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VIRGINIA BEACH FEDERAL ANNOUNCES CONSOLIDATED EARNINGS FOR THE THIRD QUARTER OF 1992 AND REGULAR QUARTERLY DIVIDEND

 VIRGINIA BEACH FEDERAL ANNOUNCES CONSOLIDATED EARNINGS
 FOR THE THIRD QUARTER OF 1992 AND REGULAR QUARTERLY DIVIDEND
 VIRGINIA BEACH, Va., Oct. 29 /PRNewswire/ -- Virginia Beach Federal Financial Corporation (NASDAQ-NMS: VABF) today reported consolidated net income of $884,000, or $0.18 per share, for the third quarter of 1992, compared to $710,000, or $0.14 per share, during the same period in 1991. Total assets at Sept. 30, 1992, were $683,408,000.
 Net income for the first nine months of 1992 was $2,187,000, or $0.44 per share, compared to $4,206,000, or $0.84 per share, in 1991. The decrease in earnings is mainly attributable to the $7,590,000 in gains on the sales of Federal Home Loan Mortgage Corporation ("Freddie Mac") common stock during the first quarter of 1991; the bank sold its remaining shares in Freddie Mac in the fourth quarter of 1991.
 Net interest income before provision for loan losses during the quarter improved to $3,865,000 as compared to $3,314,000 during the second quarter of 1992, and $2,823,000 during the third quarter of 1991. Year to date net interest income before provision for loan losses increased 24 percent to $10,066,000 in 1992 compared to $8,122,000 during the first nine months of 1991. "The increased net interest margin is due to the combined effects of increased earning assets and the continued lowering of our cost of deposits as higher coupon certificates of deposit mature and are renewed at lower rates," noted Dennis R. Stewart, executive vice president and chief financial officer.
 Non-interest income, excluding gains on the sales of Freddie Mac common stock, increased to $2,134,000 for the quarter compared to $1,254,000 for the third quarter of 1991. Year to date non-interest income, exclusive of Freddie Mac gains, was $5,676,000 in 1992 compared to $2,783,000 in 1991. The increase is largely due to the combination of increased gains recognized on sales of loans by the bank's mortgage banking subsidiary, Beach Fed Mortgage Corp ("Beach Fed") and gains recognized on the sales of real estate, primarily parcels of land at the Jeremy Ranch, the bank's most significant REO property.
 Loan originations at Beach Fed during the third quarter grew to $105,000,000, bringing year-to-date originations to $192,594,000 as compared to $24,100,000 and $73,900,000, respectively, during the prior year periods. "Although the recent refinancing boom has played a role in our increase in loan origination volume this year, we are confident that with the expansion of our Newport News office, the opening of our Richmond office and the continued growth of our Wholesale Division, which was begun in the second quarter of 1992, any drop-off in the current refinancing activity will not adversely affect our future loan origination volume," noted Stewart. Also, the bank continues to build its loan servicing portfolio, having retained the servicing rights for $34,000,000 of loans sold during the quarter, bringing year-to-date retained servicing to $59,000,000. By early 1993, the bank anticipates it will be retaining the servicing rights on most of Beach Fed's loan originations.
 Non-performing assets, composed of real estate acquired in settlement of loans (REO) and loans which are 90 days or more delinquent, decreased to $24,970,000, or 3.6 percent of total assets, at quarter end as compared to $26,009,000, or 4.0 percent at June 30, 1992. In response to the Office of Thrift Supervision's proposed changes in the methodology for valuing collateral dependent loans and real estate owned, the bank added $450,000 to its REO reserves during the third quarter; there were no additions to the REO reserve during the first six months of 1992. Management of the bank expects the new regulation to be adopted and wants to ensure that the bank's REO reserves adequately reflect the effects of current regulatory initiatives.
 The bank's regulatory capital ratios, on both a current and fully phased-in basis, continue to significantly exceed the minimum requirements. The bank's core and tangible ratios were 5.8 percent as compared to a requirement of 3.0 percent and 1.5 percent, respectively, at the end of the quarter, and the risk-based ratio was 11.6 percent as compared to a current requirement of 7.2 percent.
 At its regularly scheduled meeting last week, the board of directors declared a regular quarterly dividend of $0.04 per share, payable Nov. 27, 1992, to stockholders of record on Nov. 13, 1992.
 Virginia Beach Federal Financial Corporation is the parent company of Virginia Beach Federal Savings Bank. The corporation has no other activities. The bank, headquartered in Virginia Beach, is a 57-year-old institution providing full financial services to customers in the Hampton Roads area of Virginia. Beach Fed Mortgage Corp, a wholly owned subsidiary of the bank, originates residential mortgage loans through its offices in Virginia Beach, Newport News and Richmond.
 -0- 10/29/92
 /CONTACT: Dennis R. Stewart of Virginia Beach Federal Financial Corporation, 804-428-9331/ CO: Virginia Beach Federal Financial Corporation ST: Virginia IN: FIN SU: ERN DIV


IH -- DC012 -- 6613 10/29/92 13:20 EST
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Publication:PR Newswire
Date:Oct 29, 1992
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