Ahmanson reports first quarter results: Net interest margin continues to expand.IRWINDALE, Calif.--(BUSINESS WIRE)--April 16, 1996--H.F. Ahmanson & Company (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. , Tuesday Tuesday: see week. reported first quarter earnings of $64.8 million, or $0.45 per fully 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, compared to $60.7 million, or $0.40 per fully diluted common share, earned in the fourth quarter of 1995. In the first quarter of 1995, the company recorded a net loss of $181.9 million, or $1.66 per fully diluted common share, which included a $234.7 million charge relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc a change in accounting for goodwill. First quarter results in 1995 without the accounting change were $50.7 million, or $0.33 per fully diluted common share. Ahmanson and Home Savings Chairman and Chief Executive Officer 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). said: "Earnings growth during the first quarter reflects a momentum building within our business units as we steadily progress toward our goal of becoming a full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. consumer bank. It also reflects greater intensity throughout the company in holding the line on operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. as we implement key strategic initiatives. "Although credit costs increased during the first quarter, we were encouraged by the decline in 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. during the month of March," he added. Results of Operations Net interest income totaled $317.0 million for the first quarter of 1996, compared to $295.2 million in the first quarter of 1995, and $306.9 million in the fourth quarter of 1995. In the first quarter of 1996, the average net interest margin was 2.64%, compared to 2.27% in the first quarter of 1995, and 2.54% in the fourth quarter of 1995. At March 31, 1996, the net interest margin was 2.74%, the highest it has been since June June: see month. 1994. This increase in the net interest margin is due to a decline in wholesale funding costs, coupled with a decline in the cost of deposits. Other Income In the first quarter of 1996, other income was $60.5 million, an increase of $24.5 million from the amount reported in the year ago quarter, and an increase of $12.3 million from the fourth quarter of 1995. During the first quarter of 1996, the company sold $586.0 million of fixed rate loans and $353.4 million of Adjustable Rate Mortgages This article is about the US mortgage type. For an international perspective, see Variable rate mortgage. An adjustable rate mortgage (ARM) is a mortgage loan where the interest rate on the note is periodically adjusted based on an index. (ARMs) from its held- for-sale portfolio for a gain of $15.0 million. Fee income from personal financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. and Griffin Financial Services also continues to show improvement as the company implements its strategy to become a full-service consumer bank. General and Administrative Expenses General and administrative expenses (G&A) were $193.0 million in the first quarter of 1996, compared to $182.8 million in the first quarter of 1995 and $199.2 million in the fourth quarter of 1995. In the first quarter of 1996, the company recorded approximately $5 million of severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when expense. Recent major initiatives such as consumer lending Consumer lending or consumer loans refers to any type of loan product that is not a mortgage; such as a car, boat, manufactured home, home equity loan, home equity line of credit, signature loan, signature line of credit, recreational vehicle, or Certificate of Deposit loans. , Project HOME Run and electronic banking accounted for approximately $6 million of the increase from the 1995 first quarter. First quarter of 1995 expenses reflect a $5.7 million refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid. 2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies of Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation (FDIC), an independent U.S. federal executive agency designed to promote public confidence in banks and to provide insurance coverage for bank deposits up to $100,000. premiums. Expressed as an efficiency ratio that measures G&A expenses as a percentage of net interest income and loan servicing Loan servicing is the process by which a mortgage bank or subservicing firm collects the timely payment of interest and principal from borrowers. The level of service varies depending on the type loan and the terms negotiated between the firm and the investor seeking their services. and other fee income, the operating efficiency ratio was 53.8% in the first quarter of 1996, compared