Advanced Financial Inc. reports profitable quarter ended Sept. 30, 1996.

SHAWNEE, Kan.--(BUSINESS WIRE)--Nov. 11, 1996--Advanced Financial Inc. (ASE:AVF), a full service residential mortgage banking company, reported operating results for the three and six months ended Sept. 30, 1996.

For the three months ended Sept. 30, 1996, the company reported pre-tax earnings of $367,966 compared to a pre-tax loss of ($687,576) for the same period a year ago. The after-tax earnings were $27,966 or less than $0.01 per share compared to a loss of ($736,926) or ($0.21) per share for the same three-month period a year ago.

For the six months ended Sept. 30, 1996, the company reported a pre-tax loss of ($194,165) compared to ($1,374,930). The after-tax loss was ($534,165) or ($0.15) per share compared to a loss of ($1,424,280) or ($0.40) per share for the same six-month period a year ago.

The company believes that a key measure of financial performance is reflected by after-tax cash flow per share due to the impact of significant non-cash charges for amortization of the company's portfolio of purchased mortgage servicing rights. For the three- and six-month period ended Sept. 30, 1996, after-tax cash flows were $0.08 and $0.05 per share respectively versus a negative ($0.08) and ($0.14) for the same periods a year ago.

Bill Moffatt, president and CEO, stated: "The quarter and six months ending September 1996 showed significant improvement over the same period a year ago. The company's loan production continues to grow. We closed approximately $78 million in loan production during the six months ended Sept. 30, 1996 compared to $51 million for the same six-month period a year ago. This is an increase of 53%.

Moffatt continued: "As we announced earlier, we are in the process of acquiring the assets and operations of another mortgage company which will add approximately $15 million to $20 million a month in additional loan production. This acquisition is part of our strategic plan and a key first step in achieving continued profitability. Even though we booked an $814,000 gain on the sale of approximately $234 million in mortgage servicing rights, we were also able to reduce our operating expenses for the period. Previously we had anticipated the sale of the entire portfolio, but were able to accomplish our goals by selling only a portion. The company still has a servicing portfolio of approximately $180 million.

Moffatt added: "The strategic decision to sell servicing has allowed us to pay off existing debt and simultaneously eliminate our monthly amortization and interest expense associated with such servicing rights. Management and I continue our commitment to restoring profitability on an ongoing basis and increasing shareholders' value, and I believe this period's results prove that we are taking the steps necessary to achieve these goals."

Advanced Financial Inc. (AFI) is an American Stock Exchange listed holding company with its principal operations conducted through the wholly owned AFI Mortgage Corp. subsidiary, is a full service residential mortgage banking company originating and servicing single-family first- and second-mortgage loans. -0-

                     ADVANCED FINANCIAL INC.
                        Financial Summary
                Three months ended Sept. 30, 1996

                             Sept. 30, 1996      Sept. 30, 1995
                               (unaudited)         (unaudited)
                             --------------      --------------

Revenues                          2,600,658           1,868,837
Servicing Expenses                  383,782             300,077
Personnel                           818,347           1,096,834
G & A (including other)             389,772             509,424
Depreciation & Amortization         294,416             202,123
Interest Expense                    346,375             447,955
Income/(Loss) before income taxes   367,966           (687,576)
Income tax expense                  340,000              49,350
Net Income/(Loss)                    27,966           (736,926)
Weighted Average Shares           4,437,973           3,777,533
Earnings per share                     0.00              (0.21)


                        Financial Summary
                  Six months ended Sept. 30, 1996

                             Sept. 30, 1996      Sept. 30, 1995
                               (unaudited)         (unaudited)
                             --------------      --------------

Revenues                          4,249,661           3,469,032
Servicing Expenses                  523,363             613,907
Personnel                         1,838,330           1,964,415
G & A (including other)             845,605           1,011,834
Depreciation & Amortization         719,923             898,382
Interest Expense                    516,605             355,424
Loss before income taxes          (194,165)         (1,374,930)
Income tax expense                  340,000              49,350
Net Loss                          (534,165)         (1,424,280)
Weighted Average Shares           3,988,797           3,776,868
Earnings per share                   (0.15)              (0.40)


                             Sept. 30, 1996      March 31, 1996
                               (unaudited)          (audited)
                             --------------      --------------

Total Assets                     16,107,782          17,313,516
Total Liabilities                14,857,063          16,335,187
Total Stockholders Equity         1,250,719             978,329

CONTACT: Advanced Financial Inc.

Brad Morris, Secretary/Treasurer, 913/441-2466