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CITADEL HOLDING CORP. ANNOUNCES RESULTS

 CITADEL HOLDING CORP. ANNOUNCES RESULTS
 Glendale, Calif., Feb. 10, /PRNewswire/ -- Citadel Holding


Corporation, (AMEX: CDL) parent company of Fidelity Federal Bank, FSB, today reported fourth quarter net earnings of $12.3 million or $3.73 per share, compared with net earnings of $4.4 million or $1.32 per share in the fourth quarter of 1990. For the year ended December 31, 1991, net earnings were $2.7 million or $.81 per share, compared with net earnings of $23.3 million or $7.07 per share for the comparable 1990 period.
 The reported earnings reflect the Company's adoption of Statement of Financial Accounting Standard No. 109 ("SFAS 109"). The financial statements have been retroactively restated beginning in 1991 to conform to this standard. This standard generally allows the Company to record deferred income tax benefits related to additions to estimated loan and real estate loss reserves.
 The sharp decline in 1991 from 1990 earnings is primarily due to increased loan loss provisions and, to a lesser degree, increased operating expenses. These factors were partially offset by growth in net interest income.
 The provision for estimated loan and real estate losses was $58.4 million for the year ended December 31, 1991, compared with $12.6 million in the corresponding year ended December 31, 1990. This increase reflects the Company's additions to its general valuation reserves for its loan and real estate portfolios. The Company's ratio of general valuation reserves to loans and real estate owned grew from .32 percent at December 31, 1990 to 1.13 percent at December 31, 1991.
 The Company's ratio of nonperforming assets to total assets increased to 2.43 percent at December 31, 1991 from 1.66 percent at September 30, 1991, and .85 percent at December 31, 1990. William C. Walbrecher, President and Chief Executive Officer, said: "The ongoing uncertainty in real estate markets and the growth of our nonperforming assets are significant concerns. With the national and California economies continuing to put downward pressure on real estate values and our concern about a real estate depression in California, no assurances can be given that further additions to the general or specific valuation reserves will not be necessary in future periods."
 Loans on single and multifamily properties -- which are generally believed to have less credit risk than commercial, industrial or construction loans -- currently total 91.1 percent of the Company's loan portfolio. Adjustable rate mortgages represent 96.3 percent of the Company's loan portfolio. Approximately 91.3 percent of the Company's loan portfolio is comprised of loans secured by California residential real estate. The Company has specialized in California apartment lending and approximately 55.1 percent of the Company's loan portfolio is comprised of such loans.
 Operating expenses for the year ended December 31, 1991 increased $12.0 million, or 18.0 percent over operating expenses for the same period in 1990. The increased expenses included a $3.1 million increase in personnel costs, an increase in operating costs of $1.7 million due to the Company's acquisition of certain branches of two thrift institutions from the Resolution Trust Corporation during the third quarter of 1990, $2.2 million in higher FDIC insurance premiums and a $2.2 million decrease in capitalized costs reflecting a 63.8 percent decline in loan originations from the corresponding 1990 period. Operating expenses were 1.42 percent of average assets in the year ended December 31, 1991, compared with 1.26 percent in the prior year.
 Net interest income increased $27.5 million or 24.0 percent for the year ended December 31, 1991, compared with the year ended December 31, 1990. The increase resulted from a combination of an increase in average interest-earning assets and spread improvement. The effective yield was 2.68 percent and 2.27 percent for the years ended December 31, 1991 and 1990, respectively. At December 31, 1991, the effective yield stood at 2.97 percent compared with 2.15 percent at December 31, 1990. The effective yield is the interest rate margin adjusted for the difference in the balances of interest-earning assets and interest- bearing liabilities.
 At December 31, 1991, the capital ratios at Fidelity Federal Bank were in excess of the current and fully phased-in levels required by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"). At year-end 1991, Fidelity's tangible, core and risk-based capital ratios were 3.86 percent, 4.02 percent and 9.85 percent, respectively; while the minimum requirements were 1.5 percent, 3 percent and 7.2 percent, respectively. However, further regulations on the core capital requirements are being contemplated by the Office of Thrift Supervision ("OTS"). These proposed regulations, if adopted in their current form, will likely increase Fidelity's requirement from 3 percent to at least 4 percent. In order to enhance its capital ratios, the Company has reduced its assets from approximately $5.7 billion at December 31, 1990 to approximately $5.1 billion at December 31, 1991.
