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CALFED INC. ANNOUNCES AGREEMENT WITH BONDHOLDERS STEERING COMMITTEE, REPORTS THIRD QUARTER RESULTS

 CALFED INC. ANNOUNCES AGREEMENT WITH BONDHOLDERS
 STEERING COMMITTEE, REPORTS THIRD QUARTER RESULTS
 LOS ANGELES, Nov. 3 /PRNewswire/ -- CalFed Inc. (NYSE: CAL) said today that it reached an agreement late Monday with the unofficial steering committee of its bondholders on the terms of an exchange offer and restructuring that could, when consummated, add more than $150 million in capital to its principal subsidiary, California Federal Bank, and relieve the company of its upcoming obligation to its bondholders. The company also reported a net loss for the third quarter ended Sept. 30, 1992, of $42.2 million, or $1.64 per fully diluted share, compared to a net loss for the third quarter of 1991 of $57.1 million, or $2.23 per fully diluted share.
 The company said that at Sept. 30, 1992, California Federal Bank's tangible, core and risk-based capital ratios were 2.81 percent, 3.85 percent and 7.51 percent, exceeding the corresponding regulatory capital requirements of 1.50 percent, 3.00 percent and 7.20 percent.
 The bondholders on the steering committee who agreed to the terms also agreed to tender the approximately $47 million in debentures held by them (38 percent of the $122.6 million outstanding) upon review and approval of definitive offering documents reflecting the agreed upon terms which were filed today with the Office of Thrift Supervision (OTS).
 The terms provide for the company's bondholders to exchange their debentures for an amount of common stock of California Federal Bank which will constitute approximately 79 percent of its outstanding stock after the restructuring, plus up to $17.6 million of newly issued 10 percent subordinated debentures of the bank due 2003. At least 90 percent of the principal amount of the outstanding debentures must be tendered for the exchange offer to be accepted.
 The second major element of the restructuring, which would take place immediately following completion of the exchange offer, is the merger of CalFed Inc. into a subsidiary of California Federal Bank. The bank would thereafter become the publicly held company. Stockholders of CalFed Inc. would automatically become stockholders of California Federal Bank and would hold approximately 21 percent of the outstanding stock of the bank. The former stockholders of CalFed Inc. would also receive warrants to purchase an aggregate 13.8 million additional shares of common stock of the bank in June 1994 for a price of $2.10 per share.
 Upon the completion of the restructuring, the board of directors of the bank would be expanded from its present number of eight to permit the appointment of up to four new directors designated by the bondholder steering committee and approved by the OTS. By no later than March 31, 1993, the bank would hold an annual meeting of shareholders at which time the entire board of directors, which would then be reduced to no more than nine members, would be elected by the stockholders for staggered three-year terms.
 The restructuring proposals will be submitted to the stockholders of the company for their approval at a special stockholders meeting planned for December 1992. Approval of the restructuring by the OTS is also required. No steps of the restructuring can take place without necessary approvals by stockholders, bondholders and the OTS.
 The successful completion of the restructuring will eliminate the company's obligation expected to arise on Feb. 20, 1993, to pay up to $158 million to company bondholders. The restructuring would also respond to the assertion by the OTS that the company is obligated to contribute its assets to California Federal Bank's equity capital to keep it in capital compliance. The OTS has stated that the restructuring must be completed by Dec. 31, 1992, if the bank is to avoid possible sanctions.
 "We are very pleased that we have reached agreement with the steering committee of bondholders on a transaction that will add such a significant amount of capital to California Federal Bank," said Jerry St. Dennis, chairman and chief executive officer of CalFed Inc. "We expect to talk soon with stockholders and bondholders to fully explain the transaction."
 For the first nine months of 1992, CalFed Inc. reported a net loss of $52.3 million, or $2.04 per fully diluted share, compared to a net loss of $78.4 million, or $3.06 per fully diluted share, for the first nine months of 1991.
 The company's 1992 third quarter results include provisions for loan and real estate losses of $73.5 million. The loss for the third quarter of 1991 reflected provisions for losses on loans and real estate totaling $80.7 million.
