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F.F.O FINANCIAL GROUP REPORTS SECOND QUARTER AND YEAR TO DATE RESULTS

F.F.O FINANCIAL GROUP REPORTS SECOND QUARTER AND YEAR TO DATE RESULTS
 ST. CLOUD, Fla., July 29 /PRNewswire/ -- F.F.O. Financial Group, Inc. (NASDAQ: FFFG), a Florida-based unitary savings and loan holding company, today reported a net loss of $7.0 million, or $3.19 per share, for the three months ended June 30, 1992, compared to a net loss of $148,800, or $0.07 per share, for the same period in 1991. The loss for the 1992 period reflects the effect of a $7.7 million provision for possible loan losses established during the second quarter.
 For the first six months of 1992, the company reported a net loss of $6.9 million, or $3.14 per share, compared to a previously reported net loss of $297,800, or $0.14 per share, for the six months ended June 30, 1991. However, in December 1991 the company adopted Statement of Financial Accounting Standards Board No. 109, "Accounting for Income Taxes" ("FAS 109"). The cumulative effect of the change in accounting for income taxes (reported by the company as of Jan. 1, 1991), increased the company's reported net income for the six months ended June 30, 1991 by $1,290,000, or $0.59 per share.
 The provision for loan losses was $7.8 million for the six months ended June 30, 1992, compared to $734,000 for the six months ended June 30, 1991. Of the 1992 provision, $1.0 million is attributable to loans in the portfolio of the company's primary subsidiary, First Federal Savings and Loan Association of Osceola County ("First Federal"), which is a federally chartered savings and loan association operating 12 full- service branches in Central Florida.
 The other $6.8 million of the 1992 provision results from the risk elements related to, and the value of, loans in the portfolio of two lending subsidiaries of First Federal, Gulf American Financial Corporation ("GAFC") and Gulf American SBL, Inc. ("Gulf American"). The company has ceased originating loans through GAFC and Gulf American, having determined in 1991 to wind down the operations of both subsidiaries. As of June 30, 1992, the GAFC and Gulf American loan and real estate owned portfolios had an aggregate carrying value of $28.3 million, and the allowance for losses allocated to such portfolios was $9.0 million, or 31.8 percent of the aggregate GAFC and Gulf American portfolios at such date.
 First Federal is currently undergoing a joint examination by both the Office of Thrift Supervision ("OTS") and the Federal Deposit Insurance Corporation ("FDIC"). The joint examination is part of the OTS's and the FDIC's regular supervision of First Federal and includes evaluations of the loan and real estate owned allowances of First Federal and its subsidiaries. First Federal has not yet received the results of the joint examination, which is not expected to be completed until late August 1992. The estimation of appropriate levels of loss allowances is a process that involves a high degree of subjectivity, and the regulatory authorities may arrive at conclusions that differ from management's regarding loss allowance levels. Although the company believes that its allowance for losses is adequate as of June 30, 1992, the OTS and the FDIC could require First Federal to increase its loan and real estate owned loss allowances if they determine the allowances are inadequate as a result of the joint examination or otherwise.
 The company's net interest income increased $360,000 or 14.4 percent for the second quarter of 1992 compared to the similar period in 1991. Net interest income increased $638,000 or 12.6 percent for the six months ended June 30, 1992 compared to the first six months of 1991.
 Other income for the three month period ended June 30, 1992 decreased $299,000 or 20.2 percent, compared to the same period in 1991, and decreased $725,000 or 25.9 percent during the six months ended June 30, 1992, compared to the similar period in 1991. These decreases were primarily a result of the company's 1991 decision to wind down the operations of GAFC and Gulf American, and the related sales during 1991 of substantially all of the assets of Gulf American.
 Other expenses decreased by $531,000 or 13.9 percent for the three month period ended June 30, 1992, compared to the similar period in 1991. Other expenses decreased by $935,000 or 12.2 percent for the six month period ended June 30, 1992, compared to the first six months of 1991. These reductions in expenses were also primarily a result of winding down the operations of GAFC and Gulf American.
 As of June 30, 1992, the company reported total assets of $351.3 million, and total stockholders' equity of $11.4 million or $5.23 per share, compared to $18.3 million and $8.38 per share at Dec. 31, 1991. Shares outstanding at the end of the second quarter of 1992 totaled 2,180,000.
