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METROPOLITAN FEDERAL REPORTS 48 PERCENT EARNINGS GAIN AND APPROVAL OF HOLDING COMPANY

 SEATTLE, July 21 /PRNewswire/ -- Metropolitan Federal Savings and Loan Association of Seattle (NASDAQ: MSEA) has just completed its 12th consecutive quarter of higher profitability. Net income before extraordinary or nonrecurring items for the first fiscal quarter ended June 30, 1993, increased 48 percent to $1.6 million or 48 cents per share, compared to $1.1 million or 33 cents per share for the previous year's quarter.
 In addition, the company reported a $408,000 nonrecurring adjustment for the cumulative effect of a change in accounting principle for total reported earnings for the quarter of $2.0 million or 61 cents per share. This compares to net income for the first fiscal quarter one year ago of $1.3 million or 41 cents per share after an extraordinary item representing utilization of net operating loss carryforwards.
 Metropolitan's annualized return on average equity before extraordinary or nonrecurring items was 15.52 percent for the quarter ended June 30, 1993, compared to 12.27 percent for the quarter ended June 30, 1992. Return on average assets before extraordinary or nonrecurring items was 1.18 percent for the quarter ended June 30, 1993, compared to 1.05 percent for the same period a year ago. Net interest margin was 2.96 percent for the first quarter of fiscal 1994, compared to 3.41 percent for the first quarter of fiscal 1993.
 Patrick F. Patrick, president and chief executive officer, said today, "The quarter was especially noteworthy for the improvement in quality of assets."
 During the quarter, nonperforming assets of the association were reduced to $9.6 million from $15.1 million at March 31, 1993, a reduction to 1.75 percent of assets at June 30, 1993, from 2.98 percent of assets at March 31, 1993. Of the improvement, $2.4 million was due to assets being paid off, and the balance was due to the resumption of payments on previously troubled loans.
 As well, general and administrative expenses as a percentage of average assets improved to 1.44 percent on an annualized basis for the quarter ended June 30, 1993, as compared to 2.15 percent for the same quarter one year ago.
 Patrick said, "Our G&A to assets ratio is in the high-achieving range of savings associations across the country. Although we are pleased with the progress to date, we are expecting further improvements in the coming periods.
 "We believe that the company's posture of maintaining a conservative balance sheet has served the shareholders well while providing safety for the customers of our various savings plans," Patrick added.
 Metropolitan's assets totaled $550 million at June 30, 1993, compared to $508 million at March 31, 1993, and $438 million at June 30, 1992. Capital totaled $41.8 million or 7.6 percent of assets at the end of June 1993, compared to $39.8 million or 7.84 percent of assets at March 31, 1993, and $35.1 million or 8.03 percent of assets at June 30, 1992. Metropolitan's book value per share was $12.81 at June 30, 1993.
 Metropolitan also announced that at today's annual meeting, its shareholders approved the formation of Metropolitan Bancorp, a savings and loan holding company.
 "We believe that this new holding company will enable us to continue to deliver superior investment returns to our shareholders and high- quality service to our customers. By their vote today, our shareholders showed that they share this belief," Patrick said.
 Metropolitan Federal is an FDIC-insured, federally chartered savings and loan association organized in 1935 with seven branches in the greater Puget Sound area.
 METROPOLITAN FEDERAL SAVINGS AND LOAN ASSOCIATION OF SEATTLE
 AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 (In thousands except per share data)
 June 30, March 31,
 1993 1993
 (unaudited)
 ASSETS
 Cash and due from banks
 (including interest-bearing
 deposits of $2,109 and $844) $ 2,614 $ 1,358
 Securities held for sale (fair
 value of $20,873 and $20,705) 20,594 20,589
 Mortgage-backed securities held
 for sale (fair value of $25,019
 and $27,282) 24,572 27,138
 Mortgage-backed securities held
 for investment (fair value of
 $195,506 and $139,190) 192,967 137,694
 Loans (net of reserve for losses
 of $5,783 and $5,632) 272,611 285,126
 Loans held for sale 5,329 3,847
 Accrued interest receivable 3,066 3,000
 Real estate held for sale 7,008 8,728
 Real estate held for investment 7,057 6,928
 Federal Home Loan Bank (FHLB)
 stock, at cost 8,819 8,203
 Premises and equipment, net 4,305 4,258
 Prepaid expenses and other assets 1,424 1,121
 Total assets $550,366 $507,990
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Deposits $327,375 $307,323
 Advances from FHLB 163,950 150,520
 Other borrowings 12,255 4,685
 Federal income taxes
 Current 1,212 515
 Deferred --- 193
 Other liabilities 3,754 4,920
 Total liabilities 508,546 468,156
 Preferred stock, 10,000,000 shares
 authorized; no shares issued
 Common stock $1.00 par value
 40,000,000 shares authorized;
 3,264,080 and 3,264,080 shares
 issued and outstanding 3,264 3,264
 Additional paid-in capital 22,795 22,795
 Retained earnings 15,761 13,775
 Total stockholders' equity 41,820 39,834
 Total liabilities and stockholders'
 equity $550,366 $507,990


