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PROGRESS FINANCIAL CORP. REPORTS SECOND QUARTER RESULTS

 PROGRESS FINANCIAL CORP. REPORTS SECOND QUARTER RESULTS
 PLYMOUTH MEETING, Pa., Aug. 7 /PRNewswire/ -- Progress Financial


Corporation (NASDAQ-NMS: PFNC) (the company), whose primary subsidiary is Progress Federal Savings Bank (the bank), announced a profit for the quarter ended June 30, 1992, of $350,000 or $.35 per share.
 This compares to a $9.6 million loss or ($9.52) per share for the second quarter of 1991. For the six months ended June 30, 1992, the bank recorded net income of $548,000 in comparison with a net loss of $9.7 million for the comparable 1991 period.
 W. Kirk Wycoff, president and chief executive officer, stated, "We are encouraged to report positive results for the second quarter of 1992 in light of the provision for real estate owned recorded during the period. The bank is benefiting from lower market rates of interest which increased net interest income for the quarter as well as from net gains on the disposition of $7.4 million in real estate owned and sale of $5.6 million of fixed rate mortgage loans that were originated and securitized by the bank in 1992."
 Total non-performing assets, which includes non-performing loans and real estate owned (REO), net, decreased to $46.3 million at June 30, 1992, down $4.3 million from $50.6 million at March 31, 1992, and $348,000 higher than the $46.0 million reported at June 30, 1991. Non- performing assets at June 30, 1992, includes $36.9 million of REO, of which $14.6 million represents loans classified as insubstance foreclosures. Wycoff noted, "The bank's level of non-performing assets is much higher than desired. The resolution of these problem assets continues to be our highest priority. However, due to the poor economic picture, many viable commercial and investment properties cannot be sold for their true value. Until these properties are sold, they will continue to negatively impact profitability."
 Loan and REP charge-offs (net of recoveries) for the three months ended June 30, 1992, totalled $1.9 million and $175,000, respectively, compared to $6.8 million and $673,000, respectively, for the same period of 1991. At June 30, 1992, the allowance for possible loan losses and REP totalled $3.6 million and $854,000, respectively, compared to $5.4 million and $612,000, respectively, at March 31, 1992, and $6.9 million and $1.3 million, respectively, at June 30, 1991.
 The Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) have recently conducted a joint examination of the bank. The preliminary results of this examination indicated that the bank will need to increase its general allowance for possible losses on loans and REO due to continuing economic slowness in the region and the impact this continues to have on real estate values. Wycoff stated, "In order to provide for the continued slowness in the economy, the bank will provide for additional general reserves for non-performing loans and real estate owned in each of the next two quarters. The exact amount to be recorded in each quarter may be increased or decreased based upon our ability to dispose of or resolve certain troubled assets. The continued slowness in the economy, among other things, may cause this provision to be significant, which in turn will make it difficult for the bank to be profitable between now and year end."
 Total loans, net decreased to $174.3 million at June 30, 1992, from $179.3 million at March 31, 1992, and $240.5 million at June 30, 1991, while mortgage-backed securities increased from $68.9 million and $306,000 at March 31, 1992, and June 30, 1991, respectively, to $74.5 million at June 30, 1992.
 Net interest income before provision for possible loan losses was $2.1 million for the three months ended June 30, 1992, compared to $1.9 million for the three months ended March 31, 1992, and $2.3 million for the same period in 1991.
 Total other income increased to $1.1 million for the three months ended June 30, 1992, in comparison with $774,000 and $51,000 for the three months ended March 31, 1992, and June 30, 1991, respectively. Total other income for the second quarter of 1992 included $189,000 in net gains on the sale of fixed rate residential mortgages that were originated and securitized by the bank, and $297,000 in net income on property sold.
 Total other expenses increased to $2.8 million for the three months ended June 30, 1992, from $2.5 million for the three months ended March 31, 1992. The increase in other expense for the three months ended June 30, 1992, over the three months ended March 31, 1992, is due to a $424,000 increase in provision for real estate owned. Other expenses for the three months ended June 30, 1992, included $355,000 for professional services, of which $236,000 were legal fees related to ongoing collection efforts of non-performing assets.
