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VIRGINIA FIRST SAVINGS BANK ANNOUNCES EARNINGS

 PETERSBURG, Va., Aug. 6 /PRNewswire/ -- Virginia First Savings Bank, F.S.B. (NASDAQ: VFSB), today announced net earnings of $6,404,000 or $2.34 per share for the fiscal year ended June 30, 1993, an increase of 219 percent from the $2,009,000 or $.76 per share for the fiscal year ended June 30, 1992.
 Included in fiscal year 1993 net earnings are the effects of adopting the Financial Accounting Standards Board's Statement No. 109, "Accounting for Income Taxes" ("SFAS 109"). This change in accounting for income taxes has been accounted for as a cumulative effect as of the beginning of the fiscal year, increasing fiscal year 1993 net earnings by $1,150,000 or $.43 per share. Previously published quarterly operating results for the first three quarters of fiscal year 1993 did not reflect the adoption of SFAS 109 as Virginia adopted SFAS 109 during the fourth fiscal quarter retroactive to July 1, 1992. Without the $1,150,000 cumulative effect, net earnings for fiscal year 1993 are $5,254,000 or $1.91 per share, an increase of 162 percent over fiscal year 1992.
 William A. Patton, chairman of the board of directors, noted that "the net earnings for fiscal year 1993 of $5,254,000 (excluding the effects of SFAS 109) represented a 1.00 percent return on average total assets and a 16.26 percent return on average equity, while earnings for fiscal year 1992 represented a 0.40 percent return on average total assets and a 7.40 percent return on average equity."
 Patton also announced that Virginia First will pay a quarterly dividend of 2.5 cents per share to its stockholders of record as of Aug. 13, 1993. The dividend reinstatement, Patton noted, "is reflective of substantially improved current earnings and the potential for earnings continuity." The bank's present dividend policy anticipates a regular quarterly dividend.
 Both total interest income and total interest expense during the fiscal year ended June 30, 1993, were lower than in the previous fiscal year due to the generally lower yields and rates prevailing in the marketplace. However, the net interest income of $18,457,000 for fiscal year 1993 was 32.1 percent higher than the $13,976,000 in the previous year. According to Patton, "the improved net interest margin performance is due to the continuing maturity and repricing of retail deposits and other interest-bearing liabilities together with attractive yields provided through Virginia First's construction and retail lending divisions."
 Virginia First continued its practice of selling its fixed rate conventional and fixed rate government-guaranteed mortgage production in the secondary market, while retaining the right to service most of the conventional loans. In response to market conditions during the third fiscal quarter, Virginia First reduced its exposure to runoff of adjustable rate mortgages by selling $25.2 million of adjustables from its mortgage loan portfolio and as a result recorded a pre-tax gain of $798,000. Virginia First retained the servicing for these adjustable rate loans.
 During fiscal year 1993, Virginia First expanded its market territory by opening mortgage production offices in the Virginia communities of Blacksburg and Charlottesville, increasing to 13 the number of mortgage production offices operated by Virginia First in the states of Virginia and Maryland.
 Virginia First closed a record volume of $761.4 million of residential mortgage loans in fiscal year 1993. This was 54 percent higher than the $495.1 million produced in fiscal year 1992. Virginia First sold $693.0 million of residential mortgage loans in the secondary market in fiscal year 1993, which was 63 percent more than the $424.2 million sold in fiscal year 1992.