 First Federal reported tangible and core capital ratios of 3.24 percent at June 30, 1992, compared to 4.89 percent at Dec. 31, 1991. The minimum tangible capital requirement at each of those dates was 1.5 percent, and the minimum core capital requirement at such dates was 3.0 percent. The OTS has proposed to increase the minimum core capital requirement for all but the most highly rated associations to 4.0 percent to 5.0 percent of adjusted total assets. The Association would most likely be subject to increased core capital requirements in the future upon the adoption of such proposal. In addition, First Federal reported risk-based capital of 5.76 percent at June 30, 1992, compared to 7.99 percent at Dec. 31, 1991. The minimum risk-based capital requirement was 7.20 percent at each of those dates, and is scheduled to increase to 8.00 percent at Dec. 31, 1992.
 As a result of the Association's failure to comply with current regulatory capital requirements, it may become subject to regulatory directives or agreements, or other enforcement actions, to increase capital, reduce the level of nonperforming assets, improve the results of operations, limit specific aspects of operations or otherwise correct deficiencies. In addition, under certain proposed OTS regulations, the Association would be required to submit a capital restoration plan for OTS approval, and may become subject to additional regulatory restrictions. Pursuant to such proposed regulation, the company would be required to submit a limited performance guarantee. No assurance can be given at this time as to the implementation or extent of regulatory restrictions upon the Association and/or the company as a result of the Association's inability to comply with current regulatory capital requirements.
 F.F.O. FINANCIAL GROUP, INC.
 CONSOLIDATED STATEMENTS OF INCOME
 (unaudited)
 Three Months Ended Six Months Ended
 June 30, June 30,
 1992 1991 1992 1991
 INTEREST INCOME
 Interest and
 fees on loans $ 6,273,288 $7,920,736 $12,953,178 $16,003,256
 Mortgage-backed
 securities -- 312,065 3,869 751,731
 Investments 167,303 291,088 335,498 594,463
 Other 295,754 214,106 611,311 702,698
 Total 6,736,345 8,737,995 13,903,856 18,052,148
 INTEREST EXPENSE
 Deposits 3,514,663 5,587,257 7,487,620 11,480,522
 Borrowings 360,897 650,285 721,794 1,515,146
 Total 3,875,560 6,237,542 8,209,414 12,995,668
 Net Interest
 Income 2,860,785 2,500,453 5,694,442 5,056,480
 Provision for
 loan losses 7,671,803 483,691 7,805,000 733,827
 Net Interest Income
 After Provision
 for Loan Losses (4,811,018) 2,016,762 (2,111,558) 4,322,653
 OTHER INCOME
 Loan origination
 and other
 loan fees 66,474 60,409 149,202 218,888
 Loan servicing
 fees 109,530 313,045 191,070 617,334
 Service charges on
 deposit accounts 362,195 407,503 716,998 751,178
 Gain (loss) on sale
 of investments -- 53,514 33,759 53,514
 Gain on sale
 of loans 546,732 589,629 815,477 1,065,286
 Gain on sale
 of property 56 -- 56 --
 Other 94,230 54,177 166,655 91,725
 Total 1,179,217 1,478,277 2,073,217 2,797,925
 OTHER EXPENSES
 Employee
 compensation
 and benefits 1,225,052 1,580,187 2,515,084 3,275,404
 Occupancy and
 equipment 605,450 746,772 1,211,460 1,448,874
 FDIC insurance
 premiums 188,700 204,825 377,400 409,650
 Goodwill
 amortization -- 11,850 -- 23,700
 Marketing and
 advertising 81,543 138,987 181,826 337,544
 Data processing 172,533 186,557 365,542 376,724
 Legal fees 119,255 -- 213,375 111,191
 Real estate
 owned expense 328,982 -- 502,249 300,671
 Loss on sale of
 office property -- 73,985 -- 74,292
 Other 572,405 881,977 1,371,277 1,315,328
 Total 3,293,920 3,825,140 6,738,213 7,673,378
 (LOSS) BEFORE
 INCOME TAXES (6,925,721) (330,101) (6,776,554) (552,800)
 Provision (credit)
 for Income Taxes 32,311 (181,319) 81,017 (254,991)
 Net (Loss) Before
 Cumulative Effect
 of a Change in
 Accounting
 Principle (6,958,032) (148,782) (6,857,571) (297,809)
 Cumulative effect
 on prior years of
 adopting FAS 109 -- -- -- 1,290,000
 Net Income
 (Loss) $(6,958,032) $ (148,782) $(6,857,571) $ 992,191
 -0- 7/29/92
 /CONTACT: Phyllis A. Elam, chief financial officer of F.F.O. Financial Group, 407-957-7421/
 (FFFG) CO: F.F.O. Financial Group, Inc. ST: Florida IN: FIN SU: ERN


JB-AW -- FL005 -- 4616 07/29/92 12:38 EDT
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