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Exhibit 99.1
Press Release Dated October 12, 2000
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NEWS RELEASE
For Immediate Release
Contacts: Larry R. Goddard Celia Clinch Ferrel
Investor Relations Media Relations
(402) 390-6553 (402) 390-5333
Commercial Federal Announces Branch Divestitures in Restructuring to
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Strengthen Earnings and Shareholder Value
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Goal to Maximize Total Franchise Growth Potential
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OMAHA, Neb., Oct. 12 -- Commercial Federal Corporation (NYSE: CFB), the parent
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company of Commercial Federal Bank, a major regional bank with offices in eight
mid-western states, today announced a series of branch divestitures as part of
its continuing strategic restructuring to strengthen earnings and shareholder
value.
The divestitures follow an extensive evaluation of markets and branch locations
to ensure that Commercial Federal meets its business goals as a full service
financial provider for consumers and businesses. The branch sales and
consolidations are designed to increase franchise growth potential through
Commercial Federal's strategic business model and delivery systems.
William A. Fitzgerald, chairman of the board and chief executive officer stated,
"These divestitures are a key element in our program to create the most
efficient, competitive, and profitable regional financial services franchise in
our target markets.
"The branches affected are located in markets where Commercial Federal has not
experienced growth," Mr. Fitzgerald explained. "They are marginally profitable
for us now but lack the scale necessary to offer long term growth potential
given our business model and delivery systems. This is not being done to cut
costs. Divesting them will allow us to focus management time and effort and
marketing dollars toward growing our core franchise."
Assisting Commercial Federal as an investment banker is U.S. Bancorp Piper
Jaffray Inc., which will respond to all inquiries from parties interested in
purchasing any of the branches being offered for sale.
In a total of seven states, 12 branches will be consolidated and 37 will be
sold. The branches that will be offered for sale employ approximately 220
employees and have total deposits of approximately $464 million. The company
took a one time after-tax charge of $15.4 million in the quarter ended September
30 related to facilities closing costs and intangibles.
It is expected that employees affected by the divestitures will be offered
employment at the acquiring banks, transferred to other Commercial Federal
branches, or assisted by Commercial Federal in securing new employment. Minimal
employee displacement and resulting severance are expected from the
divestitures.
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Improved growth potential
"It is important to make two points," Fitzgerald emphasized. "First, we are
grateful for the contributions of our customers and employees to Commercial
Federal, and we are making every effort to make this a smooth transition for
each and every one of them.
"Second, this step to improve operational efficiency and growth potential,
together with other decisive strategic initiatives now underway, will provide
long-term value for Commercial Federal's shareholders."
Additional operational and staff restructurings to increase efficiencies by
yearend
The company will announce additional operational and staff restructurings
designed to increase efficiencies.
Other key strategic initiatives
Initiatives previously announced by the company include:
. A complete review of the balance sheet, headed by Commercial Federal's new
Chief Financial Officer David Fisher, including the potential disposition
of over $2 billion in low-yielding and higher risk investments and
residential mortgage loans as well as paying off high cost borrowings. This
will result in a smaller balance sheet with less risk and strengthened
earnings;
. Accelerate disposal of real estate owned;
. Expanding the stock buy-back program by up to 10 percent of the outstanding
shares, or approximately 5.5 million shares, to enhance the company's
return on equity; and
. The appointment of a new chief operating officer and additional management
restructuring to further streamline the organization and improve
efficiencies.
"The board and management of Commercial Federal are united in our commitment to
maximize financial performance and shareholder value. We will continue to
communicate to shareholders our progress as we implement our strategic plan and
achieve its results," Mr. Fitzgerald stated.
Commercial Federal Corporation is the parent company of Commercial Federal Bank,
a $13.8 billion federal savings bank that currently operates branches located in
Iowa, Colorado, Nebraska, Kansas, Oklahoma, Missouri, Arizona and Minnesota.
Commercial Federal operations include consumer and commercial banking, mortgage
banking, agricultural lending, insurance and investment services, and Internet
banking.
Certain statements contained in this release are forward-looking in nature.
These statements are subject to risks and uncertainties that could cause
Commercial Federal's actual results or financial condition to differ materially
from those expressed in or implied by such statements. Factors of particular
importance to Commercial Federal include but are not limited to changes in
general economic conditions, and price levels and conditions in the public
securities markets generally.
