FDIC TO RECEIVE STOCK ESTIMATED AT $420 MILLION IN EXCHANGE FOR AMERICAN SAVINGS BANK WARRANTS
FOR IMMEDIATE RELEASE PR-54-96 (7-22-96)
Media Contact: Sally Kearney (202-898-8675)
The FDIC agreed today to exchange warrants held in N.A.
Capital Holdings, parent company of American Savings Bank, F.
A., Irvine, California, for 14 million shares of common stock in
Washington Mutual, Inc., a thrift holding company headquartered
in Seattle, Washington. The FDIC will be able to sell these shares
in the market in order to achieve maximum recovery for the FSLIC
Resolution Fund (FRF) and reduce financial assistance paid for
one of the largest thrift failures in history.
Washington Mutual, Inc. announced today the signing of
an agreement with Keystone Holdings, Inc. to acquire Keystone
and its subsidiaries, N.A. Capital Holdings and American Savings
Bank, F.A., through an all-stock merger. As a result, the FDIC
will receive 14 million common shares in Washington Mutual
when the merger is completed. The shares have an estimated
market value of $420 million, based on Friday's closing price of
$30.125 per share for Washington Mutual's common stock.
The FDIC obtained the warrants held in N.A. Capital
Holdings as manager of the FSLIC Resolution Fund, which was
created in 1989 to administer the residual financial matters of the
former Federal Savings and Loan Insurance Corporation (FSLIC)
after it was abolished. The FSLIC received an interest in N.A.
Capital Holdings following the failure of American Savings, a
FS&LA, Stockton, California, in December 1988. In May 1996,
the FDIC was approached by Keystone to restructure its warrant
agreement in N.A. Capital Holdings.
Merrill Lynch, Pierce, Fenner & Smith, Inc. and Friedman,
Billings, Ramsey & Co., Inc. have been hired to advise on the sale
of the shares. The latter provided the FDIC an opinion as to the
fairness of the shares received in exchange for the warrants.
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Congress created the Federal Deposit Insurance Corporation in 1933 to
restore public confidence in the nation's banking system. The FDIC
insures deposits at the nation's 12,000 banks and savings associations
and it promotes the safety and soundness of these institutions by
identifying, monitoring and addressing risks to which they are exposed.
FDIC press releases and other information are available on the Internet
via the World Wide Web at www.fdic.gov or through Gopher at