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Press Release

Delta Financial Corporation Announces First Quarter Results

Delta to be Delisted from NYSE

Shares to Trade on OTCBB Commencing May 4th

WOODBURY, N.Y. -- April 27, 2001--Delta Financial Corporation (NYSE: DFC) today announced results for the first quarter ended March 31, 2001.

As expected, the Company reported a net loss of $33.8 million, or $2.12 per share (basic and diluted), for the quarter ended March 31, 2001, compared to net income of $1.8 million, or $0.11 per share (basic and diluted), for the quarter ended March 31, 2000. The loss for the quarter primarily resulted from non-recurring charges principally associated with (1) the Company's write down of residual certificates sold under a previously-announced forward purchase agreement expected to close in the second quarter of 2001, for a cash purchase price below the Company's carrying value of such residual certificates, (2) costs associated with closing two retail branches, and (3) recognition of severance costs associated with the sale of the Company's servicing platform.

The net charge for non-recurring items for the first quarter of 2001 totaled $26.7 million on an after tax basis, or $1.67 per share. The non-recurring charge primarily reflects an after tax $25.4 million non-cash charge relating to Company's forward purchase agreement for the sale of five residual certificates to be settled in the second quarter of 2001. The forward purchase agreement will provide additional working capital for the Company. As previously announced, the charge reflects that these residuals certificates are being sold for a significant discount to the Company's carrying value for such certificates.

``As anticipated, the results for the first quarter of 2001 primarily reflect the charges incurred with respect to our overall corporate restructuring plan announced in March 2001. In addition, we expect to incur a significant net loss for the second quarter of 2001 (and commensurate reduction in our net worth), as we look to finalize our corporate restructuring including the sale of our servicing portfolio and the extinguishment of our long term debt,'' said Hugh Miller, President and Chief Executive Officer.

After the close of trading yesterday, the New York Stock Exchange announced that it decided to suspend, and ultimately delist, Delta Financial's Common Stock prior to the opening on Friday, May 4, 2001. The Exchange stated that it took this action because Delta was unable to meet the NYSE's continued listing standards of maintaining a minimum of $15 million in market capitalization and a minimum share price of $1 over a 30-day trading period. By Friday, May 4, 2001, the Company expects that its Common Stock will trade on the OTC Bulletin Board. In accordance with standard procedures, the Company will receive its new ticker symbol just before it begins trading on the OTCBB.

The weighted average fully-diluted number of common shares outstanding was 15.9 million for the three months ended March 31, 2001 and March 31, 2000.

During the first quarter of 2001, the Company sold $144.3 million of mortgage loans on a servicing-released basis for an aggregate cash premium of 4.0%. The Company did not securitize in the first quarter of 2001. However, subject to market conditions, the Company expects to securitize in the second quarter of 2001.

Loan originations for the first quarter of 2001 were $171 million compared to $185 million reported in the fourth quarter of 2000 and $287 million reported in the first quarter of 2000. The decrease in origination volume was not unexpected, as management has spent much of its efforts on the aforementioned corporate restructuring. For the first quarter of 2001, broker and retail originations represented 62% and 38% of total production, compared to 68% and 32%, in the fourth quarter of 2000. For the first quarter of 2000, broker and retail originations and correspondent purchases represented 60%, 25% and 15% of total production, respectively. The Company closed its correspondent division in second quarter of 2000.

The Company's loan servicing portfolio decreased to $3.1 billion at March 31, 2001 from $3.3 billion at December 31, 2000. The decrease in the servicing portfolio is primarily the result of the Company selling whole loans on a servicing released basis in the first quarter of 2001.

Loans delinquent 30 to 59 days decreased to 7.1% or $217.0 million of the loan servicing portfolio at March 31, 2001 compared to 7.2% or $238.0 million at December 31, 2000. Loans delinquent 60 days or more increased to 5.5% or $168.1 million of the loan servicing portfolio at March 31, 2001 compared to 5.4% or $180.5 million at December 31, 2000. All delinquency statistics are reported on a contractual basis. Loans in foreclosure increased to 6.7% or $204.0 million of the loan servicing portfolio at March 31, 2001 compared to 6.2% or $206.3 million at December 31, 2000. Annualized charge-offs as a percentage of the average servicing portfolio increased to 1.25% or $9.9 million for the three months ended March 31, 2001 compared to an annualized 1.19% or $10.2 million for the three months ended December 31, 2000. On a dollar basis, delinquency and losses declined on a comparable basis. However, because the servicing portfolio is decreasing, some of the percentages increased despite overall lower delinquency and loss amounts.

