---

Arcadia Financial Comments on Anticipated Fourth Quarter Results

17 January 2000

Arcadia Financial Comments on Anticipated Fourth Quarter Results; Updates Status of Merger

    MINNEAPOLIS, Jan. 17 -- Arcadia Financial Ltd.
announced today that it currently anticipates that it will incur a loss for
fourth quarter 1999 resulting primarily from (i) Arcadia's decision not to
complete a securitization transaction during the quarter, and (ii) an expected
reduction to Arcadia's gain on sale revenue for the quarter unrelated to the
absence of a fourth quarter securitization transaction.
    Arcadia did not complete a securitization transaction during the 1999
fourth quarter because it has instead been selling loans to Associates
Financial Services Company, Inc.  These sales were made in accordance with the
merger agreement between Arcadia and Associates First Capital Corporation
("The Associates").  "As a result of these sales, although we will
recognize less income during the quarter, our cash position has been steadily
improving," said Richard A. Greenawalt, Arcadia's Chief Executive Officer.
    The reduction to gain on sale revenue for the 1999 fourth quarter is
expected to be primarily the result of an increase in interest rates and the
difference between expected and actual loan performance on previously
securitized loans.  A majority of the quarter's revenue adjustment has been
previously recorded on Arcadia's balance sheet as negative fair value
adjustments to shareholders' equity.  Greenawalt noted that 30+ day
delinquency rates increased slightly primarily due to the impact of
seasonality on Arcadia's portfolio.
    Arcadia expects to release its fourth quarter 1999 results in late
March 2000, after the annual audit by Arcadia's auditors, Deloitte & Touche
LLP, is completed.
    Arcadia also reported that on December 23, 1999, it filed with the
Securities and Exchange Commission its preliminary proxy/prospectus in
relation to its planned merger with The Associates.  "We are pleased to be
continuing with the process and are still targeting to have the transaction
completed by the end of the first quarter," said Greenawalt.
    Greenawalt also noted that Ernst & Young LLP, the independent accountants
for The Associates, has completed certain procedures required by the terms of
the merger agreement entered into with The Associates.  The Associates has in
turn waived certain termination rights under the merger agreement related to
the completion of such procedures.
    Arcadia Financial Ltd. is a Minneapolis-based consumer financial services
company specializing in purchasing, selling and servicing retail installment
contracts for new and used automobiles originated in 45 states.  The company,
founded in 1990, is the nation's largest independent provider of automobile
financing.  Its Regional Buying Centers are located in Arizona; northern and
southern California; Colorado; Florida; Georgia; Maryland; Massachusetts;
Minnesota; Missouri; New York; North Carolina; Tennessee; north, south and
west Texas; and Washington.
    This news release contains forward-looking statements that are subject to
certain risks and uncertainties that could cause actual results to differ
materially from historical results of from those results currently anticipated
or projected.  Such factors include, among other things, the following:
increased delinquency and loan loss rates; accounting and regulatory changes;
interest rate fluctuations; difficulties or delays in the securitization of
automobile loans; availability of adequate short- and long-term financing;
general economic and business conditions; and other matters set forth under
the caption "Cautionary Statements" in exhibit 99.1 to the company's quarterly
report on Form 10-Q for the quarter ended September 30, 1999.