Ahmanson Reports $0.89 Fourth-Quarter EPS and Record Net Income For 1997; Nonperforming Assets Declined $59.3 Million in the Fourth Quarter of 1997.IRWINDALE, Calif.--(BUSINESS WIRE)--Jan. 15, 1998--H.F. Ahmanson & Co. (NYSE NYSE See: New York Stock Exchange :AHM AHM Automated Hacking Machines AHM All Hands Meeting AHM Academy for Healthcare Management AHM Atom Heart Mother (Pink Floyd album) AHM Airport Handling Manual AHM Acutely Hazardous Material AHM Anti-Helicopter Mine ), parent company of Home Savings of America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. , Thursday Thursday: see week. reported fourth quarter 1997 net income of $99.5 million, 9% above the $91.2 million reported in the fourth quarter of 1996. On a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. common share basis, fourth quarter 1997 earnings were $0.89 per share, a 20% increase from $0.74 per share in the fourth quarter of 1996. Net income for 1997 was a record $413.8 million, or $3.59 per diluted common share, compared with $145.3 million in 1996, or $0.92 per diluted common share. Charles Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by R. Rinehart Rine·hart , Mary Roberts 1876-1958. American writer known for her mysteries, including The Circular Staircase (1908) and The Door (1930). , chairman and chief executive officer of H.F. Ahmanson and Home Savings, said: "1997 was a great year for H.F. Ahmanson, its stockholders, employees and customers. Earnings per share were at record levels, the California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). economy registered solid improvements, and our common stock provided a 110% total return to stockholders. "We have in place an array of consumer and business banking products to supplement our traditional first mortgage products in order to take advantage of our strong banking franchise. These products provide increased convenience to our customers and diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. our sources of earnings." 1997 net income and earnings per share numbers include the after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. gain of $34.1 million on the sale of Home Savings' deposit branches in West Florida
West Florida was a region on the north shore of the Gulf of Mexico, which underwent several boundary and sovereignty changes during its history. and Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). and a net after-tax cost of $3.2 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the withdrawn merger proposal for Great Western Financial Corp. Excluding these items, 1997 net income would have been $382.9 million (adjusted 1997 net income) and 1997 earnings per share would have been $3.31 (adjusted 1997 EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ). 1996 net income and earnings per share include the effects of the gain on the sale of Home Savings' San Antonio San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837. retail deposit branch system (the San Antonio gain), the Savings Association Insurance Fund Savings Association Insurance Fund (SAIF) A government organization that replaced the Federal Savings and Loan Insurance Corporation as the provider of deposit insurance for thrift institutions. (SAIF) recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. and the First Interstate in·ter·state adj. Involving, existing between, or connecting two or more states. n. One of a system of highways extending between the major cities of the 48 contiguous United States. Noun 1. Bank (FIB fib n. An insignificant or childish lie. intr.v. fibbed, fib·bing, fibs To tell a fib. See Synonyms at lie2. ) branch acquisition charge. Excluding these items, 1996 net income would have been $294.0 million (adjusted 1996 net income) and 1996 earnings per share would have been $2.19 (adjusted 1996 EPS). Adjusted 1997 net income increased 30%, compared with adjusted 1996 net income, and adjusted 1997 EPS increased 51%, compared with adjusted 1996 EPS. Earnings per share, for both the 1997 fourth quarter and full year, grew at a faster rate than net income as a result of the company's ongoing stock purchase program. As of Dec. 31, 1997, the company had purchased 27.6 million common shares since initiating the first stock purchase program in October October: see month. 