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GREAT WESTERN SELLS NONPERFORMING LOANS; BULK SALE WILL REDUCE LEVEL OF NONEARNING ASSETS

 CHATSWORTH, Calif., Aug. 31 /PRNewswire/ -- Great Western Financial Corp. announced today that it has completed the sale of approximately $200 million of nonperforming single-family real estate loans to a subsidiary of The Bear Stearns Companies Inc.
 As a result of the sale, Great Western's nonperforming assets declined to $1.7 billion, or 4.50 percent of total assets. Nonperforming assets were $1.92 billion, or 4.94 percent of assets in July 1993; $1.95 billion, or 5.01 percent of total assets, at June 30; and restated to $2 billion, or 5.17 percent, at March 31, 1993.
 The sale will result in an additional provision for losses of approximately $50 million.
 "Great Western will continue the aggressive disposition of nonperforming assets, announced in the third quarter of 1992, throughout the remainder of 1993 and expects its level of nonperforming assets to decline further," said James F. Montgomery, chairman and chief executive.
 "This bulk sale transaction, which has been underway for several months, is entirely consistent with the company's plan for the accelerated disposal of nonperformers," said Montgomery.
 Year to date, the company has sold approximately $643 million of troubled assets compared with $144 million in the comparable period of 1992.
 "Great Western will continue to utilize a variety of methods to dispose of problem loans and real estate," continued Montgomery. "These include auctions, residential real estate brokers, possible future bulk sales and the use of consultants to manage the disposition of property." For example, Montgomery noted, a Great Western auction of 103 single- family properties conducted in August resulted in the sale of 102 properties at an average price of 132 percent of minimum bid.
 Loans for the recent bulk sale were carefully selected by Great Western on the basis of the lack of current equity and the likelihood that they would not return to performing status. They are primarily loans with more than an 80 percent original loan to value ratio. Most of these loans were originated after 1987 and are generally secured by properties located in Southern California.
 All affected borrowers will be notified that their loan servicing has been transferred to The Bear Stearns Companies Inc. subsidiary.
 Great Western Financial Corp. reported net earnings of $52.6 million, or $.36 