PacificAmerica Responds to Inquiries Regarding Adjustment of Acquisition Price.

WOODLAND HILLS, Calif.--(BUSINESS WIRE)--Oct. 8, 1998-- PacificAmerica Money Center Inc. (Nasdaq:PAMM) Thursday responded to inquiries regarding the provision for adjustment of the initial $6 per share acquisition price (of the total maximum $10 per share price) to be paid by Fremont General Corp.

As previously announced, the initial $6 per share price to be paid in cash to stockholders of PAMM upon closing will not be reduced unless the proceeds from a sale of the interest-only strip receivable held by PAMM are less than approximately 50% of the current book value of the receivable.

The current book value of the receivable was approximately $147 million at Aug. 31, 1998. Therefore, if the net proceeds of the sale of the receivable are less than approximately $73 million, the aggregate $31.8 million total initial acquisition payments to all stockholders ($6 per share times approximately 5.3 million outstanding shares) would be reduced, and the reduction, if any, would be divided among all PAMM stockholders.

The amount of the reduction in the $31.8 million aggregate payments would be equal to the difference between approximately $73 million and the net proceeds of the sale of the receivable. For the purpose of determining net proceeds, gross proceeds of the sale would be reduced only by direct selling costs, and not by the amount necessary to repay any borrowings on the receivable. The aggregate reduction, if any, would be divided among all PAMM stockholders.

PAMM believes that, even using significantly more conservative assumptions than it uses to determine the book value of the receivable, the present value of the estimated future cash flows from the receivable is greater than $73 million. However, given the current uncertainty and illiquidity of the market for these assets, there can be no assurance of the price at which this receivable may be sold, or that it may be sold at all.

As previously stated, the pending transaction with Fremont General is subject to a number of conditions, including completion of satisfactory due diligence, negotiation of a satisfactory definitive agreement, receipt of a fairness opinion, receipt of approval of a majority of PAMM stockholders, regulatory approval and standard conditions such as lack of material adverse changes.

There can be no assurance that the transaction will be completed on the proposed terms, or at all.

Except for historical information contained herein, statements in this news release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks include, among others, risks of inability to sell the interest-only strips receivable at the target price or at all; risks of inability to reach a definitive acquisition agreement or to satisfy all of the conditions of the acquisition agreement; increases in loan delinquencies and defaults; fluctuations in interest rates; increased competition in the lending industry resulting in lower lending rates and/or reduced loan originations; and possible regulatory enforcement actions and legislative action. For more complete information concerning factors which could affect the company's financial results, reference is made to the company's Annual Report on Form 10-K for the year ended Dec. 31, 1997, and other reports filed with the Securities and Exchange Commission.