Progress Financial Corporation Announces First Quarter Net Income of $425,000 Or $.07 Per Share and Operating Earnings of $1.2 Million or $.21 Per Share

Apr 18, 2001, 01:00 ET from Progress Financial Corporation

    BLUE BELL, Pa., April 18 /PRNewswire/ --
 Progress Financial Corporation (Nasdaq:   PFNC)(the "Company") today reported
 first quarter 2001 earnings of $425,000, or diluted earnings per share of
 $.07.  Operating earnings, which excludes gains (losses) on sales of
 securities, equity in unconsolidated entities, client warrant income,
 additional loan loss provisions, income from discontinued operations and
 conversion costs, net of tax, for the first quarter of 2001 were $1.2 million,
 or diluted earnings per share of $.21, compared to $853,000, or diluted
 earnings per share of $.14 in the first quarter of 2000.
     Net income for the three months ended March 31, 2001 totaled $425,000, or
 diluted earnings per share of $.07, compared to net income of $1.5 million, or
 diluted earnings per share of $.26, for the three months ended March 31, 2000.
 Results for the three months ended March 31, 2001 included losses of
 $2.0 million from client warrants, due to the previously announced permanent
 impairment of U.S. Interactive, Inc., compared to gains of $2.6 million for
 the comparable period in 2000, which were primarily due to market appreciation
 on these same warrants recorded in accordance with FASB 133.  The loss was
 partially offset by a $1.3 million gain on sales of securities in the first
 quarter of 2001 compared to a $112,000 loss in the first quarter of 2000.
     Commenting on the first quarter results, W. Kirk Wycoff, President and
 CEO, stated, "Although the quarter included a number of non-operating gains
 and losses, the Company increased its operating earnings by nearly 45% as it
 expanded its franchise by opening new offices in Warrington and Bensalem,
 Pennsylvania, both in Bucks County.  We are especially pleased with the 23
 percent growth in fee income primarily due to an increase in management fees
 generated by the Company's subsidiary, Progress Capital Management, Inc.,
 which manages the mezzanine debt and venture capital funds, and consulting
 fees generated by the Company's subsidiary, KMR Management, Inc., which
 provides consulting services for commercial clients.  We are also pleased with
 the commissions generated by our wealth management group, Progress Financial
 Resources, Inc., during a difficult period of market volatility."
     Average earning assets for the first quarter of 2001 were $829.5 million
 compared to $721.9 million for the same period in 2000.  The growth in average
 assets relates primarily to purchases of mortgage-backed securities and higher
 commercial loan production funded by higher levels of deposits.  Consequently,
 tax-equivalent interest income for the first quarter of 2001 increased
 $2.1 million, or 14%, over the same period in 2000.  Tax-equivalent net
 interest income increased $551,000 to $8.2 million, or by 7%, compared to the
 first quarter of 2000 level of $7.7 million.  The net interest margin was
 4.03% compared to 4.28% for the same period in 2000 and 3.99% for the fourth
 quarter of 2000.  This margin stability in an environment of sharply declining
 rates evidences the Company's commitment to managing interest rate risk.
     Loans and leases outstanding totaled $556.5 million at March 31, 2001
 compared to $543.1 million at December 31, 2000.  This increase was primarily
 due to increases in commercial business, construction and commercial real
 estate loans.  These increases were partially offset by sales in lease
 receivables.  The Company reported non-performing assets of $7.4 million at
 March 31, 2001 compared to $5.8 million at December 31, 2000.  The increase in
 non-performing assets is primarily the result of additional non-accural leases
 amounting to $1.2 million.  The Company's non-performing assets to total
 assets ratio at March 31, 2001 was .81% compared to .63% at December 31,?2000.
 The non-performing loans to assets ratio was .66% at March 31, 2001 compared
 to .44% at December 31, 2000.
     The ratio of the allowance for loan and lease losses to total loans and
 leases has increased to 1.39% at March 31, 2001 compared to 1.36% at
 December 31, 2000.
     Non-interest income for the quarter ended March 31, 2001 amounted to
 $3.1 million, compared to $4.9 million for the same period in 2000.  During
 the quarter, the Company recognized losses of $2.0 million from client warrant
 compared to gains of $2.6 million in the same period of 2000.  Loss in the
 unconsolidated entities was $27,000 during the quarter ended March 31, 2001
 compared with losses of $955,000 in the 2000 quarter.  The 2000 losses in the
 unconsolidated entities primarily relate to the Ben Franklin mezzanine debt
 fund and NewSpring Ventures capital fund.  Securities gains of $1.3 million
 were realized during the first quarter of 2001 compared to losses of $112,000
 for the same quarter of 2000.  Securities gains during 2001 included a
 $708,000 gain on the disposition of the Company's investment in NewSeasons
 Assisted Living Communities Series B and C stock as previously reported.  Fee
 income increased $650,000 primarily due to management fees generated by the
 Company's subsidiary Progress Capital Management, Inc., and consulting fees
 generated by the Company's subsidiary KMR Management, Inc.
     Total non-interest expense was $9.5 million for the quarter ended March
 31, 2001 compared to $9.2 million for the quarter ended March 31, 2000.
 Excluding non-recurring expense of $124,000 in 2000 related to conversion
 costs, non-interest expense increased $450,000.  This increase was primarily
 due to increases in salaries and employee benefits of $206,000 as a result of
 additional employees to staff new bank branches, the acquisition of KMR
 Management, Inc., and from other new positions established within the Company.
 Professional services expense increased $200,000 mainly due to the business
 activities of KMR.  Capital securities expense increased $162,000 due to the
 issuance of $6.0 million of 11.445% capital securities in July 2000.
     Total assets decreased slightly to $904.9 million at March 31, 2001 from
 $914.2 million at December 31, 2000.  Total deposits decreased to
 $595.2 million at March 31, 2001 from $617.5 million at December 31, 2000,
 primarily due to the maturity of wholesale brokered certificates of deposit of
 $15.0 million.
 