 Citadel and Craig Corporation ("Craig") have agreed to restructure an outstanding $15 million loan from Craig to Citadel. The OTS has agreed to permit Fidelity to prepay to Citadel $7.5 million of the $15 million in 12 percent Subordinated Notes held by it. This prepayment will be used to retire one-half of the $15 million loan from Craig. The maturity date of the remaining $7.5 million has been extended to June 30, 1992.
 The Company is presently contemplating issuance of securities, through a rights offering, in the range of $20 - $25 million.
 Mr. Walbrecher announced that Director Jerome A. Forman has submitted his resignation from the Boards of Citadel and Fidelity due to the time demands of his other business obligations and also that Melvin Goldsmith was elected to both boards.
 Citadel's common stock is traded on the American Stock Exchange under the symbol "CDL."
 CITADEL HOLDING CORPORATION AND SUBSIDIARIES
 FINANCIAL HIGHLIGHTS
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Subject to year-end audit)
 (Dollars in thousands, except per share amounts)
 Quarter ended Year Ended
 December 31, December 31,
 1991 (1) 1990 1991 (1) 1990
 Interest Income:
 Loans $115,933 $132,008 $497,005 $494,162
 Mortgage-backed
 securities 2,252 2,864 6,016 6,738
 Investments 3,117 5,283 17,103 25,006
 Total interest income 121,302 140,155 520,124 525,906
 Interest Expense:
 Deposits 62,859 78,926 278,617 287,232
 Borrowings 21,531 31,794 99,400 124,024
 Total interest expense 84,390 110,720 378,017 411,256
 Net Interest Income 36,912 29,435 142,107 114,650
 Provision for estimated
 loan and real estate
 losses 6,000 3,750 58,405 12,615
 Net Interest Income
 After Provision for
 Estimated Loan and
 Real Estate Losses 30,912 25,685 83,702 102,035
 Other Income (Expense):
 Loan and other fees 1,469 985 5,869 3,368
 Gains (losses) on sale
 of loans and
 securities, net 9,734 (1,319) 11,112 (1,541)
 Real estate operations,
 net (710) (441) (2,060) (772)
 Other income (expense) 1,208 972 (1,792) 4,490
 Total other income 11,701 197 13,129 5,545
 Operating Expense:
 Compensation 9,143 7,597 36,293 30,222
 Occupancy 3,208 2,958 12,692 11,371
 FDIC insurance premiums 2,191 1,771 8,680 6,492
 Other general and
 administrative 6,175 5,522 20,852 18,442
 Total operating expense 20,717 17,848 78,517 66,527
 Earnings Before Income
 Taxes 21,896 8,034 18,314 41,053
 Income tax expense 9,618 3,683 15,651 17,734
 Net Earnings $12,278 $4,351 $2,663 $23,319
 Net Earnings Per Share $3.73 $1.32 $0.81 $7.07
 (1) Income tax expense reflects the adoption of SFAS 109.
 Quarter ended Year Ended
 December 31, December 31,
 1991 1990 1991 1990
 Financial Data
 for the Period:
 New real estate loans $83,202 $317,581 $509,265 $1,407,522
 Increase (decrease)
 in deposits ($164,461) $89,979 ($82,781) $650,444
 Operating expenses
 to average assets 1.55 pct. 1.26 pct. 1.42 pct. 1.26 pct.
 Average common and
 common equivalent
 shares
 outstanding (1) 3,297,812 3,297,812 3,297,812 3,298,140
 Financial Data at
 December 31:
 Total assets $5,126,525 $5,697,664
 Total loans and mortgage-
 backed securities $4,583,522 $5,138,323
 General valuation reserve
 to loans and real estate
 owned 1.13 pct. 0.32 pct.
 Deposits $3,884,707 $3,967,488
 Borrowings $871,150 $1,349,166
 Subordinated notes $60,000 $60,000
 Stockholders' equity $221,140 $218,477
 Stockholders' equity
 per share $67.06 $66.25
 Common shares
 outstanding (1) 3,297,812 3,297,812
 Fidelity Federal Bank
 Capital Ratios:
 Tangible capital 3.86 pct. 3.44 pct.
 Core capital 4.02 pct. 3.75 pct.
 Risk-based capital 9.85 pct. 8.42 pct.
 Weighted Average Yield at
 December 31:
 Loans 9.48 pct. 10.37 pct.
 Investments 6.92 pct. 7.92 pct.
 Combined loans and
 investments 9.41 pct. 10.27 pct.
 Weighted Average Cost at
 December 31:
 Deposits 5.91 pct. 7.72 pct.
 Borrowings 7.47 pct. 8.55 pct.
 Combined deposits and
 borrowings 6.21 pct. 7.94 pct.
 Interest Rate Margin at
 December 31 3.20 pct. 2.33 pct.
 Effective Yield for
 the Period 2.68 pct. 2.27 pct.
 (1) Excluding 179,700 shares of Treasury Stock.
 Quarter Ended
 December 31,September 30,December 31,
 1991 1991 1990
 Nonperforming Assets:
 Nonaccruing loans $68,982 $37,603 $30,161
 Restructured loans - - -
 In-substance foreclosures 25,490 31,886 -
 Foreclosed real estate 30,253 21,534 18,307
 Total Nonperforming Assets $124,725 $91,023 $48,468
 Nonperforming assets to
 total assets 2.43 pct. 1.66 pct. 0.85 pct.
 Classified Assets:
 Total Nonperforming
 Assets $124,725 $91,023 $48,468
 Performing loans with
 increased risk 89,099 64,199 31,900
 Real estate held for
 investment 14,516 10,400 14,367
 Other assets 63 63 338
 Total Classified Assets $228,403 $165,685 $95,073
 Classified assets to
 total assets 4.46 pct. 3.02 pct. 1.67 pct.
 -0- 2/10/92
 /CONTACT: Philip R. Sherringham, Executive VP and CFO of Citadel Holding Corp., 818-956-7100/
 (CDL) CO: Citadel Holding Corporation ST: California IN: FIN SU: ERN


KJ -- LA048 -- 8558 02/10/92 20:26 EST
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