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GLENDALE FEDERAL BANK TO FILE AMENDMENT TO CAPITAL RESTORATION PLAN

      GLENDALE FEDERAL BANK TO FILE AMENDMENT TO CAPITAL RESTORATION PLAN
         GLENDALE, Calif., June 25 /PRNewswire/ -- GLENFED Inc.
     (NYSE: GLN) announced today that its primary subsidiary, Glendale
     Federal Bank, has agreed with the Office of Thrift Supervision (OTS)
     to file an amendment to the bank's capital restoration plan,
     submitted June 1, 1992.  The amendment will provide for the bank to
     achieve regulatory capital ratios of 5 percent core capital and
     10 percent risk-based capital by June 30, 1993.  As of March 31,
     1992, Glendale Federal Bank's core and risk-based capital ratios were
     3.10 percent and 6.87 percent, respectively.
         Under proposed amendments to the OTS capital regulations, the
     core capital requirement for most savings associations would be
     increased to between 4 percent and 5 percent, based on the individual
     association's risk profile as determined by the OTS.  Following the
     submission of Glendale Federal Bank's original capital plan, the OTS
     advised the bank that its current risk profile requires core capital
     at the upper end of this range.  The OTS also advised the bank that a
     corresponding increase in its risk-based capital to the 10 percent
     level would be required.
         Stephen J. Trafton, chairman and chief executive officer of
     GLENFED and Glendale Federal Bank, stated,  "Our agreement to file
     this amendment to our capital plan marks an important milestone in
     reducing regulatory uncertainties.  These uncertainties have
     adversely affected the bank's ability to plan for its future
     throughout the nearly two years since the other banking agencies
     adopted, and the OTS later proposed, a variable core capital
     requirement.  While attainment of the 5 percent core and 10 percent
     risk-based capital objectives presents a formidable challenge for the
     bank, we now know what the OTS expects of us.  Perhaps more
     importantly, we are encouraged that the OTS has indicated that we
     have a full year in which to accomplish this task."
         Trafton cautioned that the OTS has made no commitment to approve
     the bank's amended capital plan, but has agreed only on the capital
     objectives and timing that the agency would consider acceptable.
         "Moreover", Trafton added, "resolution of this regulatory
     uncertainty does nothing to change the economic uncertainties that
     continue to jeopardize the ability of the bank to achieve these
     formidable capital objectives.  In order to succeed in raising the
     capital necessary to satisfy these capital ratios, the California
     economy and real estate markets must improve sufficiently to persuade
     potential investors that new capital will not be dissipated by
     further losses from the bank's existing real estate and loan
     portfolios."
         Glendale Federal Bank anticipates that in order to attain the
     5 percent core capital ratio, it will be necessary to restructure
     presently outstanding subordinated indebtedness and to raise
     additional equity capital from GLENFED's existing stockholders and
     new investors.  The increase in core capital, coupled with a
     continuation of the balance sheet restructuring activities that have
     been a fundamental aspect of the bank's strategic plan for the past
     18 months, is expected to be sufficient to attain the 10 percent
     risk-based capital objective to be included in the amended capital
     plan.
         GLENFED Inc., the parent company of Glendale Federal Bank,
     provides community banking services through 214 bank offices in
     California, Florida and Washington.
         -0-                     6/25/92
         /CONTACT:  Judy Cunningham, 818-500-2274, or Rosanne O'Brien,
     818-500-2824, both of GLENFED/
         (GLN)
     CO:  GLENFED Inc.; Glendale Federal Bank
     ST:  California
     IN:  FIN
     SU: KJ -- LA008 -- 3783 06/25/92 12:43 EDT
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Publication:PR Newswire
Date:Jun 25, 1992
Words:565
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/C O R R E C T I O N -- GLENDALE FEDERAL BANK/

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