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Goldome is holding discussions with at least two "substantial" outside investors who are interested in recapitalizing the bank, Thomas A. Cooper, Goldome's president and chief executive, said today.

"We are in very substantial, intense, ongoing discussions with more than one investor group," he said.

Cooper does not know whether either of the groups will decide to invest in the bank and does not know when they will make their decisions, he said.

"I can tell you that they are more positive about us than they were three months ago," he said.

Although Goldome has cleaned up its finances in the last two years and turned profitable this year, it continues to suffer from a serious shortage of capital and does not meet standards set by federal banking regulators.

The Wall Street Journal reported today that the Federal Deposit Insurance Corp. has set aside special reserves to be used in the event of the failure of several troubled savings and commercial banks -- including Goldome.

The Journal attributed its information to an unnamed banking regulator. The FDIC refused to confirm or deny the report.

The FDIC has not told Goldome that it has set aside such a reserve, Cooper said.

"I don't know what the FDIC does with their budgeting process," Cooper said.

"However, I would be less than honest if I didn't think that a prudent regulator wouldn't look at every bank that is operating without adequate capital," he added.

Cooper believes Goldome has some advantages over other troubled banks in dealing with banking regulators.

First, the bank is profitable on an operating basis.

"That gives day-to-day confidence to the regulators that they are not going to get smashed across the face with a surprise," he said.

Second, the bank continues to have serious discussions "with very substantial investors who are interested in Goldome."

Third, the bank continues to work off millions of dollars in non-productive "goodwill," which continues to skew its balance sheet. At its peak, the bank had $740 million in goodwill; today it has about $520 million and works off $3 million every month, he said.

Fourth, the bank has done a lot over the last two years to clean up its balance sheet. It has sold off all of its junk bonds and unrated securities.

Its investment portfolio now consists of securities rated double A or better and the portfolio is worth more than Goldome paid for it, he said.

The bank has worked hard to get rid of its bad commercial real estate portfolio. It has less than half the amount of bad commercial loans worth more than $5 million each than when Cooper came to Buffalo in 1989.

Goldome also has gotten rid of 800,000 square feet of vacant office space and now has only 200,000 square feet vacant, he said.

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