[Logo of Commercial Federal Corporation appears here]
NEWS RELEASE
Date: August 15, 2000
Contact: Larry R. Goddard
Investor Relations Department
(402) 390-6553
COMMERCIAL FEDERAL ANNOUNCES STRATEGIC INITIATIVES TO STRENGTHEN EARNINGS
Plan to Restructure Balance Sheet, Strengthen Earnings and Streamline Management
OMAHA, Nebraska, August 15, 2000 - Commercial Federal Corporation (NYSE: CFB),
the parent company of Commercial Federal Bank, a major regional bank with
offices in eight mid-western states, today announced a series of extensive
strategic initiatives including a balance sheet restructuring designed to
strengthen earnings by increasing yield and also reducing risk, and a new
management structure.
COMPREHENSIVE STRATEGY TO DELIVER ENHANCED PERFORMANCE AND SHAREHOLDER VALUe
William A. Fitzgerald, chairman of the board and chief executive officer stated,
"The initial restructuring that began last fall was an important first step in
improving operating efficiencies. It is now essential that we evaluate every
facet of the company's business and move decisively to create a more efficient,
competitive, and profitable regional financial services franchise. Commercial
Federal's management team, unanimously supported by the board, has developed a
comprehensive strategy to deliver enhanced performance and shareholder value."
KEY STRATEGIC INITIATIVES
Initiatives announced by the company include:
o 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. The company projects a pretax restructuring charge of $105-$125
million.
o Accelerate the disposition of other real estate owned. This will result in
a charge of approximately $6 million.
o Sell its under-performing leasing company, which was acquired in February
1998 as part of the Liberty Financial Corporation transaction, in order to
concentrate its efforts on growing its core commercial franchise, with a
resulting charge of approximately $7 million.
o An expansion of 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.
o A management restructuring to further streamline the organization and
improve efficiencies.
o The appointment of a new chief operating officer, which will be announced
within the next 30-60 days.
o A program to further strengthen its commercial lending portfolio by
actively recruiting new lenders in order to accelerate the growth in loans
that we have experienced over the past year, while maintaining credit
quality.
o A thorough assessment of its delivery and servicing systems to ensure the
proper channels to achieve the company's growth potential and to maintain a
high level of customer service.
"From our board to our revitalized executive management team, and to every level
in the company, we are committed to achieving our financial objectives. In the
coming weeks and months, we will regularly communicate our progress to
Commercial Federal's shareholders, and we are confident enhanced shareholder
value will result," Mr. Fitzgerald stated.
The company also announced that the Board of Directors had approved a change in
the company's fiscal year end from June 30 to December 31 effective this year.
"Adopting a December 31 year end will align the company's reporting periods with
most of its peers, thus making financial comparisons easier," said Mr.
Fitzgerald. In addition, the company will reschedule the date of its annual
meeting from November 2000 to the second calendar quarter of 2001 to accommodate
both the 6/30/0 and 12/31/00 close.
Commercial Federal Corporation is the parent company of Commercial Federal Bank,
a $13.8 billion federal savings bank that currently operates 251 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 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.