     Progress Financial Corporation is a unitary thrift holding company
 headquartered in Blue Bell, Pennsylvania.  The business of the Company
 consists primarily of the operation of Progress Bank, which serves businesses
 and consumers through eighteen full service offices.  The Company also offers
 a diversified array of financial services including equipment leasing through
 Progress Leasing Company, with offices in Blue Bell, Pennsylvania, and
 financial planning services and investments through Progress Financial
 Resources, Inc., headquartered in Philadelphia, Pennsylvania; and asset based
 lending through Progress Business Credit.  In addition, the Company also
 conducts commercial mortgage banking and brokerage services through Progress
 Realty Advisors, Inc. with locations in Blue Bell, Pennsylvania, and
 Woodbridge, New Jersey.  The Company also receives fees for construction and
 development of activities through Progress Development Corporation; fees for
 venture capital management services provided by Progress Capital Management,
 Inc.; and financial and operational management consulting services for
 commercial clients through KMR Management, Inc. located in Willow Grove,
 Pennsylvania.  The Company's common stock is traded on The Nasdaq Stock
 Market(SM) under the Symbol "PFNC".
 
                            FINANCIAL DATA ATTACHED
 
                         Progress Financial Corporation
                 Consolidated Statements of Financial Condition
                             (Dollars in Thousands)
 
                                                    March 31,     December 31,
                                                      2001            2000
     Assets:                                       (Unaudited)      (Audited)
     Cash and due from banks:
       Non-interest bearing                           $14,009        $25,360
       Interest bearing                                16,548         59,637
     Investments and mortgage-backed securities
       Available for sale at fair value
      (amortized cost: $246,970 and $207,795)         247,257        205,166
     Held to maturity at amortized cost
      (fair value: $37,350 and $40,225)                37,278         41,940
     Loans and leases, net
      (net of reserve: $7,708 and $7,407)             548,749        535,712
     Premises and equipment                            19,491         18,343
     Other assets                                      21,575         28,091
       Total assets                                  $904,907       $914,249
 
     Liabilities and Shareholders' Equity
     Liabilities:
     Deposits                                        $595,172       $617,543
     Short-term borrowings                             67,738         79,360
     Other liabilities                                 20,695         31,954
     Long-term Debt:
       Federal Home Loan Bank advances                127,000        102,000
       Other debt                                      19,000         10,000
     Subordinated Debt                                  3,000          3,000
       Total liabilities                              832,605        843,857
     Corporation-obligated mandatorily
      redeemable capital securities of subsidiary
      trust holding solely junior subordinated
      debentures of the Corporation                    20,239         20,232
 
