Allstate Financial Corporation
8180 Greensboro Drive, Suite 525
McLean, Virginia 22102
(703) 883-9757 Telephone  (703) 821-1371 Fax



                YOUR VOTE IS IMPORTANT- PLEASE REPLY IMMEDIATELY!

August 11, 2000

Dear Stockholder:

On July 11, we wrote to you regarding the Annual  Meeting of Allstate  Financial
Corporation shareholders,  which was held on August 8, 2000. As described in the
Notice of Annual  Meeting and Proxy  Statement,  one of the extremely  important
matters  to  consider   and  vote  upon  during  this   meeting   involved   the
reincorporation of the Company as a Delaware corporation. THE REINCORPORATION IS
A CRITICAL STEP IN THE COMPANY'S PLAN OF  RECAPITALIZATION  AND FUTURE  BUSINESS
PLANS.

Proposals  2a through  2d,  which  relate to the  reincorporation,  require  the
affirmative vote of the holders of at least two-thirds of the outstanding shares
of the Company's  common  stock.  These four  proposals are  "non-discretionary"
items upon which your  broker may not vote your shares  unless you,  the client,
have furnished voting  instructions on such proposals.  At the meeting on August
8, 2000,  less than  two-thirds  of  eligible  shareholders  cast their votes in
person  or by proxy,  although  those who  voted  overwhelmingly  supported  the
proposals.  The  consideration of proposals 2a through 2d was adjourned to a new
meeting to be held on August 29,  2000 at 11 a.m.  at the  Company's  offices at
8181 Greensboro Drive, Suite 525 McLean, Va. 22102. All stockholders are invited
to attend the meeting.  WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOUR VOTE
IS  IMPORTANT.  THE BOARD OF  DIRECTORS  URGES YOU TO SIGN,  DATE AND RETURN THE
ENCLOSED PROXY CARD AS SOON AS POSSIBLE. If you attend the meeting, you may vote
in person even if you have previously mailed a proxy.

Please read the Proxy  Statement  carefully  for  information  on  proposals  2a
through 2d, which are the only proposals being considered at the August 29, 2000
meeting. If you did not receive a Proxy statement or you would like another copy
sent to you, please contact us at the number below. If you have already returned
your proxy,  it is not  necessary  for you to vote on Proposals 2a through 2d at
this time. Your proxy has been recorded and will be voted at the August 29, 2000
meeting.

The Board of Directors and management of Allstate appreciate your support.

Sincerely,

/s/Charles G. Johnson

Charles G. Johnson
President and Chief Executive Officer



                         ALLSTATE FINANCIAL CORPORATION
                                REVOCABLE PROXY

        THIS PROXY IS  SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLSTATE
FINANCIAL  CORPORATION  FOR USE ONLY AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON AUGUST 8, 2000 AND AT ANY ADJOURNMENT THEREOF.

        The  undersigned  hereby appoints the Board of Directors of the Company,
or any successors thereto, as proxies, with full powers of substitution, to vote
the shares of the  undersigned  at the Annual  Meeting  of  Shareholders  of the
Company to be held at the Bank of America,  8300 Greensboro  Drive,  McLean,  VA
22102 on August 8,  2000 at 11:00  a.m.,  Eastern  Time,  or at any  adjournment
thereof,  with all the powers that the  undersigned  would possess if personally
present, as follows:

1. Election of Directors

        FOR all nominees listed                            WITHHOLD authority to
        (except as marked to the                           vote for all nominees
        contrary below)                                             listed below

Nominees for one-year term:    David W. Campbell, Charles G. Johnson,
Steven W. Lefkowitz,  Edward A. McNally, William H. Savage and
 Lindsay B. Trittipoe

To withhold  authority to vote for some but not all of the  nominees,  write the
name of the nominee(s) in the space provided below:

