On October 25, 2000 Allstate  Financial  Corporation  issued the following press
release:



   ALLSTATE FINANCIAL CORPORATION TO ACQUIRE HARBOURTON FINANCIAL CORP., COURT
                         APPROVES RECAPITALIZATION PLAN

McLean,  VA, October 25, 2000 - Allstate Financial  Corporation  ("Allstate," or
the  "Company")  (OTC:  ASFN) today  reported  that its board of  directors  has
approved the acquisition of Harbourton Financial  Corporation  ("Harbourton,") a
company which is majority  owned by Value  Partners,  Ltd.,  Allstate's  largest
shareholder.   Harbourton   provides   financing  to   homebuilders,   including
acquisition,  development and  construction  lending as well as mezzanine equity
investments.  As of August 31, 2000,  Harbourton had assets (unaudited) of $10.6
million,  shareholders'  equity  of $9.1  million  and a loan  portfolio  of $37
million (including serviced participations).  Harbourton reported pre-tax income
of $785,307 for the eight months  ended August  31,2000.  Under the merger plan,
Allstate  will  issue  approximately  7.5  million  shares of common  stock plus
approximately  $1.9  million  in cash  to  Harbourton's  shareholders.  Allstate
indicated the merged  companies would pursue  principally the existing  business
plan developed by Harbourton to provide  residential  real estate  financing and
mezzanine  investments.  The  transaction  is expected to be accounted  for as a
combination of a pooling of interests and a purchase.

J. Kenneth McLendon,  currently President and founder of Harbourton, will become
President of Allstate after the merger.  Mr. McLendon has 29 years of experience
in  real  estate  lending  and  mortgage   banking,   serving  as  President  of
Congressional  Mortgage  and McLean  Partners  Inc.  David W.  Campbell,  who is
currently Chairman of the board of Allstate,  will also continue in that role in
the combined  company.  Mr.  Campbell has 28 years of  experience  in commercial
banking and mortgage  lending.  He  previously  served as  President  and CEO of
Ameribanc  Savings, a $1.2 billion banking  institution.  Mr. McLendon stated he
was "extremely pleased that the two companies were in a position to complete the
merger,  providing a stronger  combined balance sheet." Mr. Campbell stated "the
significant  net profits of  Harbourton  and  Allstate's  net operating tax loss
carryforwards  were a natural fit, which will enhance  shareholder  value in the
future."

The Company also noted that it has reincorporated as a Delaware corporation, and
that the  Delaware  Court of Chancery  for New Castle  County has  approved  its
recapitalization  plan (the "Plan").  Under the Plan,  over 90% of the Company's
10% Convertible  Subordinated Notes due September 2003, plus interest thereon at
12.5% per annum,  will be  converted  into common  stock of Allstate at $.95 per
share.  The  conversion  is expected to be completed on October 26, 2000,  after
which the Company  anticipates  realizing the benefits of a stronger equity base
and lower  interest  costs,  while  preserving the use of its net operating loss
carryforwards.  Mr.  Campbell noted that "the  acquisition of Harbourton and the
conversion of the notes will  immediately be accretive to earnings per share and
will significantly increase Allstate's net tangible equity per share."

Separately,  Allstate  announced  that  Charles  G.  Johnson  had  resigned  his
positions  of  President,  CEO, and member of the board of  directors.  David W.
Campbell,  Chairman of the board of  directors,  was  elected to the  additional
positions of Interim  President and CEO.  Timothy G. Ewing,  Managing Partner of
Ewing & Partners,  the general  partner of Value  Partners,  Ltd., was elected a
director to fill the vacancy caused by Mr. Johnson's resignation.

After the completion of the Plan and the merger Value Partners, Ltd. is expected
to own  approximately  85% of  Allstate's  total shares  outstanding.  Mr. Ewing
stated "the Harbourton merger represents the first acquisition of earning assets
which will allow  Allstate to take full advantage of the  recapitalized  balance
sheet  and  benefit  from  the   utilization  of  its  net  operating  tax  loss
carryforward."

This press release may contain various "forward-looking  statements," within the
meaning of Section 27A of the Securities Exchange Act of 1934, as amended,  that
represent  Allstate's  expectations or beliefs  concerning  future events.  Such
forward-looking  statements  are about  matters that are  inherently  subject to
risks and uncertainties.  Factors that could cause actual results or performance
to differ from the  expectations  expressed  or implied in such  forward-looking
statements include the implementation of the Plan, the closing of the Harbourton
merger,  changes  in the  timing  and  amount  of  earning  assets  which may be
originated  by the  Company or by  Harbourton,  changes in revenue  and  expense
trends  (including  trends  affecting  charge-offs)  of Allstate or  Harbourton,
changes in  Allstate's  or  Harbourton's  markets  and  changes  in the  economy
(particularly in the markets served by Allstate or Harbourton). Such factors are
discussed  in detail in  Allstate's  filings  with the  Securities  and Exchange
Commission.