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SAN DIEGO INDUSTRY NOTES

November 24, 1987

In a move to reduce the future dilution of its per-share earnings, Great American First Savings Bank bought $39.7 million of its 8.5% convertible subordinated debentures due in 2011. The bonds were convertible into 2.1 million shares of common stock, or 7.6% of the bank's fully diluted outstanding shares as of Oct. 31.

Chairman Gordon Luce said the bank's decision to buy the bonds was prompted by the "significantly undervalued" price of Great American stock. So far, the bank has chosen not to repurchase its stock on the open market because of what it described as adverse tax consequences that would ensue.

Had the purchase of the bonds taken place Jan. 1, the bank's year-to-date profit would have been $2.89 per share instead of the $2.72 reported for the nine months ended Sept. 30, Great American senior vice president Roger Lindland said.

The bank did not rule out the possibility of buying more of the $35.3 million in convertible debentures still outstanding.

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