``I am pleased to announce that we are right on schedule to complete the previously-announced transfer of Delta's servicing portfolio to Ocwen by the beginning of May 2001,'' said Mr. Miller. ``We have already transferred four securitization pools to Ocwen's servicing platform on April 16, 2001, and experienced a smooth transition. With the disposition of our servicing operations, we eliminate the cash flow drain associated with making monthly delinquency and servicing related advances. At the same time, we expect this transfer of servicing to improve profitability as we will no longer bear the high costs of servicing a seasoned portfolio, nor will we incur the additional capital charges associated with making advances. As such, we remain cautiously optimistic that we can return to profitability sometime in the second half of 2001.''


Delta Financial Corporation and Subsidiaries
Consolidated Statements of Operations (unaudited) (dollars in thousands, except per share data) Three Months Ended March 31, ---------------------- 2001 2000 --------- --------- Revenues: Net gain on sale of mortgage loans $ 5,377 $ 14,654 Interest (14,789) 10,537 Servicing fees 2,213 4,066 Origination fees 4,162 6,688 --------- --------- Total revenue (3,037) 35,945 Expenses: Payroll and related costs 11,324 15,561 Interest expense 5,829 7,803 General and administrative 11,831 9,456 Disposition of branches 786 - Restructuring charges 473 - --------- --------- Total expenses 30,243 32,820 Income (loss) before income tax expense (benefit) (33,280) 3,125 Income taxes 472 1,299 --------- --------- Net income (loss) $ (33,752) $ 1,826 ========= ========= Per share data: Net income (loss) per common share - basic and diluted $ (2.12) $ 0.11 ========= ========= Weighted average number of shares outstanding (thousands) 15,921 15,921 ========= ========= Delta Financial Corporation and Subsidiaries Consolidated and Condensed Balance Sheets (unaudited) (dollars in thousands) March 31, December 31, 2001 2000 Assets: Cash and interest-bearing deposits $ 79,373 $ 62,270 Loans held for sale, net 101,360 82,699 Interest-only and residual certificates, net 196,070 224,260 Other assets 60,570 95,947 --------- --------- Total assets $ 437,373 $ 465,176 ========= ========= Liabilities: Warehouse financing and other borrowings $ 106,815 $ 88,632 Senior notes 149,596 149,571 Other liabilities 116,991 113,411 --------- --------- Total liabilities 373,402 351,614 --------- --------- Stockholders' equity: 63,971 113,562 --------- --------- Total liabilities and stockholders' equity: $ 437,373 $ 465,176 ========= ========= Delta Financial Corporation and Subsidiaries Servicing Portfolio Information (unaudited) (dollars in thousands) March 31, December 31, 2001 2000 ------------ ------------ Loans serviced $ 3,055,982 $ 3,312,582 Average loans serviced $ 3,160,196 $ 3,406,684 Loans 30-59 days delinquent 7.1% 7.2% Loans 60+ days delinquent 5.5% 5.4% Total delinquencies 12.6% 12.6% Loans in foreclosure 6.7% 6.2% Total real estate owned 2.1% 1.8% Losses as a percentage of average loans serviced (annualized) 1.25% 1.19%

Founded in 1982, Delta Financial Corporation is a Woodbury, NY-based specialty consumer finance company engaged in originating, securitizing and selling (and until the second quarter of 2001, servicing) non-conforming home equity loans. Delta's loans are primarily secured by first mortgages on one- to four-family residential properties. The Company originates home equity loans primarily in 20 states. Loans are originated through a network of approximately 1,500 brokers and the Company's retail offices. Prior to July 2000, loans were also purchased through a network of approximately 120 correspondents. Since 1991, Delta Financial has sold approximately $6.5 billion of its mortgages through 28 AAA rated securitizations. At March 31, 2001, the Company's servicing portfolio was approximately $3.1 billion.

``Safe Harbor'' Statement under the Private Securities Litigation Reform Act of 1995: Certain statements contained in this press release, which are not historical fact, may be deemed to be ``forward-looking'' statements under federal securities laws that involve risk and uncertainties. There are many important factors that could cause Delta Financial Corporation and its subsidiaries' actual results to differ materially from those indicated in the forward-looking statements. Such factors include, but are not limited to: the Company's ability or inability to consummate all facets of its debt restructuring, including without limitation, the exchange offer; the availability of funding at favorable terms and conditions, including without limitation, warehouse, residual and other credit facilities; the Company's ability or inability to continue to access the securitization and whole loan markets at favorable terms and conditions; costs associated with litigation, the Company's regulatory settlements with state and federal agencies and other regulatory compliance matters and changes (legislative or otherwise) affecting mortgage lending activities and the real estate market; the Company's ability or inability to complete all facets of the transfer of servicing to Ocwen; competition, loan losses, loan prepayment rates, delinquency and default rates, general economic conditions, including interest rate risk, future residential real estate values demand for Delta Financial Corporation and its subsidiaries' services, and other risks identified in Delta Financial Corporation's Securities and Exchange Commission filings.


     Delta Financial Corporation, Woodbury

     Richard Blass, 516/364-8500

     Executive Vice President & Chief Financial Officer

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