American Federal announces record third quarter earnings.

GREENVILLE, S.C.--(BUSINESS WIRE)--Oct. 19, 1995--American Federal Bank, FSB (Nasdaq:AMFB) today announced record third quarter net income of $4.1 million, a 6.0% increase over the third quarter of 1994.

This marks the seventh consecutive quarter of record earnings. Earnings per share were $.36 compared with $.34 a year ago.

For the nine months, net income was $12.2 million or $1.07 per share, compared with $11.6 million or $1.02 per share in 1994.

During the quarter, the Bank completed the acquisition of four additional branches in the Midlands Region, increasing deposits $61.5 million. Roy Abercrombie, Chairman and Chief Executive Officer, said, "We are already seeing growth in our Midlands market. We believe there is strong potential there for the products and services American Federal offers."

The Bank used $25 million of the new deposits to eliminate its high rate long-term debt, resulting in a $1.7 million prepayment charge, net of taxes. The impact of this charge was substantially reduced by an unrelated income tax benefit occurring in the quarter.

Net interest income for the third quarter increased $117,000 over the prior year quarter, although the net interest margin declined 22 basis points to 3.86%.

Fee and commission income gained 22.5% during the quarter, while general and administrative expenses rose 9.3%. The increased expense resulted from acquisition costs for loans and deposits, as well as increased operating costs with the expanded branch network.

In the nine-month period, total loans increased 9.8% primarily from growth in consumer loans, and total deposits increased 16.2%. The Bank now has 109,000 personal checking accounts, which contribute to a lower cost of funds and higher fee income.

Quality of assets continued to be high, with nonperforming assets of $6.8 million or .52% of total assets at September 30. The allowance for loan losses was $10.0 million or 1.25% of total loans and 148% of nonperforming assets.

The Bank also announced a quarterly dividend of $.07 per share. The dividend is payable November 10, to shareholders of record on October 28, 1995.

American Federal has $1.3 billion is assets and 41 branch offices covering twelve counties in the northwestern region of South Carolina. The Bank also owns Finance South, a consumer finance company with 16 branch offices. -0-

                        AMERICAN FEDERAL BANK
                        Financial Highlights

                                 At or for the three months ended
                                           September 30
                                         1995        1994
KEY PERFORMANCE MEASURES:
Return of average assets                 1.25%      1.27%
Return on average equity                15.88%     17.14%
Efficiency ratio                        58.49%     56.76%

PER SHARE DATA:
Book value                              $9.44      $8.22
Annual dividend                           .28        .22

                       CONSOLIDATED FINANCIAL DATA
                               (Unaudited)
OPERATIONS DATA:
                               Three Months Ended  Nine Months Ended
                                  September 30,      September 30,
                                  1995     1994      1995     1994
                               (In thousands, except per share data)
Net interest income             $11,999   11,882    36,001   34,556
Provision for loan losses           277      463     1,497      792
Other income                      3,169    1,458     9,607    6,121
General and administrative
 expenses                         9,027    8,259    25,996   23,250
Net income before income taxes    5,864    4,618    18,115   16,635
Income taxes                         80      720     4,247    5,046
Net income before extraordinary
 item                             5,784    3,898    13,868   11,589
Extraordinary item-loss on
 extinguishment of debt
 (net of tax benefit of
 $852,000)                       (1,653)      --    (1,653)      --

  Net income                    $ 4,131    3,898    12,215   11,589
Earnings per share:
 Before extraordinary item          .50      .34      1.21     1.02
 Extraordinary item                (.14)      --      (.14)      --

  Net income                        .36      .34      1.07     1.02

Weighted average shares:         11,481   11,333    11,425   11,307

SUMMARY OF FINANCIAL CONDITION:
                                  September 30,       December 31,
                                      1995               1994
                                           (In thousands)
Total assets                       $1,311,744         $1,254,418
Loans                              $  787,010         $  717,232
Mortgage-backed securities         $  425,645         $  453,452
Deposits                           $  970,902         $  835,364
Stockholders' equity               $  105,598         $   93,358

CONTACT: American Federal Bank, Greenville

Mary Margaret Dragoun, 803/255-7253