Contact: David W. Campbell, Chairman
Phone:            703-883-9757  Extension  18


                         ALLSTATE FINANCIAL CORPORATION
                           ANNOUNCES COMPLETION OF THE
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                        HARBOURTON FINANCIAL CORP. MERGER

McLean, VA, December 1, 2000 - Allstate Financial Corporation ("Allstate" or the
"Company") (OTC: ASFN) today announced it had completed the merger of Harbourton
Financial Corp.  ("Harbourton")  into Allstate  effective  November 30, 2000. In
accordance  with the  terms  of the  merger  agreement  Allstate  completed  the
transaction,  valued at $9.3  million,  through the issuance of 7,516,160 of its
common  shares and the  payment of $ 2.1  million in cash.  Allstate's  majority
shareholder,  Value Partners, Ltd., was the majority owner of Harbourton and now
owns  approximately  84% of the  Company's  shares.  As a result of the  merger,
Allstate is  projected  to report  shareholders'  equity at December 31, 2000 in
excess of $15 million, with 15,184,164 common shares outstanding.

Harbourton   provides   financing  to   homebuilders,   including   acquisition,
development and construction  lending as well as mezzanine  equity  investments.
Harbourton has been profitable  since  inception and reported  pre-tax income of
approximately  $883  thousand  for the nine months ended  September  30, 2000. A
principal  advantage of the merger is the ability of the merged companies to use
Allstate's net operating tax loss carryforwards to shelter future earnings.  The
Company  expects  to  principally  pursue  the  business   activities  in  which
Harbourton is currently engaged.

J. Kenneth  McLendon,  previously  the President of Harbourton  has been elected
President  of the Company  and David W.  Campbell  continues  as Chairman of the
Board. Mr. McLendon stated he is "very excited about the  possibilities  for the
Company,  especially  its  potential  for growth and  profitability  through the
resources available to the merged companies."

Mr.  Campbell  stated "the Company has made  tremendous  progress on its plan of
reorganization,  including the completion of the Harbourton merger, the exchange
of its convertible  subordinated  notes, the reduction in operating expenses and
collection of non-performing assets."

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 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 U.S.  Securities and Exchange
Commission.

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