     Commitments and contingencies                          -              -
 
     Shareholders' equity:
     Serial preferred - 1,000,000 shares
      authorized but unissued                               -              -
     Junior participating preferred stock
      - $.01 par value - 1,010 shares
      authorized but unissued                               -              -
     Common stock, $1 par value; 12,000,000
      shares authorized; 5,834,000 and 5,814,000
      shares issued, including treasury shares
      of 185,000 and 125,000                            5,834          5,814
     Other shareholders' equity, net                   46,099         46,145
     Net accumulated other comprehensive income (loss)    130         (1,799)
       Total shareholders' equity                      52,063         50,160
       Total liabilities, Corporation-obligated
        mandatorily redeemable capital securities
        of subsidiary trust holding and shareholders'
        equity                                       $904,907       $914,249
 
 
                         Progress Financial Corporation
                     Consolidated Statements of Operations
                 (Dollars in Thousands, except per share data)
 
                                                        Three Months Ended
                                                             March 31,
                                                       2001           2000
                                                    (Unaudited)    (Unaudited)
     Interest income:
       Loans and leases, including fees               $12,675        $11,945
       Mortgage-backed securities                       3,277          2,064
       Investment securities                              990            963
       Other                                              356            239
         Total interest income                         17,298         15,211
 
     Interest expense:
       Deposits                                         6,666          5,209
       Short-term borrowings                              647            888
       Long-term borrowings                             1,866          1,518
         Total interest expense                         9,179          7,615
 
     Net interest income                                8,119          7,596
     Provision for loan and lease losses                1,047          1,058
         Net interest income after provision
          for loan and lease losses                     7,072          6,538
 
     Non-interest income:
       Service charges on deposits                        585            542
       Lease financing fees                               277            290
       Mutual fund, annuity and insurance commissions     800            879
       Loan brokerage and advisory fees                   223            521
       Private equity fund management fees                614            374
       Gain (loss) from sale of securities              1,258           (112)
       Client warrant income                           (1,959)         2,600
       Equity (loss) in unconsolidated entities           (27)          (955)
       Fees and other                                   1,287            741
 
         Total non-interest income                      3,058          4,880
 
 
     Non-interest expense:
       Salaries and employee benefits                   4,990          4,784
       Occupancy                                          613            595
       Data processing                                    215            405
       Furniture, fixtures and equipment                  546            468
       Professional services                              815            615
       Capital securities expense                         561            399
       Other                                            1,780          1,928
 
         Total non-interest expense                     9,520          9,194
 
 
     Income from continuing operations
      before income taxes                                 610          2,224
     Income tax expense                                   185            739
 
     Income from continuing operations                    425          1,485
     Income from discontinued operations, net of tax        -             53
 
     Net income                                          $425         $1,538
 
 
     Basic income from continuing operations
      per common share                                   $.07           $.25
     Diluted income from continuing operations
      per common share                                   $.07           $.25
     Basic net income per common share                   $.07           $.26
     Diluted net income per common share                 $.07           $.26
 
     Dividends per common share                          $.06           $.05
 
     Basic average common shares outstanding        5,684,940      5,846,695
 
     Diluted average common shares outstanding      5,829,134      6,048,070
 
 
                         Progress Financial Corporation
                               Supplemental Data
 
                                        Three Months Ended  Three Months Ended
                                            March 31,            December 31,
                                          2001     2000               2000
 
     Profitability Measures:
     Return on average assets              .20%     .79%               .63%
     Return on average equity             3.31    12.81              11.41
     Net interest spread (FTE) (2)        3.24     3.65               3.27
     Net interest margin (FTE) (2)        4.03     4.28               3.99
     Efficiency ratio                    67.60    69.01              74.37
     Diluted net income
      per common share (1)                $.07     $.26               $.24
 
     Selected Loan Data:
     Non-performing assets              $7,358   $4,139             $5,784
     Ratio of non-performing assets
      to total assets                      .81%     .50%               .63%
     Ratio of allowance for
      loan and lease losses
      to total loan and
      leases receivable                   1.39     1.04               1.36
     Ratio of allowance for
      loan and lease losses
     to non-performing loan
      and leases receivable             128.42   135.73             183.61
     Loan delinquency ratio               2.39     2.18               2.25
     Ratio of loans and leases
      to deposits                        93.50    98.73              87.95
 
