Approved Financial Corp. Announces Results for the Second Quarter of 1999

Business Wire, August 9, 1999

The Company received fee income on brokered loans of $1.7 and $3.5 million during the three and six-month periods ended June 30, 1999, an increase of 70% and 106% from $1.0 and $1.7 in the same periods in 1998. These fees equate to an average of 4% of the dollar volume of 1999 brokered loans, of which approximately one half represent conforming loans.

EXPENSE REDUCTION

Total expenses decreased 24% and 13% for the three and six months ended June 30, 1999 compared to 1998. The compensation and related benefits expense decreased 24% and 22%, loan production expense that includes fees paid to mortgage brokers for services rendered declined by 51% and 45% during the three and six months ended June 30, 1999 compared to 1998. These reductions are the result of the Company's expense reduction program implemented over the past year. These reductions were offset by a 78% increase in the provision for loan losses during the six-month period ended June 30, 1999 compared to 1998.

CORPORATE OUTLOOK

Allen Wykle, Chairman, President and CEO remarks, "Management continues to focus on the principal goal of positioning the Company in a manner that enables us to restore sustainable profitability. Our staff has worked diligently over the past year to reduce expenses and expand operating efficiencies. Significant progress has occurred in both areas and we expect to experience additional benefits from our recent investments in technology." He continued, "Today our most obvious challenge is the procurement of new loan sale strategies to enhance the profitability of our current business. This goal is actively being addressed in a prudent manner. Furthermore, with an entrepreneurial spirit, we are exploring new sources of revenue and innovative opportunities for generating incremental income."

THE COMPANY

Approved Financial Corp., chartered as a Virginia financial institution in 1952, and its wholly owned subsidiary, Approved Federal Savings Bank, a federally chartered savings bank, are headquartered in Virginia Beach, Virginia. The Company's primary business is the origination, service and sale of non-conforming and conforming mortgage loans secured primarily by first and second liens on one-to-four family residential properties. The Company originates loans on a retail basis through its wholly owned subsidiaries, Approved Federal Savings Bank, Approved Residential Mortgage and MOFC d/b/a ConsumerOne Financial and originates broker-referred loans through its subsidiaries, Approved Residential Mortgage and Approved Federal Savings Bank. The Company's common stock currently trades on the Bulletin Board under the symbol APFN.

DISCLOSURE UNDER PRIVATE SECURITIES LITIGATION ACT OF 1995

Certain statements in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 concerning items such as Approved's future loan production volume, profits from future loan production and loan sales, ability to profitably implement a restructuring, expense reduction and revenue expansion plan, ability to profitably develop a conforming loan department, ability to develop new sources of revenues and any other mentioned business strategy concerning the sustainable profitability of any current or future operation of the Company are forward-looking statements. There are a number of important factors that could cause the actual results of Approved Financial Corp. to differ materially from those indicated in such forward-looking statements. Those factors include, but are not limited to the ability of the Company to retain management personnel with the appropriate skills to implement restructuring, expense reduction and revenue expansion plans, management's ability to develop new origination centers and other sources of loan volume, any changes in residential real estate values, changes in industry competition, general economic conditions, changes in interest rates, changes in the demand for non-conforming or conforming mortgage loans, availability of capital resources and liquidity, changes in loan prepayment speeds, delinquency, default and loss rates, changes in regulatory issues concerning financial institutions or federally chartered savings banks, changes in accounting standards effecting the Company's financial statements, any changes which influence all markets for profitable sales of all types of mortgage loans and other risk factors disclosed in the Company's filings with the Securities and Exchange Commission on Form 10K and Form 10Q. -0-