 At June 30, 1992, the bank's tangible and core capital was 2.01 percent, which is in excess of the tangible capital requirement of 1.5 percent but below the core capital requirement of 3 percent. The bank's risk-based capital ratio was 4.04 percent, which is below the current 7.2 percent requirement. The bank is currently in compliance with the quarter end capital targets in its Capital Plan as approved by the OTS in April 1992. However, continued compliance with the conditions of the Capital Directive may be difficult to achieve in light of the additional provision for possible losses on loans and REO that will be recorded over the next two quarters. Wycoff added, "A series of strategic actions are already underway that, if successful, can contribute of offsetting the impact of reserve additions in each of the next two quarters. However, no assurance can be given that compliance with the Capital Plan will be achieved." If the bank fails to continue to comply with the terms and conditions of its Capital Plan, the bank is subject to the possibility of various actions by the OTS or the FDIC, including enforcement actions and an increased individual minimum capital requirement. Additionally, effective no later than Dec. 19, 1992, the FDIC Improvement Act of 1991 (the act) will require the OTS to take certain supervisory actions when insured institutions fall within one of five enumerated capital categories. Under the act, the bank would be classified as a "significantly undercapitalized" institution and, as such, be subject to potential significant operating restrictions as well as increased capital requirements. If the bank's capital falls below 2 percent, it would be classified as a "critically undercapitalized" institution and become subject to possible further regulatory action.
 Progress Financial Corporation is a unitary thrift holding company headquartered in Plymouth Meeting. The business of the company consists primarily of the operation of Progress Federal Savings Bank, a federally chartered stock savings bank which conducts community banking business through eight full service offices in Bridgeport, Plymouth Meeting, Conshohocken, Sandy Hill, Jeffersonville, King of Prussia, Norristown and one in the Andorra section of Philadelphia. The company's stock is traded over-the-counter on the NASDAQ National Market System under the symbol "PFNC."
 PROGRESS FINANCIAL CORPORATION
 Consolidated Financial Data
 (Dollar amounts in thousands, except per-share data)
 Financial Condition:
 June 30 1992 1991
 Investment securities $3,526 $11,695
 Mortgage-backed securities 74,473 306
 Loans, net 174,272 240,512
 Real estate owned, net 36,932 34,036
 Total assets 305,122 311,383
 Deposits 259,860 287,054
 Borrowings 34,829 11,500
 Stockholders' equity 6,147 6,184
 Results of Operations:
 Periods ended Three months Six months
 June 30 1992 1991 1992 1991
 Interest income $5,589 $6,788 $11,412 $14,448
 Interest expense 3,475 4,503 7,367 9,533
 Net interest income 2,114 2,285 4,045 4,915
 Provision for possible loan losses 50 9,482 100 9,865
 Net interest income (expense) after
 provision for possible loan losses 2,064 (7,197) 3,945 (4,950)
 Other income:
 Mortgage origination and servicing 68 111 116 211
 Service charges on deposits 158 138 306 276
 Gain on sales of loans and
 mortgage-backed securities 189 --- 436 ---
 Income on property sold, net 297 14 516 26
 Income from affiliates
 and joint ventures 169 (318) 247 (316)
 Other 200 106 234 209
 Total other income 1,081 51 1,855 406
 Other expense:
 Salaries and employee benefits 995 995 2,000 2,296
 Occupancy 276 291 566 578
 Data processing 143 144 293 301
 Furniture, fixtures and equipment 119 138 235 298
 Insurance premiums 198 228 394 425
 Provision for real estate owned 424 1,935 424 1,935
 Loan and real estate owned
 expenses, net 23 124 166 307
 Professional services 355 220 704 377
 Other 254 198 462 422
 Total other expense 2,787 4,273 5,244 6,939
 Income (loss) before income taxes 358 (11,419) 556 (11,483)
 Income tax expense (benefit) 8 (1,801) 8 (1,823)
 Net income (loss) 350 (9,618) 548 (9,660)
 Per-share data:
 Net income (loss) $.35 $(9.52) $.54 $(9.56)
 Book value 6.09 6.12 6.09 6.12
 Operating Data:
 Return on average assets (pct.) .11 (3.04) .18 (3.04)
 Return on average
 stockholders' equity (pct.) 5.75 (61.95) 9.42 (61.69)
 Average stockholders' equity
 to average assets (pct.) 1.97 4.91 1.88 4.93
 Non-performing assets as a
 percentage of total assets 15.18 14.77 15.18 14.77
 Interest rate spread (pct.) 4.07 3.58 3.93 3.74
 /delval/
 -0- 8/7/92
 /CONTACT: W. Kirk Wycoff, president of chief executive officer, ext. 200; Gerald P. Plush, senior vp and chief financial officer, ext. 203, or Renee M. Ebersole, ext. 312 all of Progress Financial, 215-825-8800/
 (PFNC) CO: Progress Financial Corporation ST: Pennsylvania IN: FIN SU: ERN


MJ-JS -- PH023 -- 8131 08/07/92 16:10 EDT
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Date:Aug 7, 1992
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