CHARTER FEDERAL ANNOUNCES AGREEMENT WITH OTS AND SETS ANNUAL STOCKHOLDERS' MEETING DATE
CHARTER FEDERAL ANNOUNCES AGREEMENT WITH OTS
AND SETS ANNUAL STOCKHOLDERS' MEETING DATE
BRISTOL, Va., Nov. 1 /PRNewswire/ -- Charter Federal (NASDAQ: CHFD) announced today that, after negotiations with the Office of Thrift Supervision ("OTS"), Charter Federal and the OTS agreed to execute an agreement which calls for Charter Federal to, among other things, implement plans for the reduction of the level of classified assets, revise its general valuation allowance ("GVA") policy and procedures, devise a plan for the reduction of interest rate risk and revise its policy for the management of interest rate risk. As a result, Charter Federal will be recoding additional GVAs of $6.9 million and additional specific loss reserves of $4.5 million as of June 30, 1991. Primarily due to the foregoing additional general and specific loss reserves, Charter Federal will be reporting a net loss for the year ended June 30, 1991 of $13.4 million or approximately $3.67 per share on 3,656,297 shares outstanding.
E.L. Byington, Jr., Chairman of the Board and Chief Executive Officer of Charter Federal, said, "The Board of Directors concluded that the agreement reached with the OTS was preferable to engaging in a potentially time-consuming and expensive dispute with the regulators concerning the issues covered by the agreement. Now we will be able to finalize our financial results for the year ended June 30, 1991 and move ahead."
On Aug. 16, 1991 Judge Glen Williams, U.S. District Judge, Abingdon, Va., ruled in a lawsuit brought by Charter Federal against the OTS and Federal Deposit Insurance Corporation ("FDIC") that the merger agreements between Charter Federal and the government entered into in 1982 and 1985 constituted binding contracts, and that those contracts allowed Charter Federal to treat the supervisory goodwill acquired pursuant to the mergers as an asset for regulatory capital purposes. The Court further determined that any agency enforcement action that breaches these contracts, and which would substantially burden Charter Federal's operation, would rescind the contracts. The OTS and FDIC have appealed the ruling to the U.S. Court of Appeals for the Fourth Circuit.
Charter Federal also announced that the Board of Directors has set Jan. 9, 1991 as the date of Charter Federal's next annual meeting of shareholders.
Charter Federal, which began operation in 1920, is a federally- chartered stock Savings Bank headquartered in Bristol, Va. with 29 branch offices throughout Southwest and Southside Virginia and East Tennessee.
/CONTACT: Douglas D. Deppen, Senior Vice President and Chief Financial Officer, Charter Federal Savings Bank, 703-669-5101/
(CHFD) CO: Charter Federal Savings Bank ST: Virginia IN: FIN SU: CM -- CH021 -- 0384 11/01/91 16:31 EST