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 VIRGINIA BEACH, Va., Aug. 13 /PRNewswire/ -- Essex Financial Partners, L.P. (AMEX: ESX), today announced a $2.7 million loss for the second quarter of 1993. The loss was predominantly attributable to a $2.1 million operating loss incurred at Essex Mortgage Corporation (EMC), the partnerships non-bank mortgage subsidiary, and a one-time regulatorily mandated adjustment to excess servicing assets that was recognized at Essex Savings Bank, F.S.B. (ESB). The partnership's net loss for the quarter ended June 30, 1993, resulted in a net loss of $1.29 per Class A limited partnership unit as compared to a net loss of $2.53 per unit for the quarter ended June 30, 1992. Furthermore, partners' capital decreased from approximately $1.7 million at March 31, 1993, to a deficit of approximately $1.0 million at June 30, 1993. Notwithstanding the deficit capital position of the partnership, its wholly owned thrift holding company subsidiary, Essex Bancorp, has total shareholders' equity of $16.9 million.
 Despite the second quarter loss, the partnership's non-performing assets, net of specific reserves, decreased from $24.3 million at Dec. 31, 1992, to $19.9 million at June 30, 1993. Furthermore, excluding a single $2.6 million commercial real estate loan that management believes to be adequately collateralized and reserved, loans in the 30-59 day and 60-89 day delinquency categories continue to decline, as delinquent loans in these categories decreased from $6.7 million at Dec. 31, 1992, to $4.4 million at June 30, 1993. It is anticipated that there will be no future losses in excess of those already provided for in connection with the delinquent commercial real estate loan, which subsequent to June 30, 1993, has been placed on a non-accrual status.
 The operating losses at EMC continue to result from the accelerated amortization of purchased mortgage servicing rights (PMSRs) owned by EMC and the high amount of interest expense on EMC's debt securities (the Essex 11s), in addition to approximately $900,000 in professional fees incurred during the second quarter of 1993 in connection with the recently completed restructuring of the Essex 11s, which was described in the partnership's May 7, 1993, press release. Because EMC's PMSRs were sold in July 1993 to a third-party purchaser as part of the restructuring of the Essex 11s, and because all the Essex 11s are expected to be canceled in due course, the restructuring will mitigate the further adverse impact on EMC's and the partnership's operations resulting from the amortization of the PMSRs and the recognition of interest expense and professional fees.
 ESB incurred a $412,000 operating loss for the second quarter of 1993 that was attributable predominantly to additional amortization for the impairment of excess servicing assets and loan premiums of $929,000 and $65,000, respectively. As previously mentioned, included as part of the impairment of ESB's excess servicing assets was a $405,000 regulatorily mandated adjustment related to a change in methodology by which excess servicing is valued. If not for this one-time regulatorily mandated adjustment, ESB would have recognized a nominal operating profit during June 1993, the first full post-merger month of operations.
 As announced in the partnership's May 7, 1993, press release, the restructuring of the partnership and the merger of its savings banks have been consummated. As of June 30, 1993, ESB was "adequately capitalized" under the prompt corrective action (PCA) regulations, and thus no longer subject to supervisory action, the severity of which depends on the degree of undercapitalization. Furthermore, ESB was formally notified by the Office of Thrift Supervision on July 14, 1993, that as a result of its classification as an "adequately capitalized" institution for purposes of PCA, the withdrawal of its previously submitted capital plan was approved. Management believes that the merger and the declining level of non-performing assets will enable ESB to realize substantial reductions in operating costs, among other benefits, which should enhance the partnership's future performance.
 -0- 8/13/93
 /CONTACT: Essex Financial Partners, L.P., Investor Relations, 804-431-5612/

CO: Essex Financial Partners, L.P. ST: Virginia IN: FIN SU: ERN

TW-KD -- DC016 -- 2677 08/13/93 16:11 EDT
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Publication:PR Newswire
Date:Aug 13, 1993

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