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    Contacts:  Chemical Bank           Margaretten Financial
           Judy Walsh                  Bruce Schnelwar
           (212) 270-2914              Executive Vice President & CFO
                                       (908) 324- 4183
           Ken Herz
           (212) 270-4621              Morgen-Walke Associates
                                       Michelle Katz
                                       (212) 850-5629


                                       For Immediate Release
                                       Thursday, May 12, 1994

         New York, May 12 -- Chemical Bank, National Association, a wholly-
    owned bank subsidiary of Chemical Banking Corporation, and Margaretten
    Financial Corporation today announced that they have signed a
    definitive agreement for Chemical to acquire all the outstanding common
    shares of Margaretten for approximately $330 million.

         Under the terms of the agreement, which has been approved by the
    boards of directors of both companies, a subsidiary of Chemical will
    begin a cash tender offer no later than May 18, 1994 for all
    outstanding shares of common stock at $25 per share, and all
    outstanding depositary shares representing 8 1/4% Cumulative Preferred
    Stock, Series A at $25 per depositary share, plus accrued and unpaid
    dividends.  The tender offer will be conditioned on, among other
    things, a minimum of 80% of the outstanding Margaretten common shares
    being validly tendered and not withdrawn.

         Following completion of the tender offer and receipt of any
    necessary shareholders' approval, remaining shares of common stock and
    depositary shares representing preferred stock not purchased in the
    tender offer will be acquired in a merger at the same prices.  The
    transaction is subject to certain regulatory approvals.

         Upon completion of the transaction, which is expected at mid-year,
    Chemical will rank fourth nationwide in mortgage originations with a
    volume of approximately $26.3 billion, based on 1993 figures, and will
    rank fifth in mortgage servicing.   Based on March 31, 1994 figures,
    the combined servicing volume will be $54.5 billion.

         "Chemical views mortgage banking as a critical element of its
    nationwide retail financial services strategy," said Michael Hegarty,
    Chemical's senior executive vice president in charge of retail banking. 
    "Our goal is to make Chemical the leading choice for a full range of
    financial services among consumers nationwide.

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         "Chemical and Margaretten are two outstanding institutions with
    complementary strengths.  This transaction will expand our retail
    mortgage network serving realtors and builders, increase our
    penetration in existing markets and enhance our ability to serve the
    communities in which we do business.

         "In the rapidly consolidating mortgage business, firms with the
    critical mass to achieve economies of scale are best prepared to take
    advantage of growth opportunities," Hegarty continued.  "The
    efficiencies created by this transaction will enable us to accelerate
    our plans to build a more comprehensive nationwide presence.

         "By leveraging technology and capital strength, we can continue to
    offer attractive pricing and outstanding credit quality and service
    quality, while Margaretten clients will gain access to an expanded
    product line, including jumbo mortgages and ARMs and low - to moderate-
    income-oriented products.  At the same time, we will be able to take
    advantage of the excellent fee revenues that stem from the servicing
    end of the business."

         Chemical and Margaretten are both currently leaders in the
    mortgage business nationwide.  The transaction will create a new
    organization in which origination volume will be in balance with
    servicing potential.  In 1993, Chemical had originations of $14.7
    billion and servicing volume of $36.4 billion.  It has 19 retail
    offices and 24 wholesale offices in 20 states.  Margaretten & Co., Inc.
    had originations of $11.6 billion and servicing volume of $15.6
    billion.  It has 78 retail offices and 11 wholesale offices in 25
    states nationwide.  At March 31, 1994, Chemical's servicing volume was
    $38.6 billion and Margaretten's servicing volume was $15.9 billion.

         Felix M. Beck, chairman and chief executive officer of Margaretten
    Financial Corporation, commented, "We believe this transaction provides
    our shareholders with the enhanced value we have been seeking since our
    initial public offering in January 1992.  Our company when joined with
    Chemical will be able to provide a broad array of financial products to
    better serve our customers."

         Lehman Brothers Inc. has advised Chemical in this transaction. 
    Goldman, Sachs & Co. has advised Margaretten in this transaction. 
    Lehman Brothers Inc. and Chemical Securities Inc., an affiliate of
    Chemical, will serve as dealer managers for the tender offer.

         Chemical Banking Corporation is a worldwide banking organization
    with $164.2 billion in assets and nearly $11 billion in equity.  It is
    the fourth largest bank holding company in the United States, with
    major franchises in key regional, national and global markets.  

         Margaretten Financial Corporation, located in Perth Amboy, New
    Jersey, is the parent company of one of the nation's leading mortgage
    banking firms, Margaretten & Company, Inc.  Its primary business is the
    origination, purchase, sale and servicing of residential mortgage
    loans.  Its retail division has 78 branches and satellite offices in 21
    states and its wholesale division operates primarily in California, the
    Pacific Northwest, Arizona, Georgia and Ohio.

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