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WASHINGTON MUTUAL ANNOUNCES RECORD SECOND-QUARTER EARNINGS, INCREASES CASH DIVIDEND AND ELECTS NEW BOARD MEMBER

 WASHINGTON MUTUAL ANNOUNCES RECORD SECOND-QUARTER EARNINGS,
 INCREASES CASH DIVIDEND AND ELECTS NEW BOARD MEMBER
 SPOKANE, Wash., July 22 /PRNewswire/ -- Washington Mutual Savings Bank (NASDAQ: WAMU) announced today record second-quarter earnings of $22.8 million, up 36 percent from $16.8 million for second quarter 1991. Fully diluted earnings per share were 70 cents, up from 63 cents a year ago. For the first six months of 1992, earnings of $42.5 million increased 33 percent from $31.8 million for the same period a year earlier.
 The board of directors declared an increased cash dividend on the common stock of 13 cents per share, an 8-percent increase from 12 cents. That marks the seventh consecutive increase in the quarterly cash dividend. The board also declared a dividend on preferred stock of 93.75 cents per share. Both dividends are payable Aug. 15, 1992, to shareholders of record on July 31, 1992.
 The board also announced that Roger H. Eigsti, president and chief executive officer of SAFECO Corp., has been elected to the board of directors effective immediately.
 "We continued to make excellent progress toward our strategic objectives," said Kerry Killinger, Washington Mutual's chairman, president and chief executive officer. "We set a record for second- quarter earnings and broke last quarter's records for net interest income and total lending. Our market share increased because of completing the acquisition of Great Northwest Bank, opening new financial centers and implementing the highly successful 'Merge with Washington Mutual' marketing effort."
 Killinger said, "The 'Merge with Washington Mutual' campaign emphasizes the position of Washington Mutual as the alternative to large out-of-state controlled banks by showing the benefits of banking with an independently owned, locally managed institution that devotes itself to meeting the financial needs of Northwest consumers."
 The campaign helped to produce a record for new checking accounts opened during the second quarter when they were opened at a rate twice that of first quarter 1992 and three times that of a year earlier, Killinger added.
 Favorable interest rates, the bank's continued focus on consumer banking, and a strong capital position contributed to net interest income of $70.3 million for the quarter, up from $50 million for second quarter 1991. The net interest margin was 3.69 percent for second quarter 1992, up significantly from 3.20 percent for second quarter 1991 but down slightly from 3.81 percent for first quarter 1992 as a result of acquiring Great Northwest Bank.
 The bank enjoyed a record-setting quarter for total lending with $985.6 million versus $609.6 million a year earlier. Residential loan originations increased to a record $614.5 million from $315.7 million a year ago. Residential construction loan originations increased to $175.8 million for second quarter 1992 from $132.8 million a year ago. And consumer loan originations grew to a record $176.3 million for the quarter just ended from $154.7 million for second quarter 1991.
 Killinger said that the large number of loans refinanced due to low interest rates contributed to the record. He added that the recent further reduction in interest rates on residential loans may lead to another round of refinancing by home owners.
 Because of the acquisition of Great Northwest Bank and the bank's successful marketing effort, deposits grew to $5.4 billion at quarter end from $4.8 billion at March 31, 1992. WM Life annuities increased to $502.3 million at June 30, 1992, from $468.3 million at March 31, 1992, and assets of the Composite Group of mutual funds rose to $911.1 million at June 30, 1992, from $866.3 million at March 31, 1992.
 Killinger said that one-time expenses associated with the acquisition and conversion of Great Northwest Bank contributed to a slight increase in other expense as a percentage of operating revenue (net interest income and other income) to 58.7 percent for second quarter 1992 from 58 percent a year earlier.
 The bank acted during the quarter to reduce future interest expense when it prepaid a $25 million advance from the Federal Home Loan Bank for an after-tax cost of $580,000. In addition, the bank redeemed on June 15, 1992, all of its 15 percent subordinated capital notes due June 15, 1997. The cost of redemption was recognized in the first quarter.
 Total nonperforming assets as a percentage of total assets declined to 1.80 percent of total assets at quarter end, down from 1.96 percent three months earlier and 2.13 percent at June 30, 1991. Total nonperforming assets were $144.2 million at June 30, 1992, versus $142.5 million at March 31, 1992. During the quarter, the bank sold several real estate owned properties, nearly offsetting increased nonperforming loans brought about by the ongoing weakness in commercial real estate markets, especially in California, and the acquisition of Great Northwest Bank.
 Killinger said that the substantial expansion in the bank's loan portfolio over the past year to $5.4 billion from $4.5 billion led to an increase in the quarterly provision for loan losses to $3 million from $2.5 million.