1995, or 23% of the then outstanding shares, at an average price per share of $33.57. During the fourth quarter of 1997, nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. (NPAs) decreased by $59.3 million, reaching their lowest level in 7-1/2 years. At year end 1997, NPAs totaled $595.3 million, or 1.28% of total assets, compared with $846.2 million, or 1.70% NPAs declined throughout most of 1997, reflec ting ting n. A single light metallic sound, as of a small bell. intr.v. tinged , ting·ing, tings To give forth a light metallic sound. the company's aggressive efforts in dealing with problem LTS LTS 1 Latent tetany syndrome, see there 2. Low-threshold spike–neurology OF OPERATIONS Net Interest Income Net interest income totaled $306.4 million in the fourth quampared with $1.25 billion in 1996. The declinage net interest margins were 2.76% and 2.68%, respectively, compared with 2.68% and 2.63% for the 1996 periods. Net interest margins were 2.64%, 2.66% and 2.70% forter of 1996. For the year 1997, fee income was $183.0 million, a 34% increase, compared with $136.7 million in 1996. The increase in 1997 was due to growth in fces, a subsidiary offering securities and insurance products and services. General and Administrative Eh quarter of 1996. In the third quarter of 1997, G&A was $182.1 million. G&A was $737.5 million in 1997, ion. The company's efficiency ratio was 5ed with 52.2% in 1996, exclusive of the SAIF rllion in the first quarter, $39.9 million in the second quarter, and $29.0 million in the third quarter. The significant decline in credit costs reflects both lower ne charge-offs for the fourth quarter of 1997 totaled $13.0 million, compared with $38.5 million in the fourth Loan fundings increased each quarter and totah e fourth quarter of 1996. In 1997 the company funded $5.0 billion in residential mortgages, compared with $5.2 billion in 1996. Fifty-seven Adj. 1. fifty-seven - being seven more than fifty 57, lvii cardinal - being or denoting a numerical quantity but not order; "cardinal numbers" percent of 1997 residential fundings were ARMs, compared with 65% in 1996. For the fourth quarter of 1997, 45% of residential fundings were ARMs, compared with 70% for the fourth quarter of 1996. Consumer loan fundings totaled a record $247.6 million during the fourth quarter of 1997, compared with $157.4 million in the fourth quarter of 1996. For the yearfunded $90.0 million in consumer loans, its highhe year 1997. The growing volume of business f America's capital ratios exceeded the minimupleted its fourth stock purchase program and b2.96. During the fourth quarter of 1997, hase activity, $374.4 million remained at Dec. 98, announced that it will redeem redeem v. to buy back, as when an owner who had mortgaged his/her real property pays off the debt. The term also refers to paying the amount due and all charges after a foreclosure (due to failure to make payments when due) has begun. at par its $ooking Statement This release contains fos. Factors that may cause actual results to differ materially from those contemplated by such forward-lookimargins; (2) general economic conditions, eithich the company would be engaged. H.F. businesswire.com/cnn/ahm.shtml For information regarding PC Banking, Home Loans, Investments, Insurance, Business Banking and Consumer Loans, contact Home Savings' Web site: http://www.homesavings.com -0-
H.F. AHMANSON & CO. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per-share data)
At End of Period 12/31/97 9/30/97 12/31/96
-----------tgage-backed
securities (MBS) $ 43,275,582 $ 43,840,875 $ 46,085,670
ARMs included in loans
receivable and MBS $ 40,925,681 $ 41,684,196 $ 44,070,098
Allowance for loan losses $ 377,351 $ 380,3 $ 18.79 $ 18.37 $ 17.
31
Total common shares
outstanding 93,155,8441,948
Average Interest Rates:
Yield on loans and MBS 7.51% 7.46% 7.39%
6.30% 6.39% 6.33%
Cost of interest-costing
liabilities 4.92% 4.93% 4.86%
Interest rate spread 2.57% 2.52% 2.53%
Net interest margin 2.76% 2.70% 2.68%
For the Years Ended
-------------------
Net interest income $ 1,234,885 $ 1,252,514
Credit costs/a $ 137,217 $ 250,804
Net income/c $ 413,782 $ 145,258
Net income per
diluted common
share/c/e $ 3.59 $ 0.92
Dividends per common
share $ 0.88 $ 0.88
Loans originated t
portfolio 6.84% 6.87%
Yield on interest-earning
assets 7.41% 7.37%
2.43%
Net interest margin hs ended Dec. 31, 1996, would have
been $87.2 million, or $0.70 per share, before the gain on sale of
the San Antonio retail deposit branch system.
(c) Net income for the year ended Dec. 31, 1997, would have been
$382.9 million, or9 per share, before
the gain on sale of the San Antonio retail branch deposit system and
the SAIF special assessment and FIB acquisition charges.
(d) Includes FIB loans acquired of $1.1 billion.