     Selected Equity Data:
     Book value per share (1)            $9.22    $7.98              $8.82
     Tangible book value per share (1)    8.76     6.98               8.28
     Dividends per common share (1)        .06      .05                .06
     Average equity to average assets     5.89%    6.20%              5.56%
     Tier 1 risk-based capital ratio
      (Bank)                             10.61     9.05               9.79
     Total risk-based capital ratio
      (Bank)                             11.86    10.06              11.04
     Tier 1 leverage ratio (Bank)         6.95     6.22               6.46
 
     Selected Average Balances:
       Loans, gross                   $546,195 $521,526           $565,995
       Earning assets                  829,546  721,929            835,202
       Total assets                    883,552  778,755            894,731
       Deposits                        610,972  526,196            604,321
       Equity                           52,027   48,298             49,723
 
     (1) Per share amounts have been restated to reflect the 5% stock dividend
 distributed to shareholders on August 31, 2000.
     (2) FTE represents a fully tax equivalent basis.
 
 
                         Progress Financial Corporation
                             Supplemental Balances
 
     Period-End Balances At:           March 31,      December 31,   % Change
                                          2001            2000
 
     Loans and Leases, Net:
     Commercial business                $185,974       $175,972         5.7%
     Commercial real estate              184,957        178,874        3.4
     Construction, net of loans
      in process                          68,909         60,172       14.5
     Single family residential
      real estate                         32,861         34,676       (5.2)
     Consumer                             37,373         37,242         .4
     Leases receivable                    46,383         56,183      (17.4)
         Total loans and leases          556,457        543,119        2.5
     Allowance for loan and lease
      losses                              (7,708)        (7,407)       4.1
         Loans and leases, net          $548,749       $535,712        2.4%
 
     Deposits:
     Non-interest-bearing
      demand deposits                    $67,105        $88,356      (24.1)%
     NOW and SuperNow                    112,062        104,047        7.7
     Money Market                         39,382         37,157        6.0
     Passbook and Statement Savings       28,327         27,337        3.6
     Time deposits                       348,296        360,646       (3.4)
         Total Deposits                 $595,172       $617,543       (3.6)%
 
 

