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CITADEL HOLDING REPORTS SECOND QUARTER RESULTS

 GLENDALE, Calif., Aug. 4 /PRNewswire/ -- Citadel Holding Corporation (AMEX: CDL), holding company of Fidelity Federal Bank, FSB, today reported a net loss of $15.2 million, or $2.31 per share (6,595,624 average shares outstanding), for the second quarter ended June 30, 1993. This compares to net income of $4.5 million, or $1.35 per share (3,297,812 average shares outstanding), for second quarter 1992, and $135 thousand or $0.04 per share (3,407,739 average shares outstanding) for first quarter 1993. For the six months ended June 30, 1993, net losses were $15.1 million, or $3.02 per share (5,010,488 average shares outstanding), compared with net earnings of $10.5 million, or $3.19 per share (3,297,812 average shares outstanding), for the comparable period in 1992.
 The second-quarter loss resulted primarily from increased provisions for estimated losses on loans and foreclosed real estate (REO) during the period. Combined loan and REO provisions for the second quarter of 1993 amounted to $30.5 million, compared to $8.5 million for the first quarter of 1993 and $10.0 million for the second quarter 1992. These provisions are the direct result of the higher than expected loss content experienced by the Company as it marketed its REO properties during the second quarter 1993.
 "The additional provisions taken in the second quarter were a necessary and deliberate response by our institution to address the continued negative impact of the depressed real estate market and economy in Southern California," said Richard M. Greenwood, president and chief executive officer.
 The Company maintained its general valuation allowance (GVA) for losses on loans and REO at approximately $75 million, a level unchanged from year-end 1992. At June 30, 1993, total GVA as a percentage of nonperforming assets was 30 percent; GVA for loans as a percentage of nonperforming loans (inclusive of in-substance foreclosed real estate) was 50 percent; and GVA for REO to total REO was 10 percent. Total allowances and write-downs taken against REO as a percentage of REO was 36 percent. At year-end 1992, these same four ratios were 32 percent, 38 percent, 15 percent and 35 percent, respectively.
 Several of the Company's asset performance ratios improved during the second quarter. Delinquency ratios (loans 30 days or more delinquent compared to total assets) are the lowest they have been in the last six quarters. Nonperforming assets (NPAs), which increased from $234.4 million at December 31, 1992, to $271.7 million at March 31, 1993, declined to $253.9 million at June 30, 1993. Further, the share of NPAs represented by nonperforming loans as opposed to REO declined from 48 percent at December 31, 1992, to 47 percent at March 31, 1993, and 38 percent at June 30, 1993.
 While these statistics are encouraging they do not necessarily indicate that the Southern California real estate market has bottomed out and no assurances can be given that these results will continue.
 Net interest income for the second quarter was $26.9 million, and $55.7 million for the first six months of 1993; compared to $35.6 for the second quarter of last year; $70.8 million for the first six months of last year, and $28.8 million for first quarter 1993. The decline primarily reflects a narrowing of the net interest margin and a reduced balance sheet size.
 Other income declined from $1.8 million in the first six months of 1992 to a loss of $12.7 million for the same period of this year. This compares to $0.8 million in the second quarter 1992, $0.5 million in the first quarter 1993, and a loss of $13.2 million for the second quarter 1993, due to higher losses and operating expenses for REOs. Fee income in the second quarter of 1993 was $3.5 million and gains of $3.5 million were recognized from the sale of securities.
 Operating expenses in the second quarter 1993 increased to $22.7 million, up from $21.5 million in the first quarter of this year. For the first six months of this year, operating expenses were $44.2 million, compared to $39.8 million in the first six months of 1992. The increase was due to necessary staffing to identify and manage NPAs, as well as to expand the Company's capabilities to meet the changing retail financial services needs of its customers.
 At June 30, 1993, the Company had tangible capital of 4.6 percent; core capital of 4.6 percent of adjusted assets; and risk-based capital of 10.2 percent. These ratios exceed all current federally mandated capital requirements.
 The Company continues to pursue the strategic options previously announced in June 1993.
