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AMBASE AND KOHLBERG & CO. SIGN LETTER OF INTENT FOR CARTERET SAVINGS BANK RECAPITALIZATION

 AMBASE AND KOHLBERG & CO. SIGN LETTER OF
 INTENT FOR CARTERET SAVINGS BANK RECAPITALIZATION
 GREENWICH, Conn., July 20 /PRNewswire/ -- AmBase Corporation (NYSE: ABC) and Kohlberg & Co. announced today that they have executed a letter of intent for a group of private investors led by Kohlberg & Co. to invest $200 million in Carteret Savings Bank, AmBase's principal operating subsidiary. Following the recapitalization, Carteret Savings Bank will meet the fully phased-in capital requirements of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"). The recapitalization will be done without regulatory assistance.
 Kohlberg & Co.'s investment is conditioned upon satisfactory completion of both due diligence and an OTS/FDIC exam which is currently underway and customary closing conditions, including execution of a definitive agreement with AmBase, satisfactory agreements with the bank's chairman and vice chairman, and required regulatory and corporate approvals. The letter of intent gives Kohlberg & Co. certain rights, including a 60 day period within which to complete its due diligence work and negotiate a definitive agreement with AmBase.
 The letter of intent provides AmBase with a residual equity interest in Carteret of 10 percent on a primary basis. In addition, AmBase will make an investment in Carteret by participating with the Kohlberg group. AmBase's obligation is conditioned upon customary closing conditions, including execution of a definitive agreement and receipt of requisite regulatory and corporate approvals. The board of directors of AmBase has instructed management to satisfactorily resolve all outstanding regulatory issues and liability claims.
 "We are obviously pleased by today's announcement," stated Richard A. Bianco, president and chief executive officer of AmBase and chairman, president and chief executive officer of Carteret. "During the past six months our energies have been focused on discussions with various investor groups that had a genuine interest in the Bank. One of our primary goals has been to identify those investors who recognize the inherent strength and value of the Carteret franchise. Kohlberg & Co., a premier investment group, is the type of quality investor we are proud to have lead the Carteret recapitalization."
 James Kohlberg of Kohlberg & Co., said, "Carteret is an excellent institution. The bank has a strong retail branch network, extensive mortgage banking operations and a highly qualified management team as evidenced by the stability it has shown during its recent difficulties."
 Carteret implemented a restructuring plan a year ago. At the time, the bank had just added $150 million to its reserves for losses on loans and real estate. As a result of the significant increase in the provision for losses on loans and real estate, Carteret failed to meet all of the capital requirements of FIRREA. The bank took a number of steps to return to profitability, including a significant reduction in operating expenses, an aggressive approach to the workout of problem loans and staff reductions.
 Carteret has now been profitable for three straight quarters and has generated a pretax profit in each of the past ten months. Its basic operating businesses are performing well. Carteret is the leading originator of residential mortgages among banks in New Jersey. It is also a recognized leader in special programs which make home ownership more affordable for low, moderate and middle income households. The Bank has a highly efficient mortgage servicing operation in Clearwater, Fla., and ranks tenth in the nation among thrifts in servicing mortgages for others. Deposits at the bank's 41 offices, located primarily in New Jersey and Florida, total $2.7 billion. In addition, Carteret owns Imperial Premium Finance, Inc., headquartered in Sherman Oaks, Calif., the nation's third largest insurance premium finance company. Carteret has total assets of $5.2 billion making it one of the largest thrift institutions in the United States.
 "I thank the good people of Carteret, Kohlberg & Co. and their partners, the Office of Thrift Supervision, the FDIC, and our investment bankers who have worked hard to put the bank on a proper course for its recapitalization program, which is unassisted by the federal government," stated Bianco. "We are pleased with our progress and gratified that the investor group led by Kohlberg & Co. has chosen to work with Carteret."
 There can be no assurance that the above transaction, some modification thereof, or some other plan which preserves shareholder value will be successful.
 -0- 7/20/92
 /CONTACT: Neil L. Cohen, executive vice president and chief financial officer of AmBase, 203-532-2015/
 (ABC) CO: AmBase Corp.; Kohlberg & Co.; Carteret Savings Bank ST: Connecticut, New Jersey IN: FIN SU: RCN


SH -- NY009 -- 0572 07/20/92 08:52 EDT
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Publication:PR Newswire
Date:Jul 20, 1992
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