American Federal announces third straight year of record earnings.

GREENVILLE, S.C.--(BUSINESS WIRE)--Jan. 19, 1995--American Federal Bank, FSB (Nasdaq: AMFB) today reported net income of $15.5 million or $1.37 per share, for the year ended December 31, 1994.

This represents a 25% increase from 1993 operating earnings of $12.5 million.

Net income for the fourth quarter was $3.9 million, compared with $3.2 million in the same quarter a year ago. Earnings per share for the recent quarter were $.35 compared with $.29 in the fourth quarter of 1993.

Roy Abercrombie, Chairman and Chief Executive Officer, said, "Loan growth continued strong in the fourth quarter, resulting in a 10% increase for the year . Economic conditions favored expansion in the Upstate and gave American Federal a third straight year of record operating earnings."

Although six increases in short-term interest rates added pressure to the Bank's net interest margin over the last twelve months, the margin remained steady at 4.08% during the last three quarters.

Fee and commission income also grew 16.8% during the year, while general and administrative expenses increased 1.8%.

Nonperforming assets were reduced from $8.2 million in 1993 to $6.3 million or .50% of total assets in 1994. The allowance for possible loan losses was $9.1 million or 1.25% of total loans.

Abercrombie continued, "The economic outlook for 1995 is more uncertain, but American Federal's high quality of assets places the Bank in firm position for another growth year."

American Federal also announced a quarterly dividend of $.07 per share. The dividend is payable February 10, 1995 to shareholders of record on January 28, 1995.

On January 5, the Bank announced the acquisition of two branch offices in Batesburg and Saluda, South Carolina. "We are enthused about moving into the Midlands Region," Abercrombie said. "These offices have performed well in their markets and will make a substantial contribution to our operations over the long term." The transaction is subject to regulatory approval and is scheduled to be completed by the end of the first quarter, 1995.

American Federal has $1.3 billion in assets and 35 branch offices covering eight counties in the northwestern region of South Carolina. The Bank also owns Finance South, a consumer finance company with 16 branch offices.

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                         American Federal Bank
                         Financial Highlights

                                    At or for the year ended
                                          December 31,
                                       1994        1993
KEY PERFORMANCE MEASURES:
Return on average assets               1.30%       1.22%(a)
Return on average equity              17.61%      17.70%(a)
Efficiency ratio                      54.80%      57.46%

PER SHARE DATA:
Book value                            $8.41       $7.42

    (a)  Before cumulative effect of changes in accounting principles.

                    Consolidated Financial Data

OPERATIONS DATA (Unaudited):
                                 Three Months Ended   Years Ended
                                     December 31,     December 31,
                                    1994     1993     1994     1993
                                 (In thousands, except per share data)
Net interest income               $12,093  $11,175  $46,649  $44,994
Provision for loan losses             640      196    1,432    1,233
Other income                        2,833    2,126    8,954    7,601
General and administrative expenses 8,318    7,769   31,568   31,002
Net income before income taxes      5,968    5,336   22,603   20,360
Income taxes                        2,026    2,059    7,072    7,907
Net income before cumulative changes
 in accounting principles           3,942    3,277   15,531   12,453
Cumulative effect of adopting
 FASB 72                                -        -        -  (36,178)
Cumulative effect of adopting
 FASB 109                               -        -        -    1,000
Net income                        $ 3,942    3,277   15,531  (22,725)

Earnings per share:
 Primary:
  Before cumulative effect of changes
   in accounting principles       $   .35      .29     1.37     1.25
  Cumulative effect of changes in
   accounting principles                -        -        -    (3.53)
                                  -------   ------    -----    ------
                                  $   .35      .29     1.37    (2.28)
Fully diluted:
 Before cumulative effect of changes
  in accounting principles        $   .35      .29     1.37     1.19
 Cumulative effect of changes in
  accounting principles                 -        -        -    (3.36)
                                  -------   ------   ------    ------
                                  $   .35      .29     1.37    (2.17)
Weighted average shares:
 Primary                           11,312   11,276   11,308    9,967
 Fully diluted                     11,312   11,276   11,308   10,485

SUMMARY OF FINANCIAL CONDITION:
                                    December 31,    December 31,
                                       1994            1993
                                          (In thousands)
Total assets                        $1,254,418      $1,112,009
Loans held for investment           $  717,232      $  652,633
Mortgage-backed securities          $  453,452      $  368,612
Deposits                            $  835,364      $  826,820
Stockholders' equity                $   93,358      $   81,735

CONTACT: American Federal Bank, Greenville

Mary Margaret Dragoun, 803/255-7253