 "The company's progress in restructuring its operations continues to be overshadowed by weakening real estate values in the company's two major lending areas, California and Florida," St. Dennis said. "On an operating basis, the company is more efficient than ever, reducing operating costs while producing increases in fee income, loan originations and net interest income."
 General and administrative expenses for the third quarter of 1992 declined 7 percent to $82.7 million from $88.5 million for the quarter ended Sept. 30, 1991. For the nine months ended Sept. 30, 1992, general and administrative expenses totaled $253.0 million compared to $271.1 million for the same period of 1991. The decline is in large part a result of a 24 percent reduction in staffing since Sept. 30, 1991, and the consolidation or sale of several branches and lines of business over the past 12 months.
 Fee income, a consistently strong component of the company's core earnings, increased to $18.1 million and $59.5 million for the third quarter and first nine months of 1992, from $16.8 million and $47.3 million for the same 1991 periods. Fees on sales of alternative investment products, such as mutual funds and annuities, for the first nine months of 1992 nearly doubled to $15.6 million as the bank continued to attract customers, especially those on fixed- incomes, to its alternative products. As a result of customers seeking alternatives to lower-yielding savings instruments, retail core deposits during the 1992 third quarter declined to $12.7 billion from $13.8 billion at Sept. 30, 1991. Retail core deposits, such as checking and other transaction accounts, remain a low-cost, stable source of funding for the bank, and also provide cross-selling opportunities for other California Federal Bank products and services.
 The company originated $793.7 million in new loans during the third quarter of 1992 compared to $533.1 million for the same 1991 period. The increase resulted primarily from a surge of single- family loan refinancing activity during the quarter.
 Net interest income for the third quarter of 1992 increased to $112.2 million compared to $106.8 million for the third quarter of 1991. For the first nine months of 1992, net interest income totaled $332.3 million compared to $329.3 million for the same period of 1991. The results reflect an improved interest rate spread, which was partially offset by a $1.6 billion reduction in interest-earning assets and a rise in non-performing loans. The company's interest rate spread increased to 2.72 percent for the three months ended Sept. 30, 1992, from 2.44 percent for the comparable 1991 period.
 Non-performing assets (non-accrual, past due and restructured loans and real estate held for sale acquired in settlement of loans) totaled $1,219.9 million, or 6.98 percent of assets, at Sept. 30, 1992, compared to $1,141.8 million, or 6.52 percent of assets, at June 30, 1992, and $986.4 million, or 5.22 percent of assets, at Sept. 30, 1991. Of total non-performing assets at Sept. 30, 1992, $254.1 million, or 21 percent, continued to perform according to their contractual terms. Although the level of the company's non-performing loans increased during the 1992 third quarter, the composition of non- performers continued to shift from commercial real estate to residential and multifamily loans, which historically have produced less severe losses for the company. At Sept. 30, 1992, residential and multifamily loans comprised 73 percent of non-performing loans compared to 50 percent at the end of the 1991 third quarter.
 The company's provision for loan losses in the third quarter of 1992 was $31.8 million compared to $35.7 million for the same 1991 period. CalFed's allowance for loan losses totaled $338.7 million at Sept. 30, 1992, compared to $254.7 million at Sept. 30, 1991.
 In the third quarter of 1992, the company recorded provisions for losses on real estate held for investment of $9.2 million compared to $11.9 million for the same 1991 period. The company also recorded provisions on its foreclosed real estate of $32.5 million compared to $33.1 million for the third quarter of 1991.
 Consistent with its strategy to reduce its real estate holdings, at Sept. 30, 1992, the company's real estate investments totaled $114.7 million, down 49 percent from $224.6 million at Dec. 31, 1991, and down 65 percent from $332.3 million at Sept. 30, 1991.
 On Aug. 20, 1992, the OTS approved the bank's revised capital plan which calls for the bank to achieve core and risk-based capital ratios of 5.0 percent and 9.0 percent respectively, by June 30, 1993. The plan also specifies that the bank reach a 10.0 percent risk-based capital ratio by Jan. 1, 1995.
 CalFed Inc.'s total assets were $17.5 billion at Sept. 30, 1992, compared to $18.9 billion at the end of the 1991 third quarter. Stockholders' equity stood at $803.4 million at Sept. 30, 1992, $144.0 million lower than at the end of the 1991 third quarter. The company's equity-to-asset ratio at Sept. 30, 1992, was 4.60 percent compared to 5.01 percent at the end of the same 1991 quarter.