 The nonbanking subsidiaries had pretax operating income (before amortization of intangible assets and intercompany eliminations) of $2.6 million for second quarter 1992 versus $3.3 million a year earlier. In the quarter just ended, the life insurance subsidiary set aside $1.5 million for an anticipated industry-wide assessment. This assessment reduced the otherwise strong performance of the bank's securities and insurance subsidiaries.
 In February 1992, the Financial Accounting Standards Board (FASB) changed the accounting principle governing accounting for income taxes. The bank currently intends to implement the change in first quarter 1993, as required by FASB. Earlier adoption is permitted and if that were to occur in 1992, there would be a cumulative positive adjustment to earnings of between approximately $8 million and $10 million on an after-tax basis.
 During the second quarter, the bank opened two new branches in the south Puget Sound region and fully integrated 14 Great Northwest Bank branches. When Great Northwest was converted to Washington Mutual systems in June, three Great Northwest locations in close proximity to Washington Mutual financial centers were closed. At March 31, 1992, Great Northwest had assets of $710 million, deposits of $583 million and stockholders' equity of $53 million.
 "We performed very strongly during the first six months in nearly all areas of the organization. We intend to continue moving toward our corporate objectives and striving to improve every facet of our performance. When we combine our market position with our capital strength and earnings stream, the outlook for the rest of the year continues to be good," said Killinger.
 Serving the financial needs of Northwest consumers, Washington Mutual is the largest independent bank headquartered in Washington, having assets of $8 billion and operating 118 financial centers and 18 home loan centers in Washington, Oregon and Idaho.
 WASHINGTON MUTUAL SAVINGS BANK AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited, in thousands, except for per-share amounts)
 Quarter Six Months
 Period Ended June 30: 1992 1991 1992 1991
 INTEREST INCOME
 Loans $131,713 $120,511 $253,114 $239,848
 Mortgage-backed
 securities 33,912 35,756 67,409 72,633
 Investment securities 6,912 6,702 13,446 13,457
 Cash equivalents 678 675 1,034 1,550
 Total interest income 173,215 163,644 335,003 327,488
 INTEREST EXPENSE
 Deposits 73,639 77,037 144,131 155,725
 Borrowings 29,318 36,584 58,042 73,971
 Total interest
 expense 102,957 113,621 202,173 229,696
 Net interest income 70,258 50,023 132,830 97,792
 Provision for loan
 losses 3,000 2,500 5,500 5,000
 Net interest income
 after provision for
 loan losses 67,258 47,523 127,330 92,792
 OTHER INCOME
 Service fees 13,012 10,403 23,722 19,360
 Loan servicing fees 2,617 2,645 5,345 5,165
 Other operating income 2,353 2,653 4,570 5,429
 Gain on sale of
 residential loans 4,320 4,356 8,029 7,490
 Gain on sale of other
 assets, net 888 229 4,256 (1,199)
 Total other income 23,190 20,286 45,922 36,245
 OTHER EXPENSE
 Salaries and employee
 benefits 25,266 18,483 46,581 36,300
 Occupancy and
 equipment 7,658 6,658 14,762 13,428
 Deposit insurance 3,055 2,249 5,959 4,512
 Other operating
 expense 15,801 9,772 27,015 18,971
 Amortization of goodwill
 and other intangible
 assets 2,726 1,763 4,973 3,524
 Real estate owned
 operations, net of
 write-downs 192 (531) 1,300 (481)
 Write-down of
 other assets 120 2,383 120 2,383
 Total other expense 54,818 40,777 100,710 78,637
 Income before federal
 income tax and
 extraordinary items 35,630 27,032 72,542 50,400
 Federal income tax 12,227 10,239 25,458 18,555
 Income before