to 55.0% in the first quarter of 1995 and 57.0% in the fourth quarter of 1995. Credit Costs During the first quarter of 1996, the company provided $45.9 million for loan losses, compared to $26.5 million in the 1995 first quarter and $37.9 million in the fourth quarter of 1995. Expenses for the operations of foreclosed real estate amounted to $25.7 million in the 1996 first quarter, compared to $21.1 million in the first quarter of 1995 and $25.1 million in the fourth quarter of 1995. Increases in the provision for loan losses and the operations of foreclosed real estate during the first quarter of 1996 were due to weakness in the Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, real estate market. Asset Quality At March 31, 1996, nonperforming assets totaled $977.4 million, or 1.96% of total assets, compared to $878.6 million, or 1.64%, at March 31, 1995, and $949.4 million, or 1.88%, at December December: see month. 31, 1995. Nonperforming assets increased $44.7 million in January January: see month. and $31.1 million in February February: see month. , then decreased by $47.8 million in March. Troubled debt restructurings troubled debt restructuring See debt restructuring. totaled $174.9 million at March 31, 1996. Net loan charge-offs for the 1996 first quarter totaled $41.5 million, compared to $35.7 million in the first quarter of 1995, and $42.3 million in the fourth quarter of 1995. At March 31, 1996, the allowances for loan losses and foreclosed real estate were $385.4 million and $37.1 million, respectively. The ratio of allowances for losses to nonperforming assets equaled 41.7% at March 31, 1996, compared to 46.8% at March 31, 1995, and 42.4% at December 31, 1995. Loan Originations The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. The company originated $1.3 billion of loans in the first quarter of 1996, compared to $1.7 billion in the year-ago quarter. In the 1996 first quarter, 83% were single family mortgages and 43% were ARMs. Loans to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. real estate holdings accounted for 44% of the company's first quarter 1996 originations, compared to 27% of the company's first quarter 1995 originations. Single family originations in 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). accounted for 61% of the company's single family production. The company funded $16.6 million in consumer loans during the quarter and had additional unfunded commitments of $10.0 million at March 31, 1996. The company had $66.7 million in applications in the consumer loan pipeline at March 31, 1996, an increase of $50.8 million from year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 1995. Deposits At March 31, 1996, deposits totaled $33.9 billion, compared to $41.7 billion at March 31, 1995, and $34.2 billion at December 31, 1995. This $7.8 billion, or 19% decrease from a year ago, principally reflects the purchase of $1.2 billion from Household Bank in June 1995 and $8.1 billion as a result of the sale of the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of retail deposit branch system in September September: see month. 1995. Capital At March 31, 1996, Home Savings of America's federal capital ratios exceeded all regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. for well-capitalized institutions, the highest regulatory standard.
Requirement for Home Savings
Well-Capitalized Home Savings Fully Phased-In
Status at 3/31/96 at 3/31/96
Tangible -- 6.12% 6.10% Core Capital 5.00% 6.13% 6.11% Core Capital to Risk- Weighted Assets: 6.00% 9.87% 9.84% Risk-Based Capital: 10.00% 12.01% 11.98% On March 31, 1996, fully phased-in core capital exceeded the well- capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. standard by $546 million. Stock Repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. Program Through March 31, 1996, the company had purchased 5.7 million shares of its common stock at an average price of $24.67 under a stock repurchase program. The program, approved by the board of directors on October October: see month. 3, 1995, authorizes the company to purchase up to $250 million of its common stock. On March 31, 1996, the parent company had $258.0 million in cash, ample resources to complete the stock repurchase program. Subordinated Debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before at Home Savings of America On March 12, 1996, Home Savings redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. its $250 million 10.5% subordinated debentures at par. The redemption affected risk-based capital ratios Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. , but neither tangible nor core capital ratios were affected. Home Savings was $606 million above the well-capitalized risk-based capital standard at March 31, 1996. Home Savings Purchases 61 