SOURCE Progress Financial Corporation
    BLUE BELL, Pa., April 18 /PRNewswire/ --
 Progress Financial Corporation (Nasdaq:   PFNC)(the "Company") today reported
 first quarter 2001 earnings of $425,000, or diluted earnings per share of
 $.07.  Operating earnings, which excludes gains (losses) on sales of
 securities, equity in unconsolidated entities, client warrant income,
 additional loan loss provisions, income from discontinued operations and
 conversion costs, net of tax, for the first quarter of 2001 were $1.2 million,
 or diluted earnings per share of $.21, compared to $853,000, or diluted
 earnings per share of $.14 in the first quarter of 2000.
     Net income for the three months ended March 31, 2001 totaled $425,000, or
 diluted earnings per share of $.07, compared to net income of $1.5 million, or
 diluted earnings per share of $.26, for the three months ended March 31, 2000.
 Results for the three months ended March 31, 2001 included losses of
 $2.0 million from client warrants, due to the previously announced permanent
 impairment of U.S. Interactive, Inc., compared to gains of $2.6 million for
 the comparable period in 2000, which were primarily due to market appreciation
 on these same warrants recorded in accordance with FASB 133.  The loss was
 partially offset by a $1.3 million gain on sales of securities in the first
 quarter of 2001 compared to a $112,000 loss in the first quarter of 2000.
     Commenting on the first quarter results, W. Kirk Wycoff, President and
 CEO, stated, "Although the quarter included a number of non-operating gains
 and losses, the Company increased its operating earnings by nearly 45% as it
 expanded its franchise by opening new offices in Warrington and Bensalem,
 Pennsylvania, both in Bucks County.  We are especially pleased with the 23
 percent growth in fee income primarily due to an increase in management fees
 generated by the Company's subsidiary, Progress Capital Management, Inc.,
 which manages the mezzanine debt and venture capital funds, and consulting
 fees generated by the Company's subsidiary, KMR Management, Inc., which
 provides consulting services for commercial clients.  We are also pleased with
 the commissions generated by our wealth management group, Progress Financial
 Resources, Inc., during a difficult period of market volatility."
     Average earning assets for the first quarter of 2001 were $829.5 million
 compared to $721.9 million for the same period in 2000.  The growth in average
 assets relates primarily to purchases of mortgage-backed securities and higher
 commercial loan production funded by higher levels of deposits.  Consequently,
 tax-equivalent interest income for the first quarter of 2001 increased
 $2.1 million, or 14%, over the same period in 2000.  Tax-equivalent net
 interest income increased $551,000 to $8.2 million, or by 7%, compared to the
 first quarter of 2000 level of $7.7 million.  The net interest margin was
 4.03% compared to 4.28% for the same period in 2000 and 3.99% for the fourth
 quarter of 2000.  This margin stability in an environment of sharply declining
 rates evidences the Company's commitment to managing interest rate risk.
     Loans and leases outstanding totaled $556.5 million at March 31, 2001
 compared to $543.1 million at December 31, 2000.  This increase was primarily
 due to increases in commercial business, construction and commercial real
 estate loans.  These increases were partially offset by sales in lease
 receivables.  The Company reported non-performing assets of $7.4 million at
 March 31, 2001 compared to $5.8 million at December 31, 2000.  The increase in
 non-performing assets is primarily the result of additional non-accural leases
 amounting to $1.2 million.  The Company's non-performing assets to total
 assets ratio at March 31, 2001 was .81% compared to .63% at December 31,?2000.
 The non-performing loans to assets ratio was .66% at March 31, 2001 compared
 to .44% at December 31, 2000.
     The ratio of the allowance for loan and lease losses to total loans and
 leases has increased to 1.39% at March 31, 2001 compared to 1.36% at
 December 31, 2000.
     Non-interest income for the quarter ended March 31, 2001 amounted to
 $3.1 million, compared to $4.9 million for the same period in 2000.  During
 the quarter, the Company recognized losses of $2.0 million from client warrant
 compared to gains of $2.6 million in the same period of 2000.  Loss in the
 unconsolidated entities was $27,000 during the quarter ended March 31, 2001
 compared with losses of $955,000 in the 2000 quarter.  The 2000 losses in the
 unconsolidated entities primarily relate to the Ben Franklin mezzanine debt
 fund and NewSpring Ventures capital fund.  Securities gains of $1.3 million
 were realized during the first quarter of 2001 compared to losses of $112,000
 for the same quarter of 2000.  Securities gains during 2001 included a
 $708,000 gain on the disposition of the Company's investment in NewSeasons
 Assisted Living Communities Series B and C stock as previously reported.  Fee
 income increased $650,000 primarily due to management fees generated by the
 Company's subsidiary Progress Capital Management, Inc., and consulting fees
 generated by the Company's subsidiary KMR Management, Inc.
     Total non-interest expense was $9.5 million for the quarter ended March
 31, 2001 compared to $9.2 million for the quarter ended March 31, 2000.
 Excluding non-recurring expense of $124,000 in 2000 related to conversion
 costs, non-interest expense increased $450,000.  This increase was primarily
 due to increases in salaries and employee benefits of $206,000 as a result of
 additional employees to staff new bank branches, the acquisition of KMR
 Management, Inc., and from other new positions established within the Company.
 Professional services expense increased $200,000 mainly due to the business
 activities of KMR.  Capital securities expense increased $162,000 due to the
 issuance of $6.0 million of 11.445% capital securities in July 2000.
     Total assets decreased slightly to $904.9 million at March 31, 2001 from
 $914.2 million at December 31, 2000.  Total deposits decreased to
 $595.2 million at March 31, 2001 from $617.5 million at December 31, 2000,
 primarily due to the maturity of wholesale brokered certificates of deposit of
 $15.0 million.
 
