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REGULATORY AGREEMENT, RECAPITALIZATION STUDY, BRANCH REDUCTION PLAN ANNOUNCED BY FIRST CONSTITUTION FINANCIAL

 REGULATORY AGREEMENT, RECAPITALIZATION STUDY, BRANCH
 REDUCTION PLAN ANNOUNCED BY FIRST CONSTITUTION FINANCIAL
 NEW HAVEN, Conn., March 10 /PRNewswire/ -- First Constitution Financial Corporation (NASDAQ: FCON) said the board of directors of its subsidiary, First Constitution Bank, consented to the issuance of a cease and desist order by the Federal Deposit Insurance Corporation (FDIC). The company also retained Rothschild, Inc., for consultation on strategies for a possible recapitalization, and has decided to consolidate its branch network in Fairfield County, according to John J. Crawford, president and chief executive officer.
 "A major component of the regulatory order is improvement of the bank's capital position. The order specifies a target goal of 4.0 percent for the Tier 1 capital-to-assets ratio, to be achieved by Dec. 31, 1992, with interim goals to be reached in the meantime," he explained. The bank's Tier 1 ratio was 3.15 percent at the end of 1991. As stated in the regulatory order, the Tier 1 capital- to-assets ratio represents shareholders' equity divided by assets, both at the end of a period.
 "Let me emphasize that the regulatory action announced today does not affect deposit account insurance for our customers," Crawford said. "Accounts at First Constitution Bank will continue to carry FDIC insurance exactly as they have in the past.
 "The regulatory order also includes developing a capital and profit plan, filing a management plan and revising certain policies regarding loans, classified assets and reserves," he added. "Regulatory approval will be needed before the bank may pay or declare dividends to the parent company, and progress reports on compliance with the order will continue to be submitted."
 Crawford said First Constitution has retained Rothschild, Inc., investment bankers, to consult with management in exploring ways to recapitalize the business to restore it to profitability.
 The bank's Fairfield County branches will be consolidated from seven locations to two by the summer of 1992, assuming regulatory approval, Crawford explained. Offices in the communities of Stamford (2), Darien (1), New Canaan (1), and Fairfield (1) will be closed. Accounts and service for customers of these branches will be consolidated at two other Fairfield County locations that are remaining open -- at 56 West Broad St. in Stamford and 1177 Post Rd. in Fairfield.
 "The decision to consolidate in Fairfield County results from an internal analysis of market shares and profit potential of all branches in our system," Crawford commented. "In the future, we intend to focus our resources on our remaining 16 branches, most of which are located in our traditionally stronger market areas in the city of New Haven and throughout New Haven County.
 "More and more, we see that customer retail banking activity occurs quite differently now than in past years," Crawford observed. "Through use of bank-by-mail, 800 telephone numbers, automatic teller machines, direct deposit and automatic debiting of mortgage payments, many customers find they visit a bank much less frequently. By these means, along with our fully staffed Customer Information Center and the offices remaining open in Stamford and Fairfield, we have every intention of maintaining strong service for all Fairfield County customers.
 "We have been deeply involved in broad-scale studies of all aspects of our business to determine those moves that will best improve our capital, identify a more flexible range of management options in the current period of difficult business conditions, and position our company to take better advantage of an improved economy when it occurs," he said.
 Federal and state regulators have been notified of the plan to consolidate the branches. Customers of each office are now being contacted with information about how their business will be handled in the future.
 When the branch-office consolidation is complete, First Constitution's employment rolls will be reduced by about 20 people. "These individuals will be offered severance pay, outplacement services and benefits extension," Crawford emphasized.
 First Constitution Bank is a state-chartered, FDIC-insured savings institution. First Constitution Financial Corporation common stock is traded on the NASDAQ stock market, where the trading symbol is FCON. At Dec. 31, 1991, there were 10,956,519 shares outstanding.
 -0- 3/10/92
 /CONTACT: John Rourke of First Constitution, 203-782-4570/
 (FCON) CO: First Constitution Financial Corporation ST: Connecticut IN: FIN SU:


EG-TM -- NE013 -- 7015 03/10/92 15:58 EST
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Date:Mar 10, 1992
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