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NORTHEAST FEDERAL CORP. ACQUIRES FOUR RHODE ISLAND FINANCIAL INSTITUTIONS

 NORTHEAST FEDERAL CORP. ACQUIRES FOUR
 RHODE ISLAND FINANCIAL INSTITUTIONS
 HARTFORD, Conn., May 8 /PRNewswire/ -- Northeast Federal Corp. (NYSE: NSB), and its wholly owned subsidiary, Northeast Savings, F.A. announced today that Northeast Savings has acquired certain assets of four Rhode Island financial institutions in receivership proceedings. The four failed institutions involved in this transaction are East Providence Credit Union, Providence Teachers Credit Union, Columbian Credit Union, and Greater Providence Deposit Corporation (the "Institutions"). Northeast Savings has acquired approximately $315 million of assets from the failed institutions, and will in turn issue approximately $315 million in insured deposit accounts to the depositors of the institutions.
 On May 11, 1992, Northeast Savings will open and operate seven branch offices in Rhode Island. They are located at 1047 Park Ave., Cranston, and 1062 Centreville Rd., Warwick (formerly Columbian Credit Union offices); 383 Atwood Avenue, Cranston, and 1926 Smith St., North Providence (formerly Greater Providence Deposit Corporation offices); 15 Circle St., Rumford, 999 South Broadway, East Providence, and 3 Crescent View Ave., Riverside (formerly East Providence Credit Union offices).
 George P. Rutland, Northeast Savings' Chairman, commented that, "A great many people have worked very diligently toward this end, and it is therefore extremely gratifying to see the culmination of all their efforts." He continued that, "We have made every attempt possible to ease this transition process for depositors, as they have been without their funds for over 16 months. The people of Rhode Island have warmly welcomed Northeast Savings, and we look forward to sharing with them our knowledge of financial services and our array of banking products."
 The following transactions were also completed in conjunction with the acquisition of the assets of the credit unions:
 Northeast Federal Corp. (the Company) issued and sold to the
 Rhode Island Depositors Economic Protection Corporation
 (DEPCO) approximately $35.2 million of a new class of
 preferred stock, the $8.50 Cumulative Preferred Stock, Series B,
 as well as warrants to purchase 600,000 shares of common
 stock of the Company at $2.50 per share and 200,000 shares of
 the Company's common stock at $4.25 per share.
 The Company issued and sold $28.95 million of 9 percent Sinking
 Fund Uncertificated Debentures, Due in 2012 (the 9 percent
 Debentures) to the receivers for the institutions. These
 debentures have been transferred from the receivers to certain
 depositors in the institutions in partial settlement of their
 deposit claim against the receivership estates. Generally,
 customers with $9,000 or more in one of the institutions will
 receive a debenture from the receiver for that institution equal
 to approximately 10 percent of the amount on deposit.
 The company repurchased its adjustable rate stock, with a face
 amount of approximately $60.1 million, plus accumulated
 dividends of $11.2 million from the FSLIC Resolution Fund
 (FRF) administered by the FDIC for $28.0 million in cash and
 $7.0 million in 9 percent Debentures under the same terms as
 those issued to the depositors. The Company has an option to
 repurchase the 9 percent Debentures from the FRF for $4.5 million
 plus accrued interest within six months of the closing, and an
 additional option to repurchase the 9 percent Debentures from the
 FRF for $4.9 million plus accrued interest within the subsequent
 six months. The debenture issued to the FRF, combined with
 those issued to the receivers, were necessary to repurchase
 the adjustable rate stock held by the FRF.
 Northeast Savings, a subsidiary of Northeast Federal Corp., is one of the largest thrift institutions based in New England, with 158 years of continuous service to its customers. With the addition of these new offices, Northeast Savings has 53 branch offices in Connecticut, Massachusetts, New York, Rhode Island and Southern California.
 -0- 5/9/92
 /CONTACT: George P. Rutland, chairman of the board and chief executive officer, 203-280-1100, or Kirk W. Walters, president, chief operating officer and chief financial officer, 203-280-1183/
 (NSB) CO: Northeast Federal Corp. ST: Connecticut IN: FIN SU: TNM


SH -- NE010 -- 8211 05/08/92 15:55 EDT
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Publication:PR Newswire
Date:May 8, 1992
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