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SDN BANCORP SIGNS CAPITAL AGREEMENT

 ENCINITAS, Calif., Feb. 8 /PRNewswire/ -- SDN Bancorp, the holding company for San Dieguito National Bank has signed a Capital Augmentation Agreement with SDN Investors Group. Under the terms of this agreement, SDN Investors Group has agreed to acquire $3,500,000 of new SDN Bancorp stock. The per share purchase price of the SDN Bancorp stock will be calculated at the lesser of (i) the book value per share as of Dec. 31, 1992, or (ii) the book value per share as of the closing date of the transaction. It is anticipated the transaction will be completed in July 1993. The Capital Agreement is subject to a number of conditions including the approval of the Federal Reserve Bank.
 "We are very pleased to announce the signing of this Capital Agreement which will provide many benefits to our shareholders, customers and staff," said Paul E. Schedler, president of San Dieguito National Bank. "This capital infusion will provide the base for future growth and profitability."
 Upon completion of this transaction, SDN Investors Group would own approximately 63 percent of SDN Bancorp. SDN Investors Group is a limited partnership with Howard B. Levenson as the general partner. Levenson is the chairman and chief executive officer of Western Financial Corp., a San Diego investment banking firm.
 "All parties to this transaction agree that this capital infusion is a re-commitment to continue to operate San Dieguito National Bank as a community bank under the original goals of its founders," stated Levenson. "We are looking forward to working with the directors to assist the bank in reaching its goals."
 Of the $3.5 million, it is presently contemplated that $2.0 million will be downstreamed into San Dieguito National Bank as additional equity capital. This will result in the bank having an approximate 10 percent Tier 1 risk-weighted capital ratio and a total risk-weighted ratio in excess of 11 percent. These ratios are well in excess of minimum requirements as well as being above the specific ratio requirements of the Office of the Comptroller of the Currency (OCC) in the agreement entered into between the OCC and the bank in September 1992. At Dec. 31, 1992, the bank's Tier 1 risk-weighted capital ratio was 6.9 percent compared to the 6.7 percent by the OCC Agreement. Additionally, the bank has satisfied all of the other requirements under the OCC Agreement as of Dec. 31, 1992.
 Separately and as a part of its first board of directors meeting in 1993, Dr. J. Peter Fitzpatrick was elected chairman of the board. Robert E. Grice resigned the chairman position for personal health reasons. He has served as chairman of the board for the past eight years.
 "Bob Grice has truly provided a great service as chairman and is respected and admired as he continues his other director responsibilities," stated Schedler. "Dr. Fitzpatrick has been a most active and involved member of our board since its founding and his additional services as chairman of the board will also be of great benefit to our bank."
 San Dieguito National Bank has assets of $80.5 million at Dec. 31, 1992. The bank was organized by local businessmen and women more than 12 years ago and is headquartered in Encinitas with additional offices in Carlsbad Village and La Costa.
 -0- 2/8/93
 /CONTACT: Paul E. Schedler, president of SDN Bancorp, 619-436-6888, or 800-736-7362/


CO: SDN Bancorp; San Dieguito National Bank; SDN Investors Group ST: California IN: FIN SU: PER

EH-KJ -- SD006 -- 4333 02/08/93 17:34 EST
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Publication:PR Newswire
Date:Feb 8, 1993
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