Fremont General Reports 92 Percent Increase in Quarterly Net Income

Fremont General Corporation reported net income of $23,538,000 for the second quarter of 2002. This was comprised of net income from continuing operations of $22,918,000 and an after tax gain on the extinguishment of debt of $620,000. The net income from continuing operations of $22,918,000 for the second quarter of 2002 represents an increase of 92 percent, as compared to $11,927,000 for the second quarter of 2001.

Net income from continuing operations for the first six months of 2002 was $40,453,000, as compared to $23,708,000 for the first six months of 2001 and $53,264,000 for all of 2001.

Diluted net income per share from continuing operations was $0.32 for the second quarter of 2002, as compared to $0.18 per share for the second quarter of 2001. For the six-month period ended June 30, 2002, diluted net income per share from continuing operations was $0.57.

The company’s stockholders’ equity per share was $5.56 at June 30, 2002. During the quarter ended June 30, 2002, the company extinguished an additional $44.8 million par value of its senior notes outstanding.

The company’s nationwide financial services operations, represented primarily by the company’s industrial bank, Fremont Investment & Loan, reported record pre- tax income of $54,097,000 for the second quarter of 2002, as compared to $34,070,000 for the second quarter of 2001. Fremont Investment & Loan is “well- capitalized”, as defined by the FDIC, with a total Risk-Based Capital ratio of 12.19 percent at June 30, 2002 (the minimum Risk-Based Capital ratio for “well- capitalized” status is 10.0 percent), and had $4.4 billion in FDIC-insured deposits at June 30, 2002. Other developments include:

• Non-performing assets (non-accrual loans and REO) decreased during the
second quarter from $167.4 million as of March 31, 2002 to
$106.7 million as of June 30, 2002.
• Accruing loans past due 90 days or more decreased during the second
quarter from $36.6 million as of March 31, 2002 to $1.1 million as of
June 30, 2002.
• Net loan charge-offs increased during the second quarter of 2002 to
$17.1 million from $5.6 million during the first quarter of 2002. Of
the $17.1 million, $9.4 million was attributable to commercial real
estate loans and $7.7 million to syndicated commercial loans. The
syndicated commercial loan portfolio is being liquidated and only
$49.2 million in outstanding balances remain. The net charge-off ratio
for the first six months of 2002 for the commercial real estate loan
portfolio was 0.76%.
• The allowance for loan losses, as a percentage of total loans
receivable, was 2.91% at June 30, 2002, as compared to 2.94% at
March 31, 2002 and 2.70% at December 31, 2001.
• As of June 30, 2002, the ratio of the allowance for loan losses to
non-performing assets was 110.5%.
• Commercial and residential real estate loans receivable, before
allowance for loan losses, totaled approximately $4.0 billion at
June 30, 2002, as compared to $3.8 billion at March 31, 2002. Loans
receivable are primarily comprised of commercial real estate loans, as
the Company currently sells on a whole loan basis substantially all of
its residential real estate loan production.
• Residential real estate loan originations totaled $1.54 billion during
the second quarter of 2002, up from $1.33 billion during the first
quarter of 2002 and compared to $3.33 billion for all of 2001.

The Board of Directors of the company declared a cash dividend of $0.02 per share of common stock, payable Oct. 31, 2002 to shareholders of record on Sept. 27, 2002.