Bank Releases Results of Study and Reports Financial Results.

ST. CLAIRSVILLE, Ohio--(BUSINESS WIRE)--May 19, 1999--

Belmont Bancorp., parent company of Belmont National Bank, announced it is continuing its efforts to help consumers resolve disputes with manufactured home retailer Schwartz Homes Inc., New Philadelphia, Ohio.

Schwartz Homes unexpectedly closed its doors on April 27, 1999, leaving hundreds of its customers in the middle of their construction process. In addition to assisting with finalizing home purchases and deliveries, Belmont continues attempts to contact and interview all affected bank customers. Because of other secured creditors and the nature of the collateral, the priority interest in this collateral remains in question. Currently the bank and other secured parties are working with a receiver to resolve any disputes.

According to J. Vincent Ciroli Jr., president and CEO of Belmont Bancorp. and Belmont National Bank, when current management discovered potential problems with the Schwartz credits, Belmont reported the situation to the bank's primary regulator, the Office of the Comptroller of the Currency. Bank management has conducted a review of both the Schwartz commercial and consumer credits and has determined to restate fiscal 1998 earnings to reflect the impact of Schwartz-related credits that were booked in prior periods. Belmont last week reported a restated net loss for fiscal 1998 of $1.9 million or 37 cents loss per share. Additionally, Belmont is reporting a net loss for the first quarter of 1999 of $2.6 million or 50 cents loss per share. Belmont established an additional $8.0 million post tax provision for loan losses during the fourth quarter of 1998 and a $3.8 million post tax provision for loan losses during the first quarter of 1999 to reflect the impact of Schwartz Homes related credits. Ciroli stated that a claim has been filed with the Company's fidelity bond carrier seeking partial restitution.

This loss for the first quarter of 1999 compares to net income of $1,578,000, or 30 cents per share, for the comparative period last year. The loss before tax credit and securities gains totaled $4,225,000 for the three month period ended March 31, 1999, vs. earnings before taxes of $1,849,000 for the comparative period last year. Annualized returns on average common equity were (46.79 percent) and 18.97 percent for the three months ended March 31, 1999 and 1998, respectively.

According to Ciroli, the board of directors has suspended the payment of dividends until a clear indication of a positive earnings stream and a certain capital level has been achieved. Additionally, the board agreed to take any future director fees in the form of stock rather than cash. W. Quay Mull, chairman of the bank and the holding company, stated, "As a vote of confidence in the viability and strength of our organization, we felt this was necessary."

Nonperforming assets as a percentage of total assets were 2.63 percent at March 31, 1999, compared to 0.21 percent at March 31, 1998. The ratio of nonperforming assets as a percentage of the allowance for loan losses was 166.76 percent at March 31, 1999, compared to 20.19 percent at March 31, 1998.

Total assets increased from $393.8 million at March 31, 1998 to $424.1 million at March 31, 1999, an increase of 7.68 percent. Total deposits increased 4.03 percent from $283.5 million at March 31, 1998 to $295.0 million at March 31, 1999.

At March 31, 1999, the Tier 1 capital ratio was 8.23 percent, compared to 9.08 percent at Dec. 31, 1998, as restated. The total Tier 1 and Tier 2 capital ratios were 9.48 percent at March 31, 1999, and 10.33 percent at Dec. 31, 1998, as restated. The capital leverage ratio was 5.46 percent at March 31, 1999, compared to 5.94 percent at Dec. 31, 1998, as restated.

Because of the Schwartz Homes situation, Belmont Bancorp. restated its 1998 results, reporting a net loss for 1998 of $1,919,000. Earnings for 1997 totaled $5,945,000. On a per share basis, 1998 and 1997 (loss)/earnings were (37 cents) on a restated basis and $1.13 respectively. Return on average common equity for the year was (5.76 percent), and return on average assets was (0.46 percent).

Net interest income for 1998 was $14.31 million, down 0.26 percent from last year. The net interest margin was 3.87 percent in 1998 compared to 4.37 percent in 1997.

Non-interest income for the year totaled $3.966 million vs. $2.809 million for 1997. Included in non-interest income was a gain on sale of the real estate totaling $383,000 for the sale of the Jewett, Ohio branch office. Gain on sale of securities equaled $1.338 million, compared to $799,000 for 1997. Non-interest expenses increased $764,000 to $9.496 million.

Nonperforming assets for the year increased to 1.96 percent of total assets from 0.41 percent in 1997. Nonperforming assets as a percentage of allowance for loan losses was 156.61 percent compared to 38.20 percent in 1997. The allowance for possible loan loss as a percentage of total loans equaled 2.63 percent, vs. 1.84 percent in 1997.

Certain statements in this release contain forward looking information. These statements are subject to certain risks and uncertainties. These risks and uncertainties could cause actual results to differ materially from the current statements.

Belmont National Bank has offices in Bellaire, Bridgeport, Cadiz, Lansing, New Philadelphia, the Ohio Valley Mall, St. Clairsville, Schoenbrunn and Shadyside, Ohio, and in the Woodsdale and Elm Grove areas of Wheeling, W.Va. Belmont Bancorp. stock trades in the Small Cap Market of NASDAQ under the symbol BLMT.