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PALFED ANNOUNCES SPECIAL PROVISIONS FOR LOAN ALLOWANCES AND VALUE OF WOODSIDE PLANTATION

 AIKEN, S.C., July 1 /PRNewswire/ -- PALFED, Inc. (NASDAQ-NMS: PALM) announced today that its subsidiary, Palmetto Federal Savings Bank of South Carolina, expects a second quarter provision for estimated loan losses of approximately $3.5 million. The provision relates to management's initiation of a strategy to manage more aggressively certain nonperforming loans, real estate owned, and restructured loans.
 In conjunction with its ongoing corporate strategic planning process, PALFED also announced that it is exploring various alternatives for the disposition of Woodside plantation, including a possible sale of the entire Woodside project. A sale of the entire project would likely result in a sales price that is lower than the current carrying value of the project, which assumes the continued sale of developed homesites in accordance with PALFED's historical marketing strategy. As a result, PALFED is immediately reducing the carrying value of its investment in Woodside Plantation, by approximately $4.0 million, which reflects management's current estimate of the charge to earnings that would be realized upon such a sale in the current market. Over the past 7 1/2 years Woodside lot sales have produced sales revenues of approximately $33 million for the subsidiary.
 As a result of these $7.5 million provisions the company anticipates reporting an estimated loss of approximately $4.7 million or $3.15 per share for the second quarter 1993 and $4.4 million or $2.95 per share for the six months ended 6/30/93.
 Although management anticipates that the reduction in the carrying value of the Woodside Plantation project and the addition to the loan loss provision will cause Palmetto Federal to temporarily fail its risk based regulatory capital requirement as of June 30, 1993, management further anticipates it will pass and exceed fully phased in capital requirements upon successful completion of its proposed rights offering. Final determination of the banks' regulatory capital cannot be made until results of the second quarter are available. The bank exceeds, and is expected to continue to exceed, current core and tangible capital requirements as prescribed by the regulators.
 PALFED, Inc., is a South Carolina corporation whose principal subsidiary, Palmetto Federal Savings Bank of South Carolina, is a federally chartered stock savings bank. Palmetto Federal operates 14 full service banking offices in western and southern South Carolina. Palmetto Federal also operates two limited service retail branches and four mortgage lending offices. At March 31, 1993, PALFED had consolidated assets of $704.5 million and deposits of $502.2 million.
 -0- 7/1/93
 /CONTACT: Darrell R. Rains, Executive Vice President and Chief Financial Officer, PALFED, Inc., 803-642-1328/
 (PALM)


CO: PALFED, Inc.; Palmetto Savings Bank of South Carolina ST: South Carolina IN: FIN SU: ERP

CM -- CH009 -- 7764 07/01/93 13:02 EDT
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Date:Jul 1, 1993
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