 The net amount of mortgage loans serviced for others increased by $233.8 million to $653.6 million at June 30, 1993, notwithstanding the sales of approximately $147.6 million of mortgage servicing rights during the year and unprecedented prepayments in the existing servicing portfolio due primarily to refinance activity.
 Management continued the posture of providing reserves where appropriate to mitigate the potential impact of future credit or market losses. Additional provisions totalling $4,810,000 were taken during fiscal year 1993 to reduce the carrying value of various assets affected by the substantial level of mortgage prepayments occurring in the present interest rate environment and as additions to allowance for loan losses and as specific writedowns of foreclosed assets. Similar provisions totaling $2,596,000 were taken in fiscal year 1992.
 Total assets were $561,239,000 at June 30, 1993, compared to $518,020,000 at June 30, 1992. Deposit liabilities were $454,231,000, compared to $451,674,000 a year ago.
 At June 30, 1993, stockholders' equity was $34,512,000 or $13.15 per share. Virginia First exceeds all of the regulatory capital requirements, as shown in the last portion of the financial data that follows.
 The board of directors has approved a plan under which Virginia First would reorganize into a holding company corporate structure effective Jan. 1, 1994, and expects to submit the plan for a vote at the annual meeting of the stockholders.
 Virginia First presently operates 22 full service retail branches in central and western Virginia and 13 mortgage production offices in the states of Virginia and Maryland.
 VIRGINIA FIRST SAVINGS BANK
 Selected Financial Data
 (Dollars in Thousands Except Per Share Data)
 Fiscal Years Ended June 30,
 1993 1992 1991
 Selected Operating Data:
 Total Interest Income $40,307 $42,010 $43,771
 Total Interest Expense 21,850 28,034 34,290
 Net Interest Income 18,457 13,976 9,481
 Provision for Loan Losses 1,171 1,859 1,989
 Other Income 9,735 4,535 1,109
 Other Expenses 21,857 14,643 9,094
 Net Earnings (Loss) Before
 Cumulative Effect of Change
 in Accounting Principle 5,254 2,009 (493)
 Cumulative Effect on Prior
 Years of Adopting SFAS 109 1,150 -- --
 Net Earnings (Loss) 6,404 2,009 (493)
 Per Share Data:
 Net Earnings (Loss) Before
 Cumulative Effect of Change
 in Accounting Principle $1.91 $.76 $(.19)
 Cumulative Effect on Prior
 Years of Adopting SFAS 109 .43 -- --
 Net Earnings (Loss) 2.34 .76 (.19)
 Selected Ratios (Percent):
 Return on Average Assets(A) 1.00 0.40 -0.10
 Return on Average Equity(A) 16.26 7.40 -1.82
 Average Equity/Average Assets(A) 6.13 5.37 5.56
 (A) Before cumulative effect on prior years of adopting SFAS 109.
 Selected Financial Data
 (Dollars in Thousands Except Per Share and Office Data)
 June 30,
 1993 1992 1991
 Financial Condition Data:
 Total Assets $561,239 $518,020 $561,973
 Loans Receivable 465,009 415,515 431,290
 Mortgage-Backed Securities 23,817 16,604 18,099
 Deposits 454,231 451,674 482,691
 Borrowed Funds 66,638 33,022 40,629
 Stockholders' Equity 34,512 28,103 27,570
 Book Value Per Share 13.15 10.71 9.91
 Other Data:
 Full Service Branch Offices 22 22 17
 Mortgage Loan Offices 13 11 6
 Mortgage Loans Serviced
 for Others $653,593 $419,792 $159,725
 Capital Ratios at June 30, 1993:
 OTS Requirement Actual
 As Percentage Dollar As Percentage Dollar Excess
 of Assets Amount of Assets Amount Over
 Require-
 ment
 Tangible
 Capital 1.50pct $8,370 5.60pct $31,270 $22,900
 Core
 Capital 4.00pct 22,350 6.09pct 34,054 11,704
 Risk-Based
 Capital 8.00pct 28,593 10.67pct 38,152 9,559
 -0- 8/6/93
 /CONTACT: Charles A. Patton, President, or Paul W. Walk Jr., Senior Vice President, Virginia First Savings Bank, 804-733-0333 or 804-748-5847/
 (VFSB)


CO: Virginia First Savings Bank, F.S.B. ST: Virginia IN: FIN SU: ERN

CM-DF -- CH001 -- 0244 08/06/93 10:16 EDT
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Date:Aug 6, 1993
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