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PALFED ANNOUNCES O'CONNOR WILL SEEK PERMISSION TO EXCEED 10 PERCENT OWNERSHIP

 AIKEN, S.C., Jan. 7 /PRNewswire/ -- PALFED, Inc. (NASDAQ: PALM) announced today that C. Rodney O'Connor of Aiken, S.C. and New York City has received an option to purchase the remaining 70,000 shares of PALFED stock controlled by Weldon E. Wyatt. Upon exercise of the option O'Connor and his group will own 190,000 shares or about 13 percent of the company. Federal banking regulations require prior Office of Thrift Supervision (OTS) approval before exceeding 10 percent ownership in a publicly held thrift.
 In the recent settlement of a law suit between Weldon E. Wyatt and PALFED, Wyatt agreed to sell all of his stock within a reasonable period of time. Wyatt and his family originally owned about 280,000 shares or approximately 20 percent of the shares outstanding of PALFED, Inc. Of the shares originally owned by Wyatt, O'Connor has purchased 70,000; Fundamental Management, a money management firm of which O'Connor is a director, purchased 50,000 shares; and, 90,000 shares were purchased or optioned by unnamed individuals.
 Albert H. Peters, Jr. Chairman of the Board and President, stated, "It is particularly gratifying that sophisticated investors have purchased stock in our company. We welcome this display of confidence in our management, our operations, and our future."
 O'Connor, a resident of Aiken since 1987, said, "PALFED is the classic example of an undervalued stock in our inefficient market. The company has a unique franchise since it controls over 25 percent of the deposits in Aiken County and is the major lender to home buyers. Impressive market share percentages can also be stated for most of the company's other markets." O'Connor went on to say, "The stock is selling at less than one-half the tangible book value of approximately $18 per share. The company is meeting all of its regulatory requirements which is a major accomplishment in today's environment. Management is young and is highly motivated to facilitate acceptable shareholder returns. I suspect that ownership in the upscale Woodside real estate project has masked the underlying value of the institution and blurred its image. The very successful home and golf course development has yielded over $25 million in revenue since its inception several years ago. However, because of regulatory changes, this project is no longer favorable on a long term basis to PALFED. It seems that divestiture in some fashion could be the best course of action. If and when management chooses such a move, it should be very favorable for stockholders."
 Palmetto Federal, PALFED, Inc.'s primary subsidiary, operates 16 branches in South Carolina. At Sept. 30, 1992, PALFED, Inc. had consolidated assets of approximately $746 million and deposits of approximately $530 million.
 -0- 1/7/93
 /CONTACT: W. Barry Adams of PALFED, Inc., 803-642-1421/
 (PALM)


CO: PALFED, Inc. ST: South Carolina IN: FIN SU:

MM -- CH007 -- 2592 01/07/93 10:48 EST
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Publication:PR Newswire
Date:Jan 7, 1993
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