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[COMMERCIAL FEDERAL LETTERHEAD]
Date: March 31, 2005
Contacts: COMMERCIAL FEDERAL WELLS FARGO
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Hal A. Garyn Bob Strickland
Investor Relations Director Investor Relations
(402) 514-5336 (415) 396-0523
Celia Clinch Ferrel
Manager of Corporate Communications
(402) 514-5333
COMMERCIAL FEDERAL TO SELL MORTGAGE SERVICING BUSINESS
OMAHA, Neb. -- March 31, 2005 - Commercial Federal Corporation (NYSE:
CFB) today announced it has executed a definitive agreement to sell its $10
billion national third party mortgage servicing portfolio and correspondent
mortgage origination network to Wells Fargo Bank, N.A., a subsidiary of Wells
Fargo and Company (NYSE:WFC). Commercial Federal will continue to offer a full
line of mortgage loan products and services to consumers in its seven-state
market area of Nebraska, Colorado, Iowa, Missouri, Kansas, Oklahoma and Arizona.
"The strategic decision to exit third party mortgage servicing will
further focus Commercial Federal's business model on growing our very successful
core banking franchise," said William A. Fitzgerald, chairman and chief
executive officer.
Fitzgerald added that Commercial Federal will continue to offer
mortgage loans and related services "as an important part of the products and
services we have provided, and always will continue to provide to our valued
customers."
The Company estimates a total after-tax charge to earnings
approximating $65 million in the first quarter. This charge is associated with
prepayment of Federal Home Loan Bank borrowings, selling investment securities,
eliminating interest rate hedges, recording certain exit costs tied to the
business, and is inclusive of the first quarter valuation adjustment for
mortgage servicing rights.
Commercial Federal estimates that approximately 135 positions will be
affected by the sale, and the Company said it is taking a number of actions to
minimize the impact of job loss.
"The size of our mortgage servicing for others portfolio created too
much variability in our earnings and that detracted from the performance of the
rest of the bank," said Fred Kulikowski, CFB president and chief operating
officer. "Focusing our attention on retail and commercial banking - the core
businesses that will drive the most profitable long-term growth for us - will
enhance long-term value for our shareholders by improving margins, and therefore
profitability."
These transactions will not affect the Bank's regulatory well capitalized
status.
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"Although these actions will result in a loss for the first quarter, it
is the right decision for our shareholders. Focusing the Company on our core
retail and commercial banking franchise will yield the strongest and most stable
earnings growth for us going forward," concluded Mr. Fitzgerald.
"We look forward to this opportunity to satisfy the mortgage needs of
these customers, both retail and wholesale, who'll come to us through this
acquisition," said Cara Heiden, Division President - National Consumer and
Institutional Lending for Wells Fargo Home Mortgage.
CONFERENCE CALL
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On Thursday, March 31, 2005, at 10:00 a.m. Central Time, Commercial
Federal will host a live conference call to discuss these actions. Media
representatives, analysts and investors are invited to participate in the
conference call by dialing 1-800-230-1074. For those unable to listen to the
call live, a conference call replay will be available from approximately 2:00
Central Time on Thursday, March 31, through midnight on Tuesday, April 5, 2005.
The conference call replay can be accessed by dialing 1-800-475-6701 and
entering passcode 776427.
The conference call will also be available online www.comfedbank.com on
a listen-only basis. The link to Commercial Federal's live webcast can be found
within the Investor Relations section of the Web site by clicking on the Webcast
button. The webcast replay of the call will be available on the Web site. All
remarks made during the conference call will be current at the time of the call
and will not be updated to reflect subsequent material development.
ABOUT COMMERCIAL FEDERAL CORPORATION
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Commercial Federal Corporation (NYSE: CFB) is the parent company of
Commercial Federal Bank, an $11.4 billion federal savings bank that currently
operates branches located in Nebraska, Iowa, Colorado, Kansas, Oklahoma,
Missouri and Arizona. Commercial Federal operations include consumer,
commercial, mortgage and Internet banking; consumer, commercial and small
business lending; and insurance and investment services.
ABOUT WELLS FARGO & COMPANY
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Wells Fargo & Company is a diversified financial services company with
$428 billion in assets, providing banking, insurance, investments, mortgage and
consumer finance to amore than 23 million customers from more than 6,000 stores,
the internet (wellsfargo.com) and other distribution channels across North
America and elsewhere internationally.
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, changes in interest rates, changes in regulations
or accounting methods, and price levels and conditions in the public securities
markets generally. As a matter of course, Commercial Federal does not take
actions to update any future-looking statements.