 Total assets at June 30, 1993, were $4.5 billion, compared with $4.8 billion at June 30, 1992. Stockholders' equity totaled $239.5 million, or $36.30 per share (6,595,624 shares outstanding) at June 30, 1993, compared to $231.7 million, or $70.25 per share (3,297,812 shares outstanding) at June 30, 1992.
 Citadel Holding's subsidiary, Fidelity Federal Bank, offers a wide range of retail financial products and services through its 42 retail branches and mortgage lending offices throughout Southern California.
 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 Six Months Ended
 June 30, June 30,
 1993 1992 1993 1992
 INTEREST INCOME:
 Loans $68,663 $93,392 $142,001 $194,660
 Mortgage-backed
 securities 2,748 613 6,174 1,278
 Investment securities
 and other 2,268 2,833 3,691 5,818
 Total interest income 73,679 96,838 151,866 201,756
 INTEREST EXPENSE:
 Deposits 31,206 44,274 64,492 95,339
 FHLB Advances 4,814 5,971 9,958 12,190
 Other borrowings 8,885 9,115 18,009 19,745
 Subordinated notes 1,843 1,843 3,686 3,686
 Total interest expense 46,748 61,203 96,145 130,960
 NET INTEREST INCOME 26,931 35,635 55,721 70,796
 Provision for estimated
 loan losses 14,500 7,656 22,000 14,626
 NET INTEREST INCOME
 AFTER PROVISION FOR
 ESTIMATED LOAN LOSSES 12,431 27,979 33,721 56,170
 OTHER INCOME:
 Loan and other fees 1,269 1,842 3,287 3,536
 Gains on sales of loans, net 225 284 620 637
 Gains on sales of
 mortgage-backed 1,543 --- 1,543 ---
 Gains on sales of
 investment securities 1,946 --- 1,946 ---
 Fee income from
 investment prod. 1,313 735 2,966 1,414
 Provision for real
 estate losses (16,000) (2,344) (17,000) (4,374)
 Real estate
 operations, net (4,377) (575) (7,695) (1,156)
 Other income (expense) 890 870 1,678 1,727
 Total other income (13,191) 812 (12,655) 1,784
 OPERATING EXPENSE:
 Compensation 11,102 10,221 22,499 19,052
 Occupancy 3,134 3,310 6,159 6,275
 FDIC insurance 1,886 2,180 3,773 4,360
 Professional services 2,609 1,232 4,264 2,687
 Office-related expense 1,490 1,245 2,861 2,444
 Other general and
 administrative 2,516 2,862 4,631 4,968
 Total operating expense 22,737 21,050 44,187 39,786
 EARNINGS (LOSS) BEFORE
 INCOME TAXES (23,497) 7,741 (23,121) 18,168
 Income tax (benefit) expens (8,252) 3,269 (8,011) 7,641
 NET EARNINGS ($15,245) $4,472 ($15,110) $10,527
 NET EARNINGS PER SHARE ($2.31) $1.35 ($3.02) $3.19
 FINANCIAL DATA FOR THE PERIOD:
 Real estate loans funded $72,502 $80,830 $151,796 $184,656
 Decrease in deposits ($66,103) ($21,685) ($232,389) ($214,459)
 Operating expenses
 to average assets 1.98 pct. 1.73 pct. 1.92 pct. 1.61 pct.
 Operating efficiency
 ratio (1) 74.24 pct. 53.47 pct. 68.75 pct. 50.94 pct.
 Average common and
 common equivalent shares
 outstanding (2) 6,595,624 3,297,812 5,010,488 3,297,812
 FINANCIAL DATA AT END OF THE PERIOD:
 Total assets $4,536,882 $4,821,738
 Total loans and
 mortgaged-backed
 securities $4,009,816 $4,295,048
 General valuation allowance
 to loans, real estate owned
 and in-substance foreclosures 1.86 pct. 1.32 pct.
 Deposits $3,225,529 $3,670,248
 Borrowings $980,401 $799,509
 Subordinated notes $60,000 $60,000
 Stockholders' equity $239,454 $231,667
 Stockholders' equity per share $36.30 $70.25
 Common shares
 outstanding (2) 6,595,624 3,297,812
 FIDELITY FEDERAL BANK REGULATORY CAPITAL RATIOS:
 Tangible capital 4.56 pct. 4.40 pct.
