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NORTHEAST FEDERAL CORP. ANNOUNCES AGREEMENT TO SELL NON-PERFORMING ASSETS

 HARTFORD, Conn., Aug. 16, /PRNewswire/ -- Northeast Federal Corp. (NYSE: NSB), the holding company for Northeast Savings, F.A., announced today that it has reached an agreement to sell $30.5 million of residential real estate acquired in settlement of loans (REO) to a major investment banking firm. The transaction is expected to close prior to the end of August.
 George P. Rutland, chairman of the board and chief executive officer stated, "The company has taken a major step in putting our asset quality problems behind us. The sale of these REO properties will reduce the level of non-performing assets and thereby should benefit the company by increasing net interest income and eliminating the costs associated with managing these properties."
 During the quarter ended June 30, 1993, the company recorded a $6 million provision for loss in anticipation of the sale. Third quarter earnings will only be marginally impacted as the sale will result in an additional pre-tax loss of approximately $750,000.
 On a pro forma basis as of June 30, 1993, the sale will reduce the company's non-performing assets to 3.84 percent of total assets, down from 4.45 percent. The REO included in the sale are residential properties primarily located in the state of California.
 Northeast Savings is one of the largest thrift institutions based in New England, with nearly 160 years of service to its customers. Northeast Savings operates 52 retail branches in New York, Connecticut, Massachusetts, Rhode Island and southern California, and has mortgage lending offices in Greenwich, Conn.; Denver; Portland, Oregon; and San Diego.
 -0- 8/16/93
 /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.; Northeast Savings, F.A. ST: Connecticut IN: FIN SU:

DJ -- NE021 -- 3156 08/16/93 14:26 EDT
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Publication:PR Newswire
Date:Aug 16, 1993
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