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CRESTMONT FINANCIAL REPORTS RESULTS

 CRESTMONT FINANCIAL REPORTS RESULTS
 EDISON, N.J., Jan. 28 /PRNewswire/ -- Crestmont Financial Corp.


(NASDAQ-NMS: CRES), the holding company for Crestmont Federal Savings and Loan Association, announced today that earnings for the quarter ended Dec. 31, 1991, were reduced due to the acceleration of monthly amortization of purchased mortgage servicing rights and deferred premium on loan sales.
 The accelerated amortization was due to an increase in mortgage loan prepayment estimates which were caused by the reduction in interest rates. These non-cash charges were approximately $753,000 greater than the same quarter a year ago, and are reflected in a decline in loan servicing income as stated below. For its third fiscal quarter ended Dec. 31, 1991, earnings were $83,000 or $0.02 per share compared with $252,000 or $0.07 per share in the corresponding period a year ago. For the first nine months of fiscal 1992 earnings were $458,000 or $0.12 per share compared with $428,000 or $0.11 per share a year ago. The company's tangible book value per share at Dec. 31, 1991, was $14.86.
 At Dec. 31, 1991, Crestmont Federal's tangible, core, and risk-based capital ratios were 4.58 percent, 4.58 percent, and 8.96 percent, respectively. This compares with 3.39 percent, 3.41 percent, and 7.49 percent at Dec. 31, 1990, and 4.08 percent, 4.08 percent, and 8.16 percent at fiscal year end March 31, 1991. The ratio of stockholders' equity to total assets at Dec. 31, 1991, was 4.75 percent.
 Net interest income for the quarter was $7.1 million compared with $7.5 million for the December quarter last year. For the first nine months of fiscal 1992, net interest income was $22 million compared with $21.7 million for the same period one year ago. The decrease in net interest income for the quarter was primarily due to the reduction in average earning assets which declined from $1.4 billion for the quarter ended Dec. 31, 1990, to $1.1 billion for the quarter ended Dec. 31, 1991. For the first nine months of fiscal 1992 average earning assets were $1.2 billion compared with $1.5 billion for the first nine months of fiscal 1991. The net interest margins for the three month- and nine month-periods ended Dec. 31, 1991. were 2.62 percent and 2.63 percent, respectively, compared with 2.20 percent and 2.09 percent for the same period last year. The increase in the net margin is primarily due to the decline in deposit and borrowing costs resulting from the decrease in short-term interest rates compared with last year.
 During the quarter, provisions for loan and real estate owned losses were $500,000 and $1 million, respectively. These provisions were based on management's evaluation considering the current and projected future outlook, as well as the known standards in the current regulatory environment. At Dec. 31, 1991, non-performing assets were $67.2 million compared with $67.6 million at Sept. 30, 1991, and $69.7 million at March 31, 1991. Non-performing assets consist of $27.9 million of non- performing loans, including $16.9 million of residential loans, and $39.3 million of real estate owned and insubstance foreclosures. Included in non-performing assets are approximately $8.3 million under contract for sale. While the trend with regard to non-performing assets has remained relatively stable over the last seven quarters, continued weakness in the New Jersey real estate market could result in further declines in the carrying value of assets and an increase in non- performing assets, which may result in increased levels of loan and real estate owned loss provisions in the future as conditions dictate. At Dec. 31, 1991, the allowance for loan losses was $12.6 million and the allowance for real estate owned losses was $4.9 million compared with $12.2 million and $4.2 million, respectively, at Sept. 30, 1991, and $12.7 million and $1.8 million, respectively at March, 31, 1991.
 In this weak and volatile economic environment fluctuations in interest rates can also cause uneven quarterly results in the future as was true in the quarter just ended.
 Loan servicing income declined from $1.3 million for the quarter ended Dec. 31, 1990, to a loss of $72,000 for the quarter ended Dec. 31, 1991. The decline was primarily due to the increased amortization of the servicing rights purchased and deferred premium on sale of loans caused by the substantial decline in interest rates over the last quarter and the associated increase in projected loan prepayment estimates. In addition, loan servicing income was negatively impacted by the sales of mortgagee servicing rights in April 1991 and December 1990 which reduced the total balance of loans serviced for others. Because of the potential volatility of interest rate movements and loan prepayment rates, the future trend in loan servicing income is difficult to project.
 Total other expenses decreased 18.01 percent from $7.2 million for the quarter ended Dec. 31, 1990, to $5.9 million for the quarter ended Dec. 31, 1991, due to managements continued efforts to control costs and improve productivity. For the first nine months of fiscal 1992, total operating expenses were reduced 18.5 percent compared with the same period in fiscal 1991.