 Core capital 4.62 pct. 4.55 pct.
 Risk-based capital 10.23 pct. 10.10 pct.
 WEIGHTED AVERAGE YIELD FOR THE PERIOD:
 Loans 7.03 pct. 8.64 pct.
 Investments 3.77 pct. 4.44 pct.
 Combined loans and
 investments 6.88 pct. 8.41 pct.
 WEIGHTED AVERAGE COST FOR THE PERIOD:
 Deposits 4.00 pct. 5.19 pct.
 Borrowings 5.77 pct. 7.44 pct.
 Combined deposits and
 borrowings 4.45 pct. 5.65 pct.
 INTEREST RATE MARGIN FOR THE PERIOD 2.43 pct. 2.76 pct.
 EFFECTIVE YIELD FOR THE PERIOD 2.50 pct. 2.93 pct.
 (1) The efficiency ratio is computed by dividing total noninterest expense by net interest income and other income, excluding nonrecurring items and the provision for estimated real estate losses, real estate operations and gains (losses) on sales of securities.
 (2) Average common and common equivalent shares outstanding at June 30, 1992, are shown net of 179,700 shares of Treasury Stock.
 June 30, Mar. 31, June 30,
 1993 1993 1992
 NONPERFORMING ASSETS (NPAs):
 Nonaccruing loans $96,419 $126,349 $108,264
 In-substance foreclosures (1) 23,822 29,639 29,249
 Foreclosed real estate 148,033 126,353 52,298
 REO GVA (14,389) (10,643) ---
 Total NPAs $253,885 $271,698 $189,811
 NPAs to total assets 5.61 pct. 5.72 pct. 3.94 pct.
 NPAs AND TROUBLED DEBT RESTRUCTURINGS (TDRs):
 Total NPAs $253,885 $271,698 $189,811
 Classified TDRs 29,504 38,528 26,488
 Nonclassified TDRs 16,131 12,557 17,308
 Tota NPAs and TDRs $299,520 $322,783 $233,607
 NPAs and TDRs to total assets 6.62 pct. 6.80 pct. 4.84 pct.
 CLASSIFIED ASSETS:
 Total NPAs $253,885 $271,698 $189,811
 Performing loans with
 increased risk 95,975 117,478 73,380
 Real estate held for investment 10,702 10,803 12,341
 Total Classified Assets $360,562 $399,979 $275,532
 Classified assets to total assets 7.97 pct. 8.43 pct. 5.71 pct.
 Net Loan Delinquencies by Property Type:
 Single Family:
 30-59 days $5,507 $1,880 $3,804
 60-89 days 4,013 2,947 3,782
 90 days and over 13,353 15,997 12,278
 22,873 20,824 19,864
 Multifamily (2-4 units):
 30-59 days 1,204 3,427 3,215
 60-89 days 2,004 3,719 1,432
 90 days and over 12,316 10,650 2,298
 15,524 17,796 6,945
 Multifamily (5-36 units):
 30-59 days 5,779 14,170 14,074
 60-89 days 15,293 10,682 11,556
 90 days and over 42,260 53,228 32,120
 63,332 78,080 57,750
 Multifamily (37 units and over):
 30-59 days 2,286 1,620 6,680
 60-89 days --- 9,807 6,185
 90 days and over 13,405 21,812 44,671
 15,691 33,239 57,536
 Commercial & Industrial:
 30-59 days 350 1,248 3,318
 60-89 days --- 458 634
 90 days and over 5,284 6,938 16,897
 5,634 8,644 20,849
 Total Net Loan Delinquencies $123,054 $158,583 162,944
 Total Net Loan Delinquencies to Net
 Loan Portfolio 3.24 pct. 4.05 pct. 3.86 pct.
 -0- 8/4/93
 /CONTACT: Albert J. Clemens, senior vice president and marketing director of Fidelity Federal Bank, 818-549-3630/
 (CDL)


CO: Citadel Holding Corporation; Fidelity Federal Bank, FSB ST: California IN: FIN SU: ERN

CC -- NYON1 -- 9150 08/04/93 05:34 EDT
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