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REGULATORS APPROVE CALIFORNIA FEDERAL BANK CAPITAL PLAN, WITHDRAW INDIVIDUAL MINIMUM REQUIREMENT

 REGULATORS APPROVE CALIFORNIA FEDERAL BANK CAPITAL PLAN,
 WITHDRAW INDIVIDUAL MINIMUM REQUIREMENT
 LOS ANGELES, Calif., Aug. 27 /PRNewswire/ -- California Federal Bank, FSB, the principal subsidiary of CalFed Inc. (NYSE: CAL), said today that the Office of Thrift Supervision (OTS) has approved the bank's revised capital plan.
 Concurrently, the OTS formally withdrew its November 1991 proposal of an Individual Minimum Capital Requirement (IMCR) under which the bank would have been required to raise $375 million in new capital by June 1992. The proposal was never finalized by the OTS.
 The capital plan, submitted to the OTS for approval in July 1992, calls for the bank to achieve core and risk-based capital ratios of 5.0 percent and 9.0 percent, respectively, by June 30, 1993. The plan also specifies that the bank reach a 10.0 percent risk-based capital ratio by Jan. 1, 1995.
 "Regulatory approval of the bank's capital plan is a milestone which brings us a vital step closer to achieving the remainder of our restructuring objectives," said Jerry St. Dennis, chairman of California Federal Bank.
 In approving the plan, the OTS specified that the bank must meet interim minimum capital ratios of 4.0 percent core and 8.0 percent risk-based capital at Dec. 31, 1992, and March 31, 1993. Regulators also advised the company that a material failure to comply with the capital plan may result in regulatory sanctions, the company said. The bank's board of directors has formally accepted the OTS' conditions of approval.
 "Both the interim and June 1993 capital goals are demanding, but they are attainable," St. Dennis said. "Having these clearly defined, approved targets eliminates much of the uncertainty that has plagued us and our investors for the past nine months."
 Currently, California Federal Bank's capital ratios continue to exceed regulatory capital requirements. At June 30, 1992, the bank's tangible, core and risk-based capital ratios were 2.96 percent, 4.00 percent and 7.49 percent, respectively, above the corresponding regulatory requirements of 1.50 percent, 3.00 percent and 7.20 percent.
 The bank said that the regulatory approval of its capital plan also means that the bank's parent company, CalFed Inc., can proceed with its exchange offer for CalFed Inc.'s $125 million in convertible subordinated debentures.
 The company is now completing registration documents for the securities to be issued in the exchange offer and expects to disclose the proposed terms of the transaction during the first week of September 1992. The company said the OTS will require the completion of the exchange offer by Dec. 31, 1992, and that a failure to complete the exchange transaction by that date may result in a renewed individual minimum capital requirement.
 The company said the exchange offer is a major component of the bank's capital plan. Through it, the company expects to meet the interim capital ratios required of the bank by the OTS at Dec. 31, 1992. "A successful exchange offer is essential to achieving our capital requirements," St. Dennis said.
 California Federal Bank, FSB, the nation's fifth-largest savings institution, provides retail banking services and home mortgage loans through 171 branches in California, Florida, Nevada and Georgia.
 -0- 8/27/92
 /CONTACT: James F. Hurley, 213-930-9750, or Frank W. Moore, 213-932-4203, both of CalFed/
 (CAL) CO: California Federal Bank; CalFed Inc. ST: California IN: FIN SU:


JB-JL -- LA019 -- 3970 08/27/92 13:24 EDT
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Publication:PR Newswire
Date:Aug 27, 1992
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