METROPOLITAN FEDERAL SAVINGS AND LOAN ASSOCIATION AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited, in thousands, except per share data)
 Three months ended June 30, 1993 1992
 Interest income:
 Loans receivable $5,766 $6,688
 Mortgage-backed securities 2,980 1,019
 Investment securities 281 357
 Other 336 131
 Total 9,363 8,195
 Interest expense:
 Deposits 3,333 3,556
 Borrowings 2,080 1,201
 Total 5,413 4,757
 Net interest income 3,950 3,438
 Provision for loan losses 150 161
 Net interest income after provision
 for loan losses 3,800 3,277
 Other income:
 Collection of deferred asset --- 636
 Other 192 124
 Total 192 760
 Other expense:
 Compensation and fringe benefits 933 870
 Occupancy 286 251
 Savings Associations Insurance Fund
 Premiums 130 163
 Advertising 120 85
 Net loss (income) on real estate
 operations (325) 421
 Other 456 596
 Total 1,600 2,386
 Income before federal income taxes
 and extraordinary item and
 cumulative effect of change in
 accounting principle 2,392 1,651
 Federal income tax expense (benefit)
 Current 1,212 587
 Deferred (398) ---
 Total 814 587
 Net income before extraordinary item
 and cumulative effect of change in
 accounting principle 1,578 1,064
 Extraordinary item --- 258
 Net income before cumulative effect
 of change in accounting principle 1,578 1,322
 Cumulative effect of change in
 accounting principle 408 ---
 Net income $1,986 $1,322
 Net income per share before
 extraordinary item and cumulative
 effect of change in accounting
 principle $ 0.48 $ 0.33
 Extraordinary item per share 0.08
 Cumulative effect of change in
 accounting principle per share 0.13 ---
 Net income per share $ 0.61 $ 0.41
 Weighted average number of
 shares outstanding 3,264,080 3,255,583
 METROPOLITAN FEDERAL SAVINGS AND LOAN ASSOCIATION AND SUBSIDIARY
 ADDITIONAL INFORMATION
 (Unaudited, in thousands, except per share data)
 June 30, March 31, Dec. 31, Sept. 30, June 30,
 1993 1993 1992 1992 1992
 Stockholders'
 equity per
 share $12.81 $12.20 $11.70 $11.22 $10.80
 Stockholders'
 equity to
 total assets
 (pct) 7.60 7.84 7.80 7.60 8.03
 Regulatory capital
 ratios:
 Tangible (pct)7.51 7.84 7.79 7.59 8.02
 Core (pct) 7.51 7.84 7.79 7.59 8.02
 Risk-based
 (pct) 14.60 14.06 14.37 12.94 13.40
 Non-accrual
 loans $ 2,600 $ 6,394 $11,884 $ 8,004 $ 8,758
 Loan loss
 reserves $ 5,783 $ 5,632 $ 5,960 $ 6,029 $ 5,825
 Three months ended June 30, 1993 1992
 Yield on interest-earning assets (pct) 7.33 8.50
 Rate on interest-bearing
 liabilities (pct) 4.44 5.23
 Net interest margin (pct) 2.96 3.41
 Return on average equity before
 extraordinary or non-recurring
 items (pct) 15.52 12.27
 Return on average assets before
 extraordinary or non-recurring
 items (pct) 1.18 1.05
 -0- 7/21/93
 /CONTACT: Suzanne Tessaro of Metropolitan Federal Savings and Loan Association of Seattle, 206-654-7826/
 (MSEA)


CO: Metropolitan Federal Savings and Loan Association of Seattle ST: Washington IN: FIN SU: ERN

SB-AL -- SE006 -- 4202 07/21/93 18:02 EDT
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