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VIRGINIA BEACH FEDERAL ANNOUNCES CONSOLIDATED EARNINGS FOR THE FIRST QUARTER OF 1992

 VIRGINIA BEACH FEDERAL ANNOUNCES CONSOLIDATED EARNINGS
 FOR THE FIRST QUARTER OF 1992
 VIRGINIA BEACH, Va., April 24 /PRNewswire/ -- Virginia Beach Federal Financial Corporation (NASDAQ-NMS: VABF) today reported consolidated net income of $535,000 or $0.11 per share for the first quarter of 1992, compared to $2,896,000 or $0.58 per share during the same period in 1991. Total assets remained relatively stable during the quarter, increasing by $965,000 to $667,783,000 at March 31, 1992.
 The decrease in net income from the prior year quarter was expected as 1991's net income included $7,590,000 in pre-tax gain on sales of Federal Home Loan Mortgage Corporation ("Freddie Mac") common stock. Virginia Beach Federal sold its remaining shares in Freddie Mac during 1991. However, first quarter 1992 net earnings are consistent with the level of core earnings which the Corporation reported for the prior three quarters.
 Net interest income before provision for loan losses improved to $2,887,000 during the first quarter as compared to $2,390,000 during the fourth quarter of 1991, and $2,445,000 during the first quarter of 1991. The increase is largely due to the sharp decline in short term interest rates over the past year, which has enabled the Bank to reduce its deposit and other borrowing costs. However, the full benefits of reduced borrowing costs have been somewhat offset by the increased prepayments of higher coupon loans.
 Non-interest income, excluding gain on sales of Freddie Mac common stock, increased to $1,068,000 for the quarter, a $338,000 increase over the first quarter of 1991. The increase is due to the increased gains recognized on sales of loans by the Bank's mortgage banking subsidiary, Beach Fed Mortgage Corp ("Beach Fed"). Loan originations at Beach Fed during the first quarter increased 84 percent to $40,500,000 as compared to the prior year. "Although the growth in loan originations was influenced by the recent surge in refinances, we are expecting continued growth for Beach Fed as we enhance our presence in the Hampton Roads mortgage market," noted Dennis R. Stewart, Executive Vice President and Chief Financial Officer.
 Operating expenses during the quarter, excluding provisions for possible losses on real estate acquired in settlement of loans, were $3,000,000, a net increase of $82,000 as compared to the first quarter of 1991. Increased loan volumes at Beach Fed caused a year to year increase in first quarter operating expenses of $275,000, while Bank-only operating expenses decreased by $193,000. Stewart noted that steps taken at the Bank to control operating expenses during 1991 are directly responsible for the decrease.
 Non-performing assets, composed of real estate acquired in settlement of loans (REO) and loans which are 90 days or more delinquent, totaled $30,168,000 or 4.5 percent of total assets at March 31, 1992 as compared to $25,511,000 or 3.8 percent at December 31, 1991 and $35,300,000 or 5.1 percent at March 31, 1991. The increase in non-performing assets since year end 1991 is mainly due to the delinquency of two mortgage loans in the Virginia Beach area and the purchase from the Resolution Trust Corporation of the remaining interest in one of the Bank's REO properties, thus enabling the Bank to control the disposition of the entire property known as the Jeremy Ranch.
 The Bank's regulatory capital ratios, on both a current and fully phased-in basis, continue to exceed the minimum requirements at the end of the first quarter. The Bank's current core and tangible capital ratios were each 6.0 percent as compared to a 3 percent requirement, while the risk-based ratio was 11.5 percent as compared to a 7.2 percent requirement.
 Virginia Beach Federal Financial Corporation is the parent company of Virginia Beach Federal Savings Bank. The Financial Corporation has no other activities. The bank, headquartered in Virginia Beach, Virginia, is a 57 year old institution providing full financial services to customers in the Hampton Roads area of Virginia.
 -0- 4/24/92
 /CONTACT: Dennis R. Stewart, Virginia Beach Federal Financial Corporation, 804-428-9331/
 (VABF) CO: Virginia Beach Federal Financial Corporation ST: Virginia IN: FIN SU: ERN


CM-JM -- CH010 -- 2537 04/24/92 14:11 EDT
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Date:Apr 24, 1992
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