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CHARTER FEDERAL ANNOUNCES DECISION OF AND RESPONSE TO U.S. SUPREME COURT

 BRISTOL, Va., March 30 /PRNewswire/ -- Charter Federal (NASDAQ: CHFD) announced today that the U.S. Supreme Court denied the Savings Bank's request for review of an adverse decision by the Court of Appeals in its lawsuit against the Office of Thrift Supervision ("OTS") and the Federal Deposit Insurance Corporation ("FDIC"). The suit by Charter Federal was brought to compel the OTS and the FDIC to honor contractual agreements made in several supervisiory acquisitions and to allow Charter Federal to include supervisory goodwill for regulatory capital purposes.
 As a result of the Supreme Court's decision, the Savings Bank could be subject to a range of regulatory actions due to its current capital position. The possible regulatory actions include among other things, the imposition of a capital directive requiring Charter Federal to achieve a specified capital level by a specified date or the appointment of a conservator or receiver for the Savings Bank. At Dec. 31, 1992, excluding supervisory goodwill, Charter Federal had a tangible capital deficiency of $25.4 million, a core capital deficiency of $29.1 million and a risk-based capital deficiency of $39.6 million. The Savings Bank's savings accounts remain insured up to $100,000 by the FDIC through the Savings Association Insurance Fund.
 "While we are, of course, disappointed by the Supreme Court's decision, we have had under review various recapitalization alternatives. We look forward to pursuing a plan that would restore Charter Federal to compliance with all regulatory capital requirements, and we are enthusiastic about the Savings Bank's future after the plan's goals have been achieved. We anticipate making a further announcement by Friday, April 2 regarding our plans for recapitalization," said Robert J. Bartel, Chairman of the Board. "We are optimistic that the OTS will afford us a reasonable opportunity to implement a recapitalization plan before taking any further regulatory action against Charter Federal based upon its current capital position," he said.
 Charter Federal, which began operation in 1920, is a federally- chartered stock savings bank headquartered in Bristol, Va., with 26 offices throughout Southwest and Southside Virginia and the Knoxville, Tenn. area. At Dec. 31, 1992, Charter Federal had total assets of $745 million, total deposits of $591 million and total stockholders' equity of $27 million.
 -0- 3/30/93
 /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:

SB -- CH006 -- 1045 03/30/93 12:18 EST
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Publication:PR Newswire
Date:Mar 30, 1993
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