SAN FRANCISCO -- Fidelity Federal Bank has completed bulk sales of problem real estate assets, the last phase of a complicated restructuring and recapitalization that saved the Glendale, Calif.-based thrift from failure.

In four separate sales, Fidelity received net proceeds of $338.5 million for 350 loans and 254 foreclosed properties, mainly in Southern California, said Richard M. Greenwood, the thrift's chief executive, in an interview Friday.

The assets were carried on the thrift's books at $418.8 million at the end of June.

The thrift sold four properties for $19.8 million to Citadel Holding Corp., its former parent company. Buyers in the three remaining transactions were not identified.

Assets included single-family mortgages, plus large commercial realty properties sold for an average percentage of face value "in the mid-60s," Mr. Greenwood said.

In related transactions, Fidelity carded out an equity offering this month that raised $108 million and established it as an independent institution separate from Citadel, which retained a 16% ownership stake in the thrift.

Previously, Fidelity had agreed to sell nine of its Southern California branches to H.E Ahmanson's Home Savings of America unit for about $7.9 million.

The three measures lifted Fidelity's core capital to about 5.08% of assets on a pro forma basis, Mr. Greenwood estimated.

At the end of the second quarter, Fidelity's core capital ratio was about 3.27%. a level which would have triggered regulatory sanctions if additional equity had not been raised. Fidelity lost more than $170 million in the 18 months ended June 30, mainly due to problem real estate loans.

As a result of the reorganization, Citadel's shares lost roughly 82% of their book value. The final terms were worse than projected, reflecting greater loan losses and lower proceeds from asset sales than expected. Fidelity said the higher losses were due to last January's Los Angeles earthquake.

"It was as good a deal as we could have gotten for Citadel shareholders," said Mr. Greenwood, who left his job as Citadel CEO to stay on as Fidelity's chief.

Analysts agreed. "They did what they had to do to stay alive," said James M. Marks of Sutro and Co., San Francisco.

After the restructuring, Citadel's assets consisted of four real estate properties bought from Fidelity, some cash, and its holdings of Fidelity stock.

An earlier plan to transfer the thrift's headquarters and a second building to Citadel was canceled, and the company instead got an option to buy the properties, worth an estimated $9.5 million.

Mr. Greenwood said Fidelity's business strategy will be to combine seamlessly the sale of traditional thrift products with investment products.

Rather than having a separate investment sales force, all Fidelity's branch staff members will have licenses to sell both types of products.

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