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BURRITT REACHES ACCORD WITH FDIC ON CAPITAL, OTHER ISSUES

 BURRITT REACHES ACCORD WITH FDIC ON CAPITAL, OTHER ISSUES
 NEW BRITAIN, Conn., April 10 /PRNewswire/ -- Burritt InterFinancial Bancorporation (NASDAQ: BANQ) announced today that it will be required to reach a six percent capital to asset ratio within one and one-half years, under the terms of an agreement with the Federal Deposit Insurance Corporation. As of Dec. 31, 1991, the bank reported $15.4 million in capital, of 2.57 percent of the bank's total assets. Ultimately, the bank may have to add as much as $19.4 million in new capital to comply with the agreement.
 Bank representatives and the FDIC had been discussing the agreement for some time. Details became available this week, when the FDIC issued a cease and desist order including specific requirements to which the bank had agreed. The order generally requires the bank to take action to address, among other things, management, loss reserves, capital adequacy, loan review and administration, and lending policies.
 The bank is exploring alternatives for meeting the required capital to asset ratio. These include merger or acquisition, sale of stock, collection in cash of previously charged off loans, and the sale of foreclosed real estate. Also, a gradual decrease of the bank's assets is being considered. Late last year, bank officials stated that a merger was being sought. It is likely that more than one alternative will be pursued.
 Capital growth is required in stages: a three percent capital level immediately; four percent in six months; five percent in twelve months; and six percent in eighteen months.
 In addition to the capital requirements, the agreement calls for the bank to take effective action to maintain its core earnings and deal with nonperforming assets. The bank and its regulators share concern over the bank's risk position with respect to loans concentrated in the commercial real estate development industry. Nonperforming assets, consisting largely of foreclosed real estate and commercial real estate loans, stood at $55.7 million at year-end. A plan to reduce such risk is being given high priority.
 The bank's directors have undertaken a management review including the addition of experienced loan workout and distressed real estate specialists to the staff. These new capabilities have already resulted in the successful restructuring of some troubled relationships.
 During the last half of 1991, Burritt increased its allowance for loan and lease losses by more than $18 million, essentially complying with another aspect of the agreement, which calls for periodic review of reserve adequacy. At year-end, the reserve for loan losses stood at $14.7 million. This resulted in a ratio of reserves to nonperforming loans of 62 percent, and a ratio of reserves to nonperforming assets of 26.4 percent. Nonperforming assets amounted to 9.3 percent of total assets. The bank's capital was 2.57 percent of assets.
 -0- 4/10/92
 /CONTACT: Timothy Nadeau, president and chief executive officer of Burritt InterFinancial, 203-225-7601/
 (BANQ) CO: Burritt InterFinancial Bancorporation ST: Connecticut IN: FIN SU:


TS-OS -- NY008 -- 7097 04/10/92 09:33 EDT
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Publication:PR Newswire
Date:Apr 10, 1992
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