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VIRGINIA BEACH FEDERAL FINANCIAL CORPORATION ANNOUNCES RESULTS

 VIRGINIA BEACH FEDERAL FINANCIAL CORPORATION ANNOUNCES RESULTS
 VIRGINIA BEACH, Va., Feb. 7 /PRNewswire/ -- Virginia Beach Federal Financial Corporation (NASDAQ-NMS: VABF), the parent of Virginia Beach Federal Savings Bank, today reported consolidated net income of $4,846,000 or $0.97 per share for 1991 as compared to $689,000 or $0.14 per share for 1990. Total assets were $666,818,000 at year end 1991 versus $705,818,000 a year earlier.
 The increase in net income results from the combined effects of higher net interest income, gains on sale of the Bank's remaining shares of Federal Home Loan Mortgage (Freddie Mac) common stock, reductions in real estate owned, and increased activity by the Bank's mortgage banking subsidiary.
 Net interest income before provision for loan losses for 1991 was $10,762,000 as compared to $7,244,000 for 1990. The increase is largely due to the decline in interest rates which occurred throughout 1991, particularly short-term interest rates, enabling the Bank to reduce its deposit and other borrowing costs.
 Gains on sale of Freddie Mac common stock were $8,953,000 in 1991 versus $3,974,000 in 1990 as the Bank ended this chapter in its history by selling the remaining 581,312 shares it had held in its portfolio since 1989.
 Non-performing assets, composed of real estate acquired through foreclosure (REO) and delinquent loans, totaled $25,511,000 or 3.8 percent of total assets at Dec. 31, 1991 as compared to $36,167,000 and 5.1 percent a year earlier. This decrease is mainly attributable to aggressive marketing and sales of the REO during 1991, which produced gross REO sales of $15,125,000. "The reduction in non-performing assets continues to be the top priority of the bank as we enter 1992," noted Dennis R. Stewart, executive vice president and chief financial officer. During 1991 the bank expensed $1,450,000 and $3,050,000 as provisions for losses on loans and REO as compared to $2,336,000 and $533,000 respectively, during 1990.
 Operating expenses before REO provisions totaled $11,213,000 or 1.6 percent of average assets during 1991 as compared to $10,341,000 or 1.3 percent during 1990. The increase in operating expenses during 1991 is mainly due to additional occupancy cost incurred as a result of the Bank's move into new headquarters in early 1991. Increases also occurred in salaries and commissions paid by the bank's mortgage banking subsidiary, Beach Fed Mortgage Corp., which also produced gains on sales of loans of $2,007,000 during 1991 vs. $1,147,000 during 1990. Beach Fed's originations increased to $106,115,000 in 1991 as compared to $59,679,000 in 1990. Mortgage banking activities accelerated in accordance with Beach Fed's efforts to expand its presence in the Hampton Roads area of Virginia. Refinancings did not play a significant role in 1991 operating results but are expected to become more prominent in 1992.
 The bank's regulatory capital ratios, on both a current and fully phased-in basis, continue to exceed the minimum requirements at year end. The bank's current core and tangible capital ratios were each 6.0 percent as compared to a 3 percent requirement, while the risk-based ratio was 11.5 percent as compared to a 7.2 percent requirement.
 Virginia Beach Federal Financial Corporation is the parent company of Virginia Beach Federal Savings Bank. The Financial Corporation has no other activities. The Bank, headquartered in Virginia Beach, Va., is a 56-year-old institution providing full financial services to customers in the Hampton Roads area of Virginia.
 -0- 2/7/92
 /CONTACT: Dennis R. Stewart, Virginia Beach Federal Financial Corporation, 804-428-9331/
 (VABF) CO: Virginia Beach Federal Financial Corporation; Virginia Beach
 Federal Savings Bank ST: Virginia IN: FIN SU: ERN


DF -- CH009 -- 7827 02/07/92 13:44 EST
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Date:Feb 7, 1992
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