 Crestmont Federal Savings and Loan Association, a wholly owned subsidiary of Crestmont Financial Corp., with $1.2 billion in assets, has 15 retail branch locations, and two loan production offices serving Essex, Middlesex, Monmouth, Morris and Union counties in New Jersey.
 CRESTMONT FINANCIAL CORP. AND SUBSIDIARY
 Consolidated Statements of Financial Condition
 (Dollars in thousands)
 12/31/91 3/31/91
 (Unaudited)
 Assets
 Cash and due from banks $17,437 $10,721
 Investment securities 20,447 30,311
 Loans 691,453 772,447
 Less: Allowance for loan losses (12,568) (12,700)
 Net loans 678,885 759,747
 Mortgage loans held for sale 19,287 9,439
 Mortgage-backed securities, net 352,700 375,700
 Interest and dividends receivable 12,036 14,147
 Real estate owned, net 34,360 24,147
 Federal Home Loan Bank stock, at cost 15,165 14,665
 Servicing rights purchased and
 deferred premium on sale of loans 22,819 28,755
 Office properties and equipment, net 4,183 4,278
 Other assets 9,345 14,527
 Total assets 1,186,664 1,286,437
 Liabilities and stockholders' equity
 Deposits 842,431 832,883
 Securities sold under repurchase
 agreements 47,176 54,303
 Borrowed money 221,265 322,661
 Advance payments by borrowers
 for taxes and insurance 4,449 6,285
 Accrued expenses and other liabilities 14,986 14,410
 Total liabilities 1,130,307 1,230,542
 Stockholders' equity:
 Preferred stock, 10 million shares
 authorized; none issued -- --
 Common stock, par value $1, 20 million
 shares authorized; issued and outstanding,
 3,792,393 at Dec. 31, 1991, and 3,791,325
 at March 31, 1991 3,792 3,791
 Paid-in capital 35,187 35,185
 Retained earnings 17,378 16,919
 Total stockholders' equity 56,357 55,895
 Total liabilities and stockholders'
 equity 1,186,664 1,286,437
 Consolidated Statements of Operations
 (Unaudited; dollars in thousands, except per-share amounts)
 Periods ended Three months Nine months
 Dec. 31 1991 1990 1991 1990
 Interest income:
 Interest on loans $17,084 $20,851 $54,996 $69,295
 Interest on mortgage-
 backed securities 8,434 13,432 26,113 34,064
 Interest and dividends
 on investments 827 1,324 3,142 4,123
 Total interest income 26,345 35,607 84,251 107,482
 Interest expense:
 Interest on deposits 13,269 15,907 41,810 51,477
 Interest on borrowed money 6,016 12,179 20,396 34,340
 Total interest expense 19,285 28,086 62,206 85,817
 Net interest income 7,060 7,521 22,045 21,665
 Provision for loans losses 500 1,034 1,284 3,515
 Net interest income after
 provision for loan losses 6,560 6,487 20,761 18,150
 Other income:
 Loan servicing income (72) 1,341 1,627 4,283
 Deposit account fees and
 other income 745 973 2,199 3,072
 Real estate owned operations,
 net (96) (55) (749) (500)
 Provision for real estate
 owned losses (1,000) (1,885) (6,005) (2,567)
 Net gain on sales of
 mortgage loans 246 209 347 152
 Net gain (loss) on sales of
 securities -- (1,932) 12 (2,024)
 Net gain on sales of servicing
 and other assets 229 3,130 2,338 3,317
 Total other income 52 1,781 (231) 5,733
 Other expenses:
 Salaries and employee
 benefits 2,386 2,957 7,278 9,165
 Occupancy 1,128 1,455 3,958 4,828
 Information and
 communications 1,103 1,015 3,170 3,265
 Professional and
 administrative 817 1,101 2,210 2,806
 Federal insurance premiums 462 490 1,404 1,572
 Other 37 218 237 764
 Total other expenses 5,933 7,236 18,257 22,400
 Income before income tax
 expense 679 1,032 2,273 1,483
 Income tax expense 596 780 1,815 1,055
 Net income 83 252 458 428
 Net income per share $0.02 $0.07 $0.12 $0.11
 Average number shares
 of common stock outstg. 3,900 3,791 3,902 3,791
 -0- 1/28/92
 /CONTACT: Eric P. Graap of Crestmont Financial, 908-287-3838, ext. 357/
 (CRES) CO: Crestmont Financial Corp. ST: New Jersey IN: FIN SU: ERN CK-SM -- NY080 -- 4421 01/28/92 16:55 EST
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