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. Branches On March 28, 1996, Home Savings announced it had signed a definitive agreement to purchase 61 branches of First Interstate Bancorp First Interstate Bancorp was a bank based in the United States that was taken over in 1996 by Wells Fargo. It was headquartered in Los Angeles. The name has continued to be used in the banking world by used after the merger by First Interstate Bank who had been using the from Wells Fargo Wells Fargo armored carriers of bullion. [Am. Hist.: Brewer Dictionary, 1147] See : Protectiveness Wells Fargo company that handled express service to western states; often robbed. [Am. Hist. & Company. Home Savings will acquire $2.5 billion in deposits and $1.3 billion in loans as part of this transaction. The transaction is expected to close in the third quarter of 1996. The purchase price represents a premium of 8.11% on the deposits. H.F. Ahmanson & Company, with $49.8 billion in assets, is the parent company of Home Savings of America. Home Savings' deposit base is $34.2 billion. It operates 345 financial service centers in four states and 120 mortgage lending offices in 10 states. Additional information, including monthly financial data, about H.F. Ahmanson & Company and Home Savings of America can be retrieved free of charge using the following services: o Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the : http://www.investquest.com o Fax-on-Demand: 614/844-3860 o On-line BBS (1) (Bulletin Board System) A computer system used as an information source and forum for a particular interest group. They were widely used in the U.S. : 614/844-3868 -0-
H. F. AHMANSON & COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
(dollars in thousands except per share data)
At End of Period 03/31/96 12/31/95 03/31/95
---------------- ------------ ------------ ------------
Total assets $ 49,781,986 $ 50,529,586 $ 53,664,970
Investment portfolio $ 707,045 $ 892,572 $ 1,595,350
Loans receivable and
mortgage-backed
securities (MBS) $ 46,530,610 $ 47,407,521 $ 49,638,155
ARMs included in loans
receivable and MBS $ 44,870,834 $ 45,895,028 $ 47,303,335
Allowance for loan losses $ 385,367 $ 380,886 $ 391,105
Deposits $ 33,947,928 $ 34,244,481 $ 41,669,705
Borrowings $ 11,601,867 $ 12,236,428 $ 8,378,702
Stockholders' equity $ 2,952,702 $ 3,056,922 $ 2,783,854
Book value per common
share $ 20.40 $ 20.75 $ 18.16
Tangible book value
per common share $ 19.12 $ 19.47 $ 16.20
Total common shares
outstanding 112,512,418 115,610,077 117,110,979
Home Savings of America
Capital Ratios:
Tangible capital (to
adjusted total assets) 6.12% 5.90% 5.19%
Core capital (to adjusted
total assets) 6.13% 5.91% 5.19%
Core capital (to
risk-weighted assets) 9.87% 9.48% 8.56%
Risk-based capital 12.01% 12.43% 11.66%
For the Three Months Ended:
--------------------------
Net interest income $ 316,982 $ 306,892 $ 295,244
Provision for loan
losses $ 45,942 $ 37,927 $ 26,544
Net earnings (loss) $ 64,755 $ 60,709 $ (181,892)
Net earnings (loss) per
fully diluted common share $ 0.45 $ 0.40 $ (1.66)
Dividends per common
share $ 0.22 $ 0.22 $ 0.22
Loans originated
and purchased $ 1,339,779 $ 1,647,308 $ 1,708,144
Average Interest Rates:
Yield on loans and MBS 7.48% 7.53% 6.91%
Yield on investment
portfolio 5.83% 5.38% 6.09%
Yield on interest-earning
assets 7.45% 7.49% 6.86%
Cost of deposits 4.57% 4.73% 4.25%
Cost of borrowings 6.28% 6.42% 6.56%
Cost of interest-costing
liabilities 5.02% 5.17% 4.69%
Interest rate spread 2.43% 2.32% 2.17%
Net interest margin 2.64% 2.54% 2.27%
H. F. AHMANSON & COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
(in thousands)
Assets 03/31/96 12/31/95 03/31/95
------ ----------- ----------- -----------
Cash and amounts
due from banks $ 683,480 $ 752,878 $ 610,028
Securities purchased
under agreements
to resell 278,000 381,000 820,399
Other short-term
investments 14,364 13,278 23,789
----------- ----------- -----------
Total cash and
cash equivalents 975,844 1,147,156 1,454,216
Other investment securities
held to maturity 2,445 2,448 272,813
Other investment securities
available for sale 9,809 9,908 10,441
Investment in stock
of Federal Home
Loan Bank (FHLB) 402,427 485,938 467,908
Mortgage-backed
securities (MBS)
held to maturity 5,649,418 5,825,276 11,198,413
MBS available for
sale 10,410,053 10,326,866 2,320,466
Loans receivable
less allowance for
losses of
$385,367 (03/31/96)
$380,886 (12/31/95) and
$391,105 (03/31/95) 30,211,898 30,273,514 36,092,689
Loans held for sale 259,241 981,865 26,587
Accrued interest
receivable 223,968 228,111 160,088
Real estate held for
development and
investment (REI)
less allowance
for losses of
$286,327 (03/31/96),
$283,748 (12/31/95) and
$332,382 (03/31/95) 230,445 234,855 323,179
Real estate owned held
for sale (REO)less
allowance for losses of