 CalFed Inc.'s tangible book value totaled $19.89 per share at Sept. 30, 1992, compared to $24.74 per share at Sept. 30, 1991.
 CalFed Inc. is a Los Angeles-based financial services holding company. Its principal subsidiary, California Federal Bank, FSB, provides home mortgage loans and consumer banking services through 170 offices in California, Florida, Nevada and Georgia.
 CALFED INC. AND SUBSIDIARIES
 Selected Financial Data
 Sept. 30, Sept. 30,
 1992 1991
 For the Quarter Ended:
 Primary (loss) per share from
 continuing operations ($1.64) ($2.26)
 Fully diluted (loss) per share
 from continuing operations (1.64) (2.26)
 Primary (loss) per share (1.64) (2.23)
 Fully diluted (loss) per share (1.64) (2.23)
 Dividends per common share --- ---
 For the Nine Months Ended:
 Primary (loss) per share from
 continuing operations ($2.66) ($3.18)
 Fully diluted (loss) per share
 from continuing operations (2.66) (3.18)
 Primary (loss) per share (2.04) (3.06)
 Fully diluted loss) per share (2.04) (3.06)
 Dividends per common share --- .06
 End of Period:
 Book value per common share $31.31 $36.98
 Tangible book value per common
 share(a) 19.89 24.74
 Selected Ratios:
 Return on average assets (annualized) (.42) pct. (.48) pct.
 Return on average equity
 (annualized) (8.57) (10.61)
 Dividend payout ratio --- (1.96)
 Stockholders' equity as a percentage
 of total assets 4.60 5.01
 Average equity to average assets
 ratio 4.65 4.56
 Other Data:
 Number of full service savings
 offices 170 189
 (a) The tangible book value per common share excludes goodwill totaling $293.1 million at Sept. 30, 1992, and $313.5 million at Sept. 30, 1991.
 CALFED INC. AND SUBSIDIARIES
 Consolidated Statements of Operations
 (Dollars in millions, except per share data)
 (Unaudited)
 For the For the
 three months ended nine months ended
 Sept. 30, Sept. 30,
 1992 1991 1992 1991
 Interest income:
 Loans receivable $251.1 $367.5 $825.3 $1,185.4
 Mortgage-backed
 securities 41.7 26.2 117.8 107.2
 Investment securities 25.0 34.6 66.5 116.3
 Total interest
 income 317.8 428.3 1,009.6 1,408.9
 Interest expense:
 Deposits 168.6 261.9 552.6 858.0
 Borrowings 37.0 59.6 124.7 221.6
 Total interest
 expense 205.6 321.5 677.3 1,079.6
 Net interest income 112.2 106.8 332.3 329.3
 Provision for
 loan losses 31.8 35.7 105.6 73.9
 Net interest income
 after provision for
 loan losses 80.4 71.1 226.7 255.4
 Other income:
 Fee income 18.1 16.8 59.5 47.3
 Gain on sales
 of loans 4.1 3.9 8.8 10.0
 Gain on sales of
 mortgage-backed
 securities --- 1.7 1.1 10.3
 Loss on sales of
 securities --- (1.8) (1.9) (1.8)
 Other (2.3) (1.2) 11.6 6.4
 Total other income 19.9 19.4 79.1 72.2
 Other expenses:
 Compensation 33.7 40.1 104.5 123.7
 Office occupancy 13.1 15.2 41.3 44.5
 Other general and
 administrative 27.7 24.1 81.5 74.2
 Federal deposit
 insurance premiums
 and special
 assessments 8.2 9.1 25.7 28.7
 Total general and
 administrative
 expenses 82.7 88.5 253.0 271.1


Operations of real
 estate investments 11.0 13.5 37.0 45.5
 Operations of real estate
 held for sale acquired
 in settlement of
 loans net of FDIC
 capital loss coverage 36.4 34.7 65.7 60.1
 Amortization of
