Degeorge Financial Corporation Announces Third Quarter Results.

CHESHIRE, Conn.--(BUSINESS WIRE)--Nov. 17, 1998--DeGeorge Financial Corporation (DEGE) reported a net loss of $7.4 million, or $0.69 per share for the quarter ended September 30, 1998, as compared to a net loss of $4.5 million, or $0.41 per share, for the third quarter of 1997. Net loss for the nine months ended September 30, 1998 was $20.0 million, or $1.85 per share, as compared to a net loss of $9.5 million, or $0.87 per share, for the similar period in 1997. Net loss for the respective nine month periods in 1998 and 1997 includes $300,000 and $200,000, or $0.03 and $0.01 per share, of loss from discontinued operations. The increase in losses for the three and nine month periods are primarily attributable to a substantial rise in selling expenses, which increased $4.4 million and $10.5 million for the respective periods.

Loan applications received during the third quarter of 1998 increased 134.1%, to 1,838 from 785 in the third quarter of 1997. For the nine months ended September 30, 1998, total loan applications received were up 91.4% to 4,144 from 2,165 in the similar period in 1997. At September 30, 1998, DeGeorge had 1,450 loan applications in active processing as compared to 491 at September 30, 1997, an increase of 959, or 195.3%. Backlog includes 582 preliminary credit-approved loan applications at September 30, 1998 for which customers had also identified their building site as compared to 220 similar loan applications at September 30, 1997, an increase of 365, or 164.5%. Backlog also includes 868 and 271 loan applications at September 30, 1998 and 1997, respectively, which were in early stages of processing, an increase of 597, or 220.3%.

As previously announced, the Company has signed a definitive agreement to be acquired through a merger by a corporation controlled by Mr. Peter R. DeGeorge, Chairman and Chief Executive Officer of the Company, and certain other persons. Under the merger agreement, each of the outstanding shares of common stock of the Company, other than shares owned by members of the buy-out group, will be converted into the right to receive $1.50 in cash. On April 29, 1998, the Company filed a preliminary Proxy Statement with the Securities and Exchange Commission in connection with a special meeting of the Company's stockholders to consider the approval and adoption of the Agreement and Plan of Merger dated as of January 29, 1998. On June 30, 1998, the Company filed a revised Preliminary Proxy Statement and response letter with the SEC pursuant to the SEC's comment letter dated June 10, 1998. Since June 30, 1998, the Company has continued to exchange telephone calls and correspondence with the SEC. The Company expects to complete the merger during the fourth fiscal quarter of 1998.

DeGeorge Financial Corporation arranges financing and is currently managing over $300 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 financial services 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.