 extraordinary items 23,403 16,793 47,084 31,845
 Extraordinary items,
 net of federal income
 tax effect (580) -- (4,615) --
 NET INCOME $22,823 $16,793 $42,469 $31,845
 NET INCOME ATTRIBUTABLE
 TO COMMON STOCK $21,604 $15,574 $40,032 $29,407
 Per share amounts -
 primary:
 Income before
 extraordinary items $0.76 $0.67 $1.56 $1.27
 Extraordinary items,
 net of federal income
 tax effect (0.02) -- (0.16) --
 Net income $0.74 $0.67 $1.40 $1.27
 Per share amounts -
 fully diluted
 Income before
 extraordinary items $0.72 $0.63 $1.47 $1.20
 Extraordinary items,
 net of federal income
 tax effect (0.02) -- (0.15) --
 Net income $0.70 $0.63 $1.32 $1.20

 Return on average
 assets (pct) 1.15 0.97 1.13 0.92
 Return on average
 equity (pct) 14.80 15.30 14.32 14.78
 WASHINGTON MUTUAL SAVINGS BANK AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 (Unaudited, dollars in thousands, except for per-share amounts)
 June 30, Dec. 31,
 1992 1991
 ASSETS
 Cash and cash equivalents $156,023 $140,697
 Trading account securities 2,519 1,556
 Securities held for sale -- 23,447
 Investment securities 334,149 300,193
 Mortgage-backed securities - originated 349,998 416,378
 Mortgage-backed securities - purchased 1,379,119 1,176,928
 Loans 5,411,652 4,708,393
 Real estate owned 79,218 87,327
 Bank premises and equipment 63,830 51,387
 Goodwill and other intangible assets 66,720 53,481
 Other assets 164,554 157,964
 Total assets $8,007,782 $7,117,751
 LIABILITIES
 Deposits:
 Checking accounts $452,688 $368,530
 Savings and money market accounts 1,476,632 1,260,642
 Time certificates 3,493,026 3,172,634
 Total deposits 5,422,346 4,801,806
 Annuities 502,328 433,767
 Federal funds purchased 20,000 --
 Securities sold under agreements
 to repurchase 811,099 720,042
 Advances from the Federal Home Loan Bank 429,834 391,234
 Other borrowings 7,000 7,000
 Other liabilities 145,203 104,532
 Subordinated capital notes 40,000 99,700
 Total liabilities 7,377,810 6,558,081
 STOCKHOLDERS' EQUITY
 Preferred stock, $1 par value: 5,500,000
 shares authorized - 1,300,000 and
 1,300,000 shares issued and outstanding 1,300 1,300
 Common stock, $1 par value: 75,000,000 shares
 authorized - 29,681,311 and 27,918,111 shares
 issued and outstanding 29,681 27,918
 Capital surplus 244,944 210,200
 Retained earnings 354,047 320,674
 Valuation reserve for equity securities -- (422)
 Total stockholders' equity 629,972 559,670
 Total liabilities and stockholders'
 equity $8,007,782 $7,117,751
 Book value per common share $19.01 $17.84
 Tangible book value per common share $16.52 $15.64
 WASHINGTON MUTUAL SAVINGS BANK AND SUBSIDIARIES
 SELECTED FINANCIAL INFORMATION
 (Unaudited, dollars in millions)
 Quarter Six Months
 Ended June 30: 1992 1991 1992 1991
 LOAN VOLUME
 Loan originations
 by property type:
 Residential real
 estate $614.5 $315.7 $1,201.4 $509.5
 Residential
 construction 175.8 132.8 272.5 203.9
 Consumer 176.3 154.7 273.9 247.9
 Apartment buildings 12.8 4.9 21.0 4.9
 Other commercial
 real estate 6.2 1.5 7.1 1.5
 Loan purchases 597.0 -- 613.8 --
 Total loan volume $1,582.6 $609.6 $2,389.7 $967.7
 NONBANKING SUBSIDIARY
 PRETAX OPERATING INCOME:
 Operating income $24.0 $20.2 $46.0 $38.2
 Operating expense 21.4 16.9 40.1 32.7
 Net income before taxes,
 amortization of goodwill and
 other intangible assets, and
 elimination of intercompany
 transactions $2.6 $3.3 $5.9 $5.5
 NET INTEREST SPREAD:
 Yield on loan
 portfolio (pct) 9.90 10.59 10.14 10.61
 Yield on investments (pct) 8.05 8.96 8.26 9.02
 Combined yield on earning
 assets (pct) 9.37 10.10 9.60 10.13
 Cost of deposits (pct) 5.44 6.82 5.64 6.95
 Cost of borrowings (pct) 6.78 7.95 7.04 8.00
 Combined cost of