     Progress Financial Corporation is a unitary thrift holding company
 headquartered in Blue Bell, Pennsylvania.  The business of the Company
 consists primarily of the operation of Progress Bank, which serves businesses
 and consumers through eighteen full service offices.  The Company also offers
 a diversified array of financial services including equipment leasing through
 Progress Leasing Company, with offices in Blue Bell, Pennsylvania, and
 financial planning services and investments through Progress Financial
 Resources, Inc., headquartered in Philadelphia, Pennsylvania; and asset based
 lending through Progress Business Credit.  In addition, the Company also
 conducts commercial mortgage banking and brokerage services through Progress
 Realty Advisors, Inc. with locations in Blue Bell, Pennsylvania, and
 Woodbridge, New Jersey.  The Company also receives fees for construction and
 development of activities through Progress Development Corporation; fees for
 venture capital management services provided by Progress Capital Management,
 Inc.; and financial and operational management consulting services for
 commercial clients through KMR Management, Inc. located in Willow Grove,
 Pennsylvania.  The Company's common stock is traded on The Nasdaq Stock
 Market(SM) under the Symbol "PFNC".
 
                            FINANCIAL DATA ATTACHED
 
                         Progress Financial Corporation
                 Consolidated Statements of Financial Condition
                             (Dollars in Thousands)
 
                                                    March 31,     December 31,
                                                      2001            2000
     Assets:                                       (Unaudited)      (Audited)
     Cash and due from banks:
       Non-interest bearing                           $14,009        $25,360
       Interest bearing                                16,548         59,637
     Investments and mortgage-backed securities
       Available for sale at fair value
      (amortized cost: $246,970 and $207,795)         247,257        205,166
     Held to maturity at amortized cost
      (fair value: $37,350 and $40,225)                37,278         41,940
     Loans and leases, net
      (net of reserve: $7,708 and $7,407)             548,749        535,712
     Premises and equipment                            19,491         18,343
     Other assets                                      21,575         28,091
       Total assets                                  $904,907       $914,249
 
     Liabilities and Shareholders' Equity
     Liabilities:
     Deposits                                        $595,172       $617,543
     Short-term borrowings                             67,738         79,360
     Other liabilities                                 20,695         31,954
     Long-term Debt:
       Federal Home Loan Bank advances                127,000        102,000
       Other debt                                      19,000         10,000
     Subordinated Debt                                  3,000          3,000
       Total liabilities                              832,605        843,857
     Corporation-obligated mandatorily
      redeemable capital securities of subsidiary
      trust holding solely junior subordinated
      debentures of the Corporation                    20,239         20,232
 
     Commitments and contingencies                          -              -
 
     Shareholders' equity:
     Serial preferred - 1,000,000 shares
      authorized but unissued                               -              -
     Junior participating preferred stock
      - $.01 par value - 1,010 shares
      authorized but unissued                               -              -
     Common stock, $1 par value; 12,000,000
      shares authorized; 5,834,000 and 5,814,000
      shares issued, including treasury shares
      of 185,000 and 125,000                            5,834          5,814
     Other shareholders' equity, net                   46,099         46,145
     Net accumulated other comprehensive income (loss)    130         (1,799)
       Total shareholders' equity                      52,063         50,160
       Total liabilities, Corporation-obligated
        mandatorily redeemable capital securities
        of subsidiary trust holding and shareholders'
        equity                                       $904,907       $914,249
 
 
                         Progress Financial Corporation
                     Consolidated Statements of Operations
                 (Dollars in Thousands, except per share data)
 
                                                        Three Months Ended
                                                             March 31,
                                                       2001           2000
                                                    (Unaudited)    (Unaudited)
     Interest income:
       Loans and leases, including fees               $12,675        $11,945
       Mortgage-backed securities                       3,277          2,064
       Investment securities                              990            963
       Other                                              356            239
         Total interest income                         17,298         15,211
 
     Interest expense:
       Deposits                                         6,666          5,209
       Short-term borrowings                              647            888
       Long-term borrowings                             1,866          1,518
         Total interest expense                         9,179          7,615
 
     Net interest income                                8,119          7,596
     Provision for loan and lease losses                1,047          1,058
         Net interest income after provision
          for loan and lease losses                     7,072          6,538
 
     Non-interest income:
       Service charges on deposits                        585            542
       Lease financing fees                               277            290
       Mutual fund, annuity and insurance commissions     800            879
       Loan brokerage and advisory fees                   223            521
       Private equity fund management fees                614            374
       Gain (loss) from sale of securities              1,258           (112)
       Client warrant income                           (1,959)         2,600
       Equity (loss) in unconsolidated entities           (27)          (955)
       Fees and other                                   1,287            741
 
