DeGeorge Financial Makes Announcement.

CHESHIRE, Conn.--(BUSINESS WIRE)--Nov. 18, 1997--DeGeorge Financial Corp. (NASDAQ NMS:DEGE) reported a net loss of $4.5 million, or $0.42 per share, for the quarter ended Sept. 30, 1997, as compared to net income of $2.0 million, or $0.19 per share, for the third quarter of 1996.

For the three months ended Sept. 30, 1997, the company reported total income of $8.9 million as compared to $13.3 million in the similar period in 1996, a decrease of $4.4 million.

For the nine months ended Sept. 30, 1997, net loss was $9.5 million, or $0.87 per share, as compared to net income of $200,000, or $0.02 per share, for the similar period in 1996. The prior year results include income from discontinued operations of $500,000, or $0.05 per share. The results of operations for the nine months ended Sept. 30, 1997, reflect $3.2 million of non-recurring charges relating to distribution center closing costs and customer accommodations associated with the company's change to local purchase of building materials in the customers' area. Year-to-date loss from discontinued operations of $200,000 is also included in other expense in 1997.

Loan applications received during the third quarter of 1997 increased by 51.0% over the similar period in 1996 (785 in 1997 versus 520 in 1996). Loan closings recorded during the quarter from the company's core business were 197 in 1997 compared to 424 in the similar period in 1996. The decrease in loan closings is directly attributable to reduced order activity in the first and second quarters of 1997 that occurred as a result of the departure of a large number of the company's most productive sales representatives during the period from July 1996 to March 1997. Many of these sales representatives were recruited to join a competing business setup by former employees of the company, resulting in significant disruption to the company's field sales activity. The company is vigorously pursuing litigation to recover damages resulting from the alleged misappropriation of proprietary information, trade secrets and sales leads of the company.

Throughout 1997, the company steadily rebuilt its field sales force. At Sept. 30, 1997, the number of field sales representatives increased to 190, of which only 51, or 26.8%, were included in the total of 130 at Sept. 30, 1996. The balance of the present field sales force is comprised of individuals with less than one year of experience with the company. Through seasoning and training of new sales representatives, the flow of loan applications has shown sustained growth throughout the third quarter, resulting in an increase in the inventory of active loan applications to 664 at Sept. 30, 1997 as compared to 512 at Sept. 30, 1996, an increase of 29.7%.

"We are encouraged by the sustained recovery in the number of loan applications in the third quarter," said Salvatore A. Bucci, senior vice president and chief financial officer. "Our investment in recruiting and training of new sales representatives is now generating increased production which we believe will return the company to profitability in 1998. We are developing a sound foundation for future growth and expansion while continuing to manage expenses at every level."

DeGeorge Financial Corp. arranges financing and is currently managing over $160 million in underwritten construction loans. It provides access to home ownership for people who lack a sufficient down payment or sufficient income to support the purchase of the home they desire through conventional mortgage programs. Through its packaging of financing and customer support, the company enables its customers to reduce the cost of home construction by eliminating the general contractor, the intent of which is to create an equity position that serves as the down payment for permanent financing upon the conclusion of the home construction process.

CONTACT: DeGeorge Financial Corp.

Salvatore A. Bucci, 203/699-3407

Senior Vice President and Chief Financial Officer