Consumers Financial Corporation Grants Option to Investor Group to Acquire Controlling Interest in Its Common Stock and Signs Agreement to Sell Insurance Subsidiary.

Business Editors

CAMP HILL, Pa.--(BUSINESS WIRE)--March 18, 2002

Consumers Financial Corporation (the "Company") announced today that it has entered into an Option Agreement with CFC Partners, Ltd., a New York-based investor group (the "Investor Group"), which will permit the Investor Group to acquire a 51% interest in the Company's common stock through the issuance of new shares.

In August 2001, the Company's Board of Directors determined that it would consider a transaction of this type in lieu of the Plan of Liquidation and Dissolution approved by the shareholders in March 1998, because it has the potential to produce future value for the common shareholders, who are projected to receive nothing in a liquidation.

The Board also concluded that, in proceeding with this approach, the Company's preferred shareholders should be protected by offering such shareholders the option, prior to the change in control, of tendering their shares in exchange for cash or continuing to hold the shares.

Following the issuance of the new common shares, the Investor Group has indicated its intention to merge or otherwise combine certain existing and start-up businesses into the Company.

These businesses, in which the Investor Group has indicated it has a significant position, initially include (i) a company that will provide international long distance telephone services to government, corporate and residential customers at discounted prices, (ii) a company which provides services that enable its customers to deploy and migrate to E-business portals and E-marketplaces and (iii) a company that will offer business to business online financial services.

Under the terms of the Option Agreement, the Investor Group has 15 business days from completion of the planned tender offer to the preferred shareholders to exercise the option to acquire the Company's common shares. The Investor Group will pay $108,000 in cash for the new shares.

In order to proceed with the tender offer to the preferred shareholders, the Company must first complete either the sale or liquidation of its insurance company subsidiary. Virtually all of the net assets of the Company are held by the subsidiary, and those assets cannot be withdrawn under Delaware Insurance Laws until the subsidiary is sold or liquidated.

In that regard, the Company recently signed an agreement to sell the subsidiary. The completion of that transaction is subject to the approval of the Delaware Insurance Department which is now reviewing the purchaser's request for a change in control.

In the event the Investor Group elects not to exercise its option to acquire control of the Company, the Board of Directors intends to continue with the liquidation and dissolution of the Company.