepayments from refinancings. Noninterest income from retail banking rose 17.3 percent, primarily due to strong business growth at the Bank's insurance and stock brokerage subsidiaries, Community Guardian Insurance Agency and Community Securities, Inc., which operate in the western New York and central New Jersey markets. A $2.2 million loss in automobile loan banking is largely attributable to lower volumes of loans serviced for others and reductions in the estimated value of retained excess servicing of automobile loans sold in prior years. Lower levels of securities sale gains in the recent quarter reflect higher volumes of mortgage-backed securities sold in 1992 to realize asset values vulnerable to accelerated mortgage prepayments.
 Operating expenses for the third quarter of 1993 were $40.3 million, compared to expenses of $38.4 million in the year-ago quarter. Year-to- date, operating expenses were $111.3 million, compared to $105.0 million in 1992. Higher expenses in 1993 were largely due to the additional costs associated with record levels of mortgage originations and certain one-time expenses.
 A tax benefit of $8.0 million recorded in the 1993 third quarter includes the anticipated carryback of RCSB's operating loss to prior years for income tax purposes. RCSB also expects to end the current year with operating loss carryforwards to be utilized in future periods.
 Total assets at Aug. 31, 1993 were $3.82 billion, compared to $3.83 billion at the end of fiscal 1992. Deposits at Aug. 31, 1993 were $2.75 billion, compared to deposits of $2.76 billion at the end of fiscal 1992. The Bank's one-year gap, a measure of the sensitivity of interest earnings to rate movements, remained low at 0.6 percent. Reflecting both strong refinancing and purchase activity, total residential mortgage originations at American Home Funding, RCSB's mortgage banking subsidiary, were $805.8 million for the quarter and $1.93 billion year-to-date.
 Shareholders' equity at Aug. 31, 1993 was $304.8 million or $16.48 per share on a fully diluted basis, compared to $301.4 million or $21.82 per share at 1992 year-end. Under generally accepted accounting principles, RCSB's ratio of equity to assets was 7.98 percent at Aug. 31, 1993 and is the second highest of the nation's 25 largest publicly held thrifts (Source: SNL Thrift Datasource, Sept. 15, 1993). RCSB also exceeds all regulatory capital requirements.
 Rochester Community Savings Bank is a publicly owned, state- chartered savings bank headquartered in Rochester, N.Y. The Bank operates 28 retail banking offices in western New York, and through its wholly owned subsidiary, Shadow Lawn Savings Bank, 16 retail banking offices in central New Jersey. RCSB also owns subsidiaries engaged in mortgage banking, automobile financing, insurance, and securities brokerage.
 Financial Highlights Follow.
 THE ROCHESTER COMMUNITY SAVINGS BANK AND SUBSIDIARIES
 FINANCIAL HIGHLIGHTS
 (dollars in thousands, except per share amounts)
 Three Months Ended
 August 31,
 1993 1992
 Income Statement Data:
 Interest income $ 62,205 $ 68,243
 Interest expense 34,607 45,628
 Net interest income 27,598 22,615
 Provision for loan losses 9,258 4,256
 Net interest income after
 provision for loan losses 18,340 18,359
 Noninterest income (loss):
 Mortgage banking 18,029 13,486
 Retail banking 5,088 4,336
 Automobile loan banking (2,195) 388
 Net securities sale gains 1,248 3,891
 Real estate and other (80,926) 957
 Total noninterest income (loss) (58,756) 23,058
 Operating expenses 40,270 38,427
 Income (loss) before taxes (80,686) 2,990
 Income tax provision (benefit) (7,965) 129
 Net income (loss) $(72,721) $ 2,861
 Net income (loss) per share $ (5.37) $ 0.21
 Performance Ratios (For the period):
 Net interest margin 3.26 pct 2.75 pct
 Interest rate spread 3.24 2.93
 Return on average assets (7.69) 0.30
 Return on average equity (92.62) 3.87
 Nine Months Ended
 August 31,
 1993 1992
 Income Statement Data:
 Interest income $188,750 $214,324
 Interest expense 106,832 146,762
 Net interest income 81,918 67,562
 Provision for loan losses 14,238 11,015
 Net interest income after
 provision for loan losses 67,680 56,547
 Noninterest income (loss):
 Mortgage banking 47,529 40,117
 Retail banking 14,477 12,602
 Automobile loan banking (2,221) 9,379
 Net securities sale gains 2,476 15,906
 Real estate and other (90,404) (15,626)
 Total noninterest income (loss) (28,143) 62,378
 Operating expenses 111,275 104,999
 Income (loss) before taxes (71,738) 13,926
 Income tax provision (benefit) (4,161) 6,406
 Net income (loss) $(67,577) $ 7,520
 Net income (loss) per share $ (5.00) $ 0.54
 Performance Ratios (For the period):
 Net interest margin 3.31 pct 2.69 pct
 Interest rate spread 3.37 2.89
 Return on average assets (2.40) 0.26
 Return on average equity (29.29) 3.42
 August 31, November 30, August 31,
 1993 1992 1992
 Balance Sheet Data:
 Assets $3,820,512 $3,829,312 $3,877,844
 Securities held for sale 120,416 169,615 -
 Mortgage-backed and
 other securities 750,554 571,932 809,628
 Loans receivable, net 2,477,505 2,438,070 2,409,829
 Deposits 2,746,359 2,759,745 2,798,078
 Borrowings 500,785 565,453 556,630
 Shareholders' equity 304,774 301,401 297,569
 Book value per common share 16.48 21.82 21.54
 Common shares outstanding (000s) 13,824 13,816 13,816
 Preferred shares outstanding (000s) 2,990 - -
 Equity as a percent of assets (pct) 7.98 7.87 7.67
 -0- 9/29/93
 /CONTACT: Richard Dye of Rochester Community Savings Bank, 716-423-7363/
 (RCSB)


CO: Rochester Community Savings Bank ST: New York IN: FIN SU: ERN

BM -- CL005 -- 6805 09/29/93 12:05 EDT
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Date:Sep 29, 1993
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