 goodwill 3.9 3.9 16.5 11.8
 Total other expenses 134.0 140.6 372.2 388.5
 Loss from continuing
 operations before
 income tax expense (33.7) (50.1) (66.4) (60.9)
 Income tax expense 8.5 7.7 1.9 20.5
 Net loss from
 continuing
 operations (42.2) (57.8) (68.3) (81.4)
 Earnings from
 discontinued
 operations, net
 of taxes --- .7 --- 3.0
 Gain on sale of
 discontinued
 operations, net
 of taxes --- --- 16.0 ---
 Net loss ($42.2) ($57.1) ($52.3) ($78.4)
 Primary loss per
 share from
 continuing
 operations ($1.64) ($2.26) ($2.66) ($3.18)
 Fully diluted loss
 per share from
 continuing
 operations ($1.64) ($2.26) ($2.66) ($3.18)
 Primary loss per
 share ($1.64) ($2.23) ($2.04) ($3.06)
 Fully diluted loss
 per share ($1.64) ($2.23) ($2.04) ($3.06)
 CALFED INC. AND SUBSIDIARIES
 Consolidated Statements of Financial Condition
 (Dollars in Millions)
 (Unaudited)
 Sept. 30, June 30, Dec.31, Sept. 30,
 1992 1992 1991 1991
 Assets
 Cash $895.0 $509.8 $450.4 $403.5
 Certificates of deposit 27.6 26.8 55.8 14.8
 Federal funds sold 120.0 300.0 --- 175.0
 Securities purchased
 under agreements to
 resell 114.2 --- 398.2 ---
 Securities held for sale 396.0 293.6 834.3 1,026.1
 Mortgage-backed securities
 held for sale --- --- 189.7 31.6
 Loans receivable held
 for sale 533.7 50.9 209.7 435.9
 Investment securities 505.6 595.8 16.9 12.2
 Mortgage-backed
 securities held for
 investment 2,347.2 2,483.5 1,197.6 1,107.2
 Loans receivable held
 for investment 11,191.0 11,827.7 13,377.8 13,994.3
 Other FDIC related
 earning assets 4.7 10.3 14.6 40.6
 Federal Home Loan Bank
 stock 150.4 149.3 146.3 171.1
 Interest receivable 119.9 120.6 119.8 161.3
 Real estate investments 114.7 163.2 224.6 332.3
 Real estate held for sale
 acquired in settlement
 of loans 370.6 335.3 273.0 323.9
 Prepaid expenses
 and other assets 147.9 201.1 215.4 166.2
 Deferred income tax
 receivable 14.4 13.2 13.1 7.2
 Premises and equipment 133.5 137.3 149.3 156.9
 Goodwill 293.1 297.0 309.6 313.5
 Assets of discontinued
 operations --- --- 34.4 35.1
 Total assets $17,479.5 $17,515.4 $18,230.5 $18,908.7
 Liabilities and Stockholders' Equity
 Deposits $13,712.2 $13,613.0 $14,827.7 $15,284.9
 Advances from Federal
 Home Loan Banks 1,890.6 1,965.6 1,566.2 1,566.2
 Securities sold under
 agreements to
 repurchase 335.1 336.6 68.1 119.6
 Convertible subordinated
 debentures 122.6 122.6 122.6 122.6
 Other borrowings 363.5 385.0 461.5 518.9
 Other liabilities 252.1 247.0 321.3 340.6
 Liabilities of
 discontinued operations --- --- 7.3 8.5
 Total liabilities 16,676.1 16,669.8 17,374.7 17,961.3
 Stockholders' equity:
 Common stock 25.7 25.7 25.7 25.6
 Additional paid-in
 capital 478.3 478.3 478.3 478.3
 Net unrealized losses
 on equity securities (.6) (.6) (.5) ---
 Retained earnings 300.0 342.2 352.3 443.5
 Total stockholders'
 equity 803.4 845.6 855.8 947.4
 Total liabilities and
 stockholders' equity $17,479.5 $17,515.4 $18,230.5 $18,908.7
 -0- 11/3/92
 /CONTACT: James F. Hurley, 213-930-9750, or Frank W. Moore, 213-932-4203, both of CalFed/
 (CAL) CO: CalFed Inc. ST: California IN: FIN SU: ERN


LS-JL -- LA011x -- 1924 11/03/92 08:33 EST
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