         Total non-interest income                      3,058          4,880
 
 
     Non-interest expense:
       Salaries and employee benefits                   4,990          4,784
       Occupancy                                          613            595
       Data processing                                    215            405
       Furniture, fixtures and equipment                  546            468
       Professional services                              815            615
       Capital securities expense                         561            399
       Other                                            1,780          1,928
 
         Total non-interest expense                     9,520          9,194
 
 
     Income from continuing operations
      before income taxes                                 610          2,224
     Income tax expense                                   185            739
 
     Income from continuing operations                    425          1,485
     Income from discontinued operations, net of tax        -             53
 
     Net income                                          $425         $1,538
 
 
     Basic income from continuing operations
      per common share                                   $.07           $.25
     Diluted income from continuing operations
      per common share                                   $.07           $.25
     Basic net income per common share                   $.07           $.26
     Diluted net income per common share                 $.07           $.26
 
     Dividends per common share                          $.06           $.05
 
     Basic average common shares outstanding        5,684,940      5,846,695
 
     Diluted average common shares outstanding      5,829,134      6,048,070
 
 
                         Progress Financial Corporation
                               Supplemental Data
 
                                        Three Months Ended  Three Months Ended
                                            March 31,            December 31,
                                          2001     2000               2000
 
     Profitability Measures:
     Return on average assets              .20%     .79%               .63%
     Return on average equity             3.31    12.81              11.41
     Net interest spread (FTE) (2)        3.24     3.65               3.27
     Net interest margin (FTE) (2)        4.03     4.28               3.99
     Efficiency ratio                    67.60    69.01              74.37
     Diluted net income
      per common share (1)                $.07     $.26               $.24
 
     Selected Loan Data:
     Non-performing assets              $7,358   $4,139             $5,784
     Ratio of non-performing assets
      to total assets                      .81%     .50%               .63%
     Ratio of allowance for
      loan and lease losses
      to total loan and
      leases receivable                   1.39     1.04               1.36
     Ratio of allowance for
      loan and lease losses
     to non-performing loan
      and leases receivable             128.42   135.73             183.61
     Loan delinquency ratio               2.39     2.18               2.25
     Ratio of loans and leases
      to deposits                        93.50    98.73              87.95
 
     Selected Equity Data:
     Book value per share (1)            $9.22    $7.98              $8.82
     Tangible book value per share (1)    8.76     6.98               8.28
     Dividends per common share (1)        .06      .05                .06
     Average equity to average assets     5.89%    6.20%              5.56%
     Tier 1 risk-based capital ratio
      (Bank)                             10.61     9.05               9.79
     Total risk-based capital ratio
      (Bank)                             11.86    10.06              11.04
     Tier 1 leverage ratio (Bank)         6.95     6.22               6.46
 
     Selected Average Balances:
       Loans, gross                   $546,195 $521,526           $565,995
       Earning assets                  829,546  721,929            835,202
       Total assets                    883,552  778,755            894,731
       Deposits                        610,972  526,196            604,321
       Equity                           52,027   48,298             49,723
 
     (1) Per share amounts have been restated to reflect the 5% stock dividend
 distributed to shareholders on August 31, 2000.
     (2) FTE represents a fully tax equivalent basis.
 
 
                         Progress Financial Corporation
                             Supplemental Balances
 
     Period-End Balances At:           March 31,      December 31,   % Change
                                          2001            2000
 
     Loans and Leases, Net:
     Commercial business                $185,974       $175,972         5.7%
     Commercial real estate              184,957        178,874        3.4
     Construction, net of loans
      in process                          68,909         60,172       14.5
     Single family residential
      real estate                         32,861         34,676       (5.2)
     Consumer                             37,373         37,242         .4
     Leases receivable                    46,383         56,183      (17.4)
         Total loans and leases          556,457        543,119        2.5
     Allowance for loan and lease
      losses                              (7,708)        (7,407)       4.1
         Loans and leases, net          $548,749       $535,712        2.4%
 
     Deposits:
     Non-interest-bearing
      demand deposits                    $67,105        $88,356      (24.1)%
     NOW and SuperNow                    112,062        104,047        7.7
     Money Market                         39,382         37,157        6.0
     Passbook and Statement Savings       28,327         27,337        3.6
     Time deposits                       348,296        360,646       (3.4)
         Total Deposits                 $595,172       $617,543       (3.6)%
 
 SOURCE  Progress Financial Corporation