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[GREATER ATLANTIC FINANCIAL CORP. LETTERHEAD]
GREATER ATLANTIC FINANCIAL CORP.
10700 Parkridge Boulevard - Suite P50 - Reston, Virginia 20191
(703) 391-1300 - Fax: (703) 391-1506
NEWS RELEASE
DATE: OCTOBER 26, 2000 CONTACT: CARROLL E. AMOS
(703) 390-0340
GREATER ATLANTIC FINANCIAL
TO INCUR SPECIAL CHARGES IN SEPTEMBER 2000 QUARTER
Reston, Virginia - October 26, 2000 - Greater Atlantic Bank announced today that
the Company will incur special charges against earnings aggregating $2.1
million, or $.70 per share, from the settlement of a lawsuit against Greater
Atlantic Mortgage Corporation, the mortgage banking subsidiary of Greater
Atlantic Bank, the Bank and the Company, and the sale and reclassification by
the Bank of certain investment securities at a loss during the quarter ended
September 30, 2000.
In commenting on the charges, Carroll E. Amos, President and Chief Executive
Officer, stated that "the one-time charges will not have a material impact on
the future operations of the Company and Greater Atlantic Bank will remain well
capitalized." Continuing, Mr. Amos said: "The Bank elected to sell $19.3 million
of fixed-rate, low-yielding investment securities at a loss of $465,000 and
changed the classification on $13.8 million in investment securities from
available for sale to trading which resulted in a charge to earnings of
$389,000. Those securities were detrimental to our interest rate risk position
and had an adverse impact on our net interest margin. The proceeds from the sale
will be re-invested in substantially higher yielding loans and interest
sensitive investments which will improve future operations."
In commenting on the lawsuit Mr. Amos stated, "the Bank's wholly-owned mortgage
banking subsidiary will incur a $1.3 million charge for the settlement of a
$25.0 million lawsuit filed against the mortgage banking subsidiary, the Bank
and the Company. Taking into consideration the status of the litigation, its
progress over the past several months and the possibility that, no matter what
the outcome, the litigation would result in an appeal, with substantial
litigation fees, the Board determined that the most prudent avenue was to settle
the lawsuit rather than subject the Bank to the risk of an adverse judgment and
continuing legal fees." The suit was dismissed
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with prejudice and without an admission of liability.
Mr. Amos added, "We anticipate issuing our results for year ended September 30,
on November 9, 2000 upon completion of the year-end review by our accounting
firm."
Mr. Amos concluded by stating, "While we may also incur a loss for the December
2000 quarter, with the lawsuit behind us, the investment portfolio restructured
and the recent acquisition of Dominion Savings Bank, FSB, we are very optimistic
about future quarters."
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
THIS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
FEDERAL SECURITIES LAWS. THESE STATEMENTS ARE NOT HISTORICAL FACTS, BUT
STATEMENTS BASED ON THE COMPANY'S CURRENT EXPECTATIONS REGARDING ITS BUSINESS
STRATEGIES AND THEIR INTENDED RESULTS AND ITS FUTURE PERFORMANCE.
FORWARD-LOOKING STATEMENTS ARE PRECEDED BY TERMS SUCH AS "EXPECTS," "BELIEVES,"
"ANTICIPATES," "INTENDS" AND SIMILAR EXPRESSIONS.
FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE. NUMEROUS
RISKS AND UNCERTAINTIES COULD CAUSE OR CONTRIBUTE TO THE COMPANY'S ACTUAL
RESULTS, PERFORMANCE AND ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM THOSE
EXPRESSED OR IMPLIED BY THE FORWARD-LOOKING STATEMENTS. FACTORS THAT MAY CAUSE
OR CONTRIBUTE TO THESE DIFFERENCES INCLUDE, WITHOUT LIMITATION, GENERAL ECONOMIC
CONDITIONS, INCLUDING CHANGES IN MARKET INTEREST RATES AND CHANGES IN MONETARY
AND FISCAL POLICIES OF THE FEDERAL GOVERNMENT; LEGISLATIVE AND REGULATORY
CHANGES; THE COMPANY'S ABILITY TO REMEDY ANY COMPUTER MALFUNCTIONS THAT MAY
RESULT FROM THE ADVENT OF THE YEAR 2000; AND OTHER FACTORS DISCLOSED
PERIODICALLY IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION.
BECAUSE OF THE RISKS AND UNCERTAINTIES INHERENT IN FORWARD-LOOKING STATEMENTS,
READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THEM, WHETHER INCLUDED IN
THIS REPORT OR MADE ELSEWHERE FROM TIME TO TIME BY THE COMPANY OR ON ITS BEHALF.
THE COMPANY ASSUMES NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS.
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