 funds (pct) 5.76 7.14 5.98 7.25
 Net interest spread (pct) 3.61 2.96 3.62 2.88
 Net interest margin (pct) 3.69 3.20 3.81 3.02
 June 30, March 31, Dec. 31, June 30,
 1992 1992 1991 1991
 INTEREST SENSITIVITY
 One-year interest
 sensitivity using
 principal balances ($1,082.1) ($1,106.0) ($1,228.5) ($1,607.3)
 Gap as a percentage of
 total assets (pct) -13.5 -15.2 -17.3 -23.5
 One-year interest
 sensitivity using
 cash flow basis ($745.8) ($781.4) ($954.5) ($1,299.4)
 Gap as a percentage of
 total assets (pct) -9.3 -10.7 -13.4 -19.0
 CAPITAL ADEQUACY
 Stockholders' equity
 ratio (pct) 7.87 7.94 7.86 6.54
 FDIC regulatory capital
 ratios and (required level):
 Leverage capital
 ratio (pct) 7.11 7.26 7.10 5.62
 Risk-based core capital
 (4.00 percent at
 Dec. 31, 1992) (pct) 10.82 11.12 11.03 8.97
 Risk-based total capital
 (8.00 percent
 at Dec. 31, 1992) (pct) 12.76 14.43 14.40 12.52
 WASHINGTON MUTUAL SAVINGS BANK AND SUBSIDIARIES
 SELECTED FINANCIAL INFORMATION
 (Unaudited, dollars in millions)
 June 30, March 31, Dec. 31, June 30,
 1992 1992 1991 1991
 RESERVE FOR LOAN LOSSES
 Balance at beginning
 of quarter $52.8 $50.8 $52.4 $52.0
 Provision for loan
 losses 3.0 2.5 2.5 2.5
 Reserves charged off,
 net of recoveries (2.7) (0.6) (4.1) (6.7)
 Reserve added through
 acquisitions 5.2 0.1 -- --
 Balance at end
 of quarter $58.3 $52.8 $50.8 $47.8
 Allocated reserves:
 Residential
 construction $1.6 $1.8 $1.9 $0.9
 Apartment buildings and
 other commercial
 real estate 18.0 10.3 5.7 3.6
 Commercial 5.5 8.5 10.1 21.3
 Total 25.1 20.6 17.7 25.8
 Unallocated reserves 33.2 32.2 33.1 22.0
 Total reserve for
 loan losses $58.3 $52.8 $50.8 $47.8
 Reserve for loan losses
 as a percentage of:
 Total loans (pct) 1.08 1.13 1.08 1.06
 Total loans, excluding
 performing residential
 loans (pct) 2.59 2.58 2.49 2.48
 Nonperforming
 assets (pct) 40.45 37.07 37.94 32.85
 Nonperforming assets,
 less real estate
 owned (pct) 89.79 92.22 109.14 93.82
 LOANS BY COLLATERAL TYPE
 Residential real
 estate $3,173.4 $2,651.3 $2,678.7 $2,615.9
 Residential
 construction 316.6 318.1 319.9 308.3
 Apartment buildings 409.6 331.8 323.4 295.8
 Other commercial
 real estate 565.2 481.3 477.3 450.3
 Consumer 990.0 935.9 937.7 865.4
 Commercial 15.2 17.8 22.2 42.3
 Loan loss reserves (58.3) (52.8) (50.8) (47.8)
 Total loans $5,411.7 $4,683.4 $4,708.4 $4,530.2
 NONPERFORMING ASSETS
 Nonperforming loans:
 Loans under foreclosure
 or on nonaccrual basis $55.4 $48.9 $38.2 $41.1
 Restructured loans 9.6 8.4 8.4 9.8
 Total nonperforming
 loans 65.0 57.3 46.6 50.9
 Real estate owned:
 Real estate owned
 (including in-substance
 foreclosures 121.0 129.5 133.5 143.4
 Write-downs or charge
 offs recorded on real
 estate owned (30.0) (35.0) (38.3) (47.6)
 Reserve for losses (11.8) (9.3) (7.9) (1.2)
 Total real estate
 owned, net 79.2 85.2 87.3 94.6
 Total nonperforming
 assets $144.2 $142.5 $133.9 $145.5
 Nonperforming assets
 by collateral type:
 Residential real estate $18.8 $18.9 $15.4 $11.8
 Residential construction 19.1 16.9 17.8 11.7
 Apartment buildings 41.2 45.2 39.8 52.3
 Other commercial
 real estate 52.1 49.9 55.3 63.1
 Consumer 6.1 6.2 5.2 3.8
 Commercial 6.9 5.4 0.4 2.8
 Total nonperforming
 assets $144.2 $142.5 $133.9 $145.5
 As a percentage of
 total loans (pct) 2.66 3.04 2.84 3.21
 As a percentage of
 total assets (pct) 1.80 1.96 1.88 2.13
 Year-to-date average
 cash yield on
 restructured
 loans (pct) 10.18 10.95 8.71 8.84
 -0- 7/22/92
 /CONTACT: Scott F. Selby of Washington Mutual Savings Bank, 206-461-3186/
 (WAMU) CO: Washington Mutual Savings Bank ST: Washington IN: FIN SU: ERN DIV


LM -- SE001 -- 1931 07/22/92 12:58 EDT
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