$37,137 (03/31/96),
$38,080 (12/31/95) and
$36,852 (03/31/95) 225,870 225,566 189,146
Premises and equipment 413,487 410,947 610,237
Goodwill and other
intangible assets 143,981 147,974 228,877
Other assets 623,100 229,162 285,441
Income taxes - - 24,469
----------- ----------- -----------
$49,781,986 $50,529,586 $53,664,970
=========== =========== ===========
Liabilities and Stockholders' Equity ------------------------------------
Deposits $33,947,928 $34,244,481 $41,669,705
Short-term borrowings
under agreements
to repurchase
securities sold 1,998,431 3,519,311 1,826,949
Other short-term
borrowings 50,000 - 5,188
FHLB and other
borrowings 9,553,436 8,717,117 6,546,565
Other liabilities 1,170,026 873,313 832,709
Income taxes 109,463 118,442 -
----------- ----------- -----------
Total liabilities 46,829,284 47,472,664 50,881,116
Stockholders' equity 2,952,702 3,056,922 2,783,854
----------- ----------- -----------
$49,781,986 $50,529,586 $53,664,970
=========== =========== ===========
H. F. AHMANSON & COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(dollars in thousands except per share data)
For the Three Months Ended
----------------------------------------
03/31/96 12/31/95 03/31/95
------------ ----------- ------------
Interest income:
Interest on loans $ 574,855 $ 583,543 $ 630,791
Interest on MBS 308,354 309,629 220,087
Interest and dividends
on investments 11,661 13,205 43,105
----------- ----------- -----------
Total interest
income 894,870 906,377 893,983
----------- ----------- -----------
Interest expense:
Deposits 387,173 407,113 439,458
Short-term borrowings 40,230 65,107 49,518
FHLB and other
borrowings 150,485 127,265 109,763
----------- ----------- -----------
Total interest
expense 577,888 599,485 598,739
----------- ----------- -----------
Net interest income 316,982 306,892 295,244
Provision for loan losses 45,942 37,927 26,544
----------- ----------- -----------
Net interest income
after provision
for loan losses 271,040 268,965 268,700
----------- ----------- -----------
Other income:
Gain on sales of MBS - 53 603
Gain on sales
of loans 15,028 4,375 231
Loan servicing income 15,145 15,940 12,966
Other fee income 26,819 26,730 23,972
Gain (loss) on sales of
investment securities - (67) 10
Other operating income 3,538 1,189 (1,800)
----------- ----------- -----------
60,530 48,220 35,982
----------- ----------- -----------
Other expenses:
General and
administrative
expenses (G&A) 193,048 199,217 182,752
Operations of REI 6,743 3,625 1,087
Operations of REO 25,689 25,123 21,053
Amortization of goodwill and
other intangible assets 3,994 4,611 6,911
----------- ----------- -----------
229,474 232,576 211,803
----------- ----------- -----------
Earnings before provision for
income taxes and cumulative
effect of accounting change 102,096 84,609 92,879
Provision for income taxes 37,341 23,900 40,029
----------- ----------- -----------
Earnings before cumulative
effect of accounting change 64,755 60,709 52,850
Cumulative effect of change
in accounting for goodwill - - (234,742)
----------- ----------- -----------
Net earnings (loss) $ 64,755 $ 60,709 $ (181,892)
=========== =========== ===========
Earnings (loss) per common
share - primary:
Earnings before
cumulative effect of
accounting change $ 0.45 $ 0.41 $ 0.34
Cumulative effect of
change in accounting
for goodwill - - (2.00)
----------- ----------- -----------
Net earnings (loss) $ 0.45 $ 0.41 $ (1.66)
=========== =========== ===========
Earnings (loss) per common
share - fully diluted:
Earnings before
cumulative effect of
accounting change $ 0.45 $ 0.40 $ 0.34
Cumulative effect of
change in accounting
for goodwill - - (2.00)
----------- ----------- -----------
Net earnings (loss) $ 0.45 $ 0.40 $ (1.66)
=========== =========== ===========
Common shares outstanding,
weighted average:
Primary 114,781,516 117,922,440 117,143,614
Fully diluted 126,651,898 129,738,144 117,143,614
Return on average assets 0.51% 0.48% (1.33)% Return on average equity 8.60% 7.93% (25.84)% Return on average tangible equity/a 9.60% 8.97% 9.26% Ratio of G&A expenses to average assets 1.53% 1.58% 1.34%
a/ Net earnings excluding amortization of goodwill and other
intangible assets, and cumulative effect of change in accounting
for as a percentage of average equity excluding goodwill and
other intangible assets.
-0-
CONTACT: H.F. Ahmanson Mary Mary, the mother of Jesus Mary, in the Bible, mother of Jesus. Christian tradition reckons her the principal saint, naming her variously the Blessed Virgin Mary, Our Lady, and Mother of God (Gr., theotokos). Her name is the Hebrew Miriam. Trigg Trigg is the name of a number of places and people. It may refer to: Places
Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. Swartz, 818-814-7986 (investor) |
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