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Motor Club of America Announces Q2 and Six Month Results

15 August 2000

    PARAMUS, N.J. - Motor Club of America announced its second quarter and six 
month results for the period ended June 30, 2000.

    Revenues for the three months ended June 30, 2000 were $22,453,506 as
compared to $14,417,053 for the same period in 1999.  Net income for the three
month period ended June 30, 2000 was $639,511, or $.30 basic and $.28 diluted
net income per share, as compared to $1,011,433 or $.48 basic and diluted net
income per share in 1999.

    Revenues for the six months ended June 30, 2000 were $42,151,938 as
compared to $28,731,826 for the same period in 1999.  Net income for the six
month period ended June 30, 2000 was $889,023, or $.42 basic and diluted net
income per share, as compared to $1,997,054 or $.94 basic and diluted net
income per share in 1999.

    The Company acquired North East Insurance Company ("North East") and
Mountain Valley Indemnity Company ("Mountain Valley") on September 24, 1999
and March 1, 2000, respectively.  The six month 2000 results includes
non-recurring expenses related to the Mountain Valley acquisition of
$267,804 or $.13 basic net income per share, net of taxes.  Absent these
non-recurring charges, net income for the six months ended June 30, 2000 was
$1,156,827 or $.55 basic net income per share.

    Because North East and Mountain Valley were acquired on September 24, 1999
and March 1, 2000, respectively, comparability of revenues and net income on a
year-to-year and quarter-to quarter basis in 2000 are affected.  To aid
comparability, North East and Mountain Valley's separate revenues and net
income for the three and six months ended June 30, 2000 were as follows:

                          Three Months Ended        Six Months Ended
                             June 30, 2000            June 30, 2000

    Company             Revenues      Net Income   Revenues  Net Income

    North East         $4,835,221      $136,854   $9,398,699    $9,778

    Mountain Valley     4,043,131        65,229    5,509,954    69,988

    Total              $8,878,352      $202,083  $14,908,653   $79,766

    Archer McWhorter, Chairman of the Board of the Company, said, "Preserver
Insurance Company continued to display impressive revenue growth and earnings
strength, with Commercial Lines premium growing nearly 17% in 2000.  Personal
auto results in New Jersey, although better than the second half of 1999, have
not shown meaningful progress.  It is noteworthy however, that year to date
revenues from New Jersey personal auto were only 45% of consolidated revenues,
the lowest in the Company's history, and this percentage should continue to
decline."

    Motor Club of America owns and operates five regionally focused property
and casualty insurance companies, including companies that specialize in small
and mid-sized insurance through the Preserver Insurance Group.

    The Preserver Insurance Group consists of Preserver Insurance Company,
which writes small commercial and homeowners insurance in New Jersey, and
Mountain Valley Indemnity Company, which writes small and mid-sized commercial
insurance in New England and New York.  The Preserver Insurance Group is rated
B++ (Very Good) by A.M. Best Company.  American Colonial Insurance Company
plans to commence operations in New York in the third quarter 2000, writing
commercial lines in tandem with Mountain Valley.

    Motor Club of America Insurance Company writes personal automobile
insurance in New Jersey and is rated B+ (Very Good) by Best.  North East
Insurance Company writes personal automobile and small commercial lines
insurance in the State of Maine and is rated B (Fair) by Best.

  
                              MOTOR CLUB OF AMERICA
                                 AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (Unaudited)

                          For the Six Months Ended  For the Three Months Ended
                             June 30,    June 30,    June 30,     June 30,
                               2000        1999        2000         1999

      Revenues:

    Insurance premiums
     (net of premiums ceded
     totaling $9,340,353,
     $3,667,516,
     $6,989,835 and
     $1,848,619)          $39,067,248  $26,266,691  $20,807,821  $13,182,492
    Net investment
     income                 2,977,990    2,384,857    1,578,704    1,192,325
    Realized gains on
     sales of investments       4,524        5,378        4,524        5,378
    Other revenues            102,176       74,900       62,457       36,858
      Total revenues       42,151,938   28,731,826   22,453,506   14,417,053

      Losses and Expenses:

    Insurance losses and
     loss expenses incurred
     (net of reinsurance
     recoveries totaling
     $8,142,651,
     $1,842,816,
     $5,457,950 and
     $959,195)             26,095,143   17,540,281   13,613,138    8,657,338
    Amortization of
     deferred policy
     acquisition costs     11,116,776    7,889,322    5,920,892    4,057,199
    Other operating
     expenses               2,786,293      743,718    1,388,251      405,049
    Interest expense          841,010      106,796      517,403       53,857
    Amortization of
     goodwill                  42,348           --       21,174           --
      Total losses and
       expenses            40,881,570   26,280,117   21,460,858   13,173,443

    Income before Federal
     income taxes           1,270,368    2,451,709      992,648    1,243,610

    Provision for Federal
     income taxes:
      current                  21,979       55,858        7,269       27,788
      deferred                359,366      398,797      345,868      204,389
    Total provision for
     Federal income taxes     381,345      454,655      353,137      232,177

    Net income               $889,023   $1,997,054     $639,511   $1,011,433

    Net income per
     common share:
    Basic                       $0.42        $0.95        $0.30        $0.48
    Diluted                     $0.42        $0.94        $0.28        $0.48

    Weighted average common
     and potential common
     shares outstanding:
    Basic                   2,124,387    2,116,429    2,124,387    2,116,429
    Diluted                 2,124,387    2,123,899    2,769,965    2,120,053

    Net premiums written   39,313,965   24,447,398   21,692,575   12,017,155

    GAAP loss ratio              66.8%        66.8%        65.4%        65.7%
    GAAP expense ratio           35.6%        32.9%        35.1%        33.8%
    GAAP combined ratio         102.4%        99.6%       100.6%        99.5%

    Book value                 $13.37       $13.14