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CONTINENTAL BANK WINS BACK ITS `FREEDOM'

Bankers took off their pinstripes and danced in their shirtsleeves at a street party marking Continental Bank Corp.'s release last week from government control seven years after its $1 billion rescue.

"Hey, they're finally off our backs," loan officer Fred Johnson said between dances. "Mentally, it makes a lot of difference."The Federal Deposit Insurance Corp. two weeks ago sold its remaining stake in what once was one of the world's largest banks, returning Continental to complete public ownership for the first time since its near-collapse in 1984.

For four years the Continental bailout stood as the costliest federal rescue of a U.S. bank. It now stands as the fourth-largest.

Last Tuesday night, a 12-piece band played beneath arches of multicolored balloons over a main street in the city's financial district.

Some banker-types kept on their suit coats and quietly sipped beers on the sidelines. But many employees, including some top executives, let loose.

Continental Chairman Thomas J. Theobald exchanged his suit coat for a kitchen apron and led the dancers.

The mood contrasted sharply with the early days of government control. Bank spokesman Edgar McDougal, a 10-year Continental employee, said those days were marked by questioning auditors and jittery nerves.

Since then, the bank changed its name from Continental Illinois Corp. and began handling business accounts exclusively.

The FDIC bailout halted a $20 million run on deposits.

The bank began tottering when the Penn Square Bank of Oklahoma City failed in 1982. Continental had bought more than $1 billion in energy loans from Penn Square and wrote off most of them when Penn Square failed.

To save Continental, the government bought most of the bank's stock and assumed ownership of $5.2 billion in shaky loans. The FDIC, which once owned 80 percent of the bank's stock, sold its last 14.2 million shares Thursday.

Employees said the sale will go a long way to change the public's perception of the bank. It removes a "stigma that reminded employees and customers that we had gone broke in 1984," Theobald said last week.

"It gives a positive impression," employee Tom Barry said Tuesday.