               -----------------------------------------------------------------

2.       Approval of the Company's reincorporation as a Delaware corporation.

         (a) Approve  the merger of the Company  with  Allstate  Delaware,  with
Allstate Delaware to be the surviving entity,  and approve the Merger Agreement,
the  Certificate  of  Incorporation,  and the  Bylaws,  other than as to matters
recommended in proposals 2(b), 2(c), and 2(d);

        FOR                                AGAINST                      ABSTAIN

         (b) Approve the  provisions  in the  Certificate  of  Incorporation  of
Allstate Delaware  prohibiting,  after the merger, any attempted sale, purchase,
transfer,  assignment,  conveyance,  pledge or other disposition ("Transfer") of
any stock,  warrants,  rights or options in  Allstate  Delaware to any person or
entity who owns (or would own after  giving  effect to the  Transfer)  more than
4.9% of any class of  securities  of Allstate  Delaware,  unless the Transfer is
approved by at least two-thirds of the board of directors of Allstate Delaware;

         FOR                               AGAINST                      ABSTAIN

         (c) Approve the  provision  in the  Allstate  Delaware  Certificate  of
Incorporation  which  provides  that the number of shares of common  stock which
Allstate  Delaware  is  authorized  to issue  after the  merger  is  20,000,000,
compared with the maximum 10,000,000 authorized shares of common stock which may
be issued by the Company;

         FOR                                AGAINST                      ABSTAIN

         (d)  Approve the  provisions  in the  Allstate  Delaware  Bylaws  which
provide  that  stockholders  who want to make a  nomination  for the election of
directors or a proposal for new business at any annual  meeting after the merger
must deliver a written  notice to the secretary of Allstate  Delaware  providing
certain  specified  information,  so that it is received  not less than 120 days
prior to the  anniversary  date of the  mailing of proxy  materials  by Allstate
Delaware  in  connection  with  the  immediately  preceding  annual  meeting  of
stockholders  or,  with  respect  to the first  annual  meeting to be held after
completion of the merger, by December 15, 2000;

         FOR                              AGAINST                       ABSTAIN


3.       Approval of the Company's 2000 Stock Option Plan.

        FOR                                AGAINST                      ABSTAIN

4.       Approval of the Company's 2000 Restricted Stock Plan for Non-Employee
 Directors.

        FOR                                AGAINST                      ABSTAIN

5.      Ratification  of the  appointment of McGladrey & Pullen,  LLP as
independent auditors for the year ending December 31, 2000.

        FOR                                AGAINST                      ABSTAIN

        In their discretion,  the proxies are authorized to vote with respect to
approval of the minutes of the last meeting of stockholders, the election of any
person as a  director  if the  nominee is unable to serve or for good cause will
not serve,  matters incident to the conduct of the meeting,  and upon such other
matters as may properly come before the meeting.

        The  Board of  Directors  recommends  that  you  vote  FOR the  Board of
Directors' nominees and FOR each of the proposals listed above. Shares of common
stock of the Company will be voted as specified.  If no  specification  is made,
shares will be voted for the election of the Board of Directors' nominees to the
Board of  Directors,  FOR  proposals  2(a),  2(b),  2(c),  2(d),  3, 4 and 5 and
otherwise at the discretion of the proxies.  This proxy may not be voted for any
person who is not a nominee of the Board of Directors of the Company. This proxy
may be revoked at any time before it is exercised.

        The  undersigned  hereby  acknowledges  receipt  of the Notice of Annual
Meeting of Shareholders of Allstate  Financial  Corporation called for August 8,
2000, a Proxy  Statement  for the Annual  Meeting and the 1999 Annual  Report on
Form 10-KSB.

        PLEASE MARK,  SIGN,  DATE AND PROMPTLY  RETURN THIS PROXY CARD USING THE
ENCLOSED ENVELOPE.

Dated:                                                  , 2000
        ------------------------------------------------







                                                             Signature(s)


Please sign exactly as your name(s) appear on this Proxy.  Only one signature is
required  in the  case of a joint  account.  When  signing  in a  representative
capacity, please give title.