(e) The company adopted Statement dividing income available to common stockholderscommon share amoun
ts for
periods prior to Dec.(Unaudited)
(In thou $ 603,797 $ 476,023 $ 691,578
5,110 6,141 14,782
10,343 11,597
Investment in stock
of Federal Home
Loan Bank (FHLB) 411, 30,484,191 30,683,916 31,789,158
A 286,385 308,083
Other assets 4
=========== =========== ===========
Liabilities, Capital Securities
268,375 $32,447,317 $34,773,945
Securities and other
borrowings 8,31 148,413
Stockholders' equity 2,395 =========== =========== ===
F
or the Three Months Ended
------------------------------ -----------
Interest income:
Loans $ 581,993 $ 579,925 $ 595,852erest expense:
Deposits 364,471 365,641 386,692
Short-term borrowings ----------- ------nterest income 306,36
2 302,835
ision
for loan losses 296,351 on sales of loans 3,450 698 3,8
45
Loan servicing income 13,589 -
Other operating income 1,520 1,701 1,507
----------- ----------- -----------
64,783 64,126 78,008
----------- ----------- -----------
Noninterest expense:
Compensation and other
employee expenses 87,305 88,603 91,382
Occupancy expenses 25,567 25,291 28,695
Federal deposit insurance
premiums and assessments 5,961 6,235 1,275
Other general and
administrative expenses 69,358 61,939 66,833
----------- ----------- -----------
General and
administrative
expenses 188,191 182,068 188,185
Operations of REI 456 1,008 1,388
Operations of REO 12,019 14,115 27,664
Amortization of goodwill
and other intangible
assets 6,474 6,452 6,935
----------- ----------- -----------
207,140 203,643 224,172
----------- ----------- -----------
Income before provision
for income taxes 153,994 148,450 142,260
Provision for income
taxes 54,500 52,911 51,013
----------- ----------- -----------
Net income $ 99,494 $ 95,539 $ 91,247
=========== =========== ===========
Net income
attributable to common
shares $ 91,117 $ 87,132 $ 82,840
=========== =========== ===========
Income per common
share/a:
Basic $ 0.97 $ 0.91 $ 0.79
Diluted $ 0.89 $ 0.84 $ 0.74
Common shares outstanding,
weighted average/a:
Basic 93,851,941 95,528,821 104,652,464
Diluted 107,607,139 109,318,806 117,973,752
(a) Income per share and the weighted average common shares
outstanding for periods prior to Dec. 31, 1997, have been
restated to reflect the adoption of SFAS No. 128.
H.F. AHMANSON & CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands, except per-share data)
For the Years Ended
----------------------------
12/31/97 12/31/96
----------- -----------
Interest income:
Loans $ 2,315,253 $ 2,296,786
MBS 1,020,747 1,161,487
Investments 67,372 56,522
----------- -----------
Total interest
income 3,403,372 3,514,795
----------- -----------
Interest expense:
Deposits 1,479,438 1,523,873
Short-term borrowings 167,156 138,182
FHLB and other
borrowings 521,893 600,226
----------- -----------
Total interest
expense 2,168,487 2,262,281
----------- -----------
Net interest income 1,234,885 1,252,514
Provision for loan losses 67,091 144,924
----------- -----------
Net interest income
after provision
for loan losses 1,167,794 1,107,590
----------- -----------
Noninterest income:
Gain (loss) on sales of
MBS (74) 3,074
Gain on sales of loans 18,274 28,346
Loan servicing income 63,534 68,365
Banking and other retail
service fees 115,431 78,061
Other fee income 67,528 58,678
Gain on sales of retail
depenses 355,744 369,264
Oc243,862
Other general and
administrative expenses 252,521 222,640
----------- -----------
General and
9,147
Net acquisition costs 5,475 -
Operations of REI 3,722 34,961
Operations of REO 70,126 105,880
Amortization of goodwill
and other intangible
assets 25,763 18,842
----------- -----------
842,582 1,178,830
----------- -----------
Income befo $ 413,782 $ 145,258
97,162,327 108,650,585
Diluted the adoption of SFAS No. 128.
H.F. AHMANSON & CO. AND SUBSIDIARIES
CONDENSED CO 0.85% 0.81% 0.73%
Return on average For the Years Ended
returns on average assets,
average equity and average tangible equity and the efficiency ratio
excluding certain gains and expenses. The three months ended Dec.
31 Dec. 31, 1996
14.06%
Return on avera 12/31/97 12/31/96
-------- --------
average tangible equity/b 18.17% 11.5erage
equity excluding goodwill and other intaMBS/b 13,022,728 13,465,588 14,
730,840
----------- 980,944 1,003,117 905,478
64,314 1,879,613 2,102,264
======
Deposits $32,433,----
Total interest-costing
liabilities 43,236,236 43,833,096 46,409,727
Other liabilities 1,163,897 1,117,625 1,099,736
Stockholders' equity:
Preferred 479,425 482,500 606,141
Common 1,919,146 1,928,510 1,874,958
----------- ----------- -----------
Total liabilities
and stockholders'
equity $46,798,704 $47,361,731 $49,990,562
=========== =========== ===========
(a) Excludes the allowance for losses.
(b) Excludes the unrealized gain/loss on MBS available for sale.
For the Years Ended
-------------------
Loans receivable/a $31,157,029 $31,338,823
MBS/b 13,770,415 -----------
Total loans and MBS l assets $47,814,991 $4curities 10,960,8
53
11,702,162
----------- ities 1,025,006 1
,148,943
Stockholders' equity:
Preferred =========
(a) Excludes the allowance for losses.
(b) Excludes the unrealized gain/loss on MBS available fodia)
Steve Swartz, 626/814-7986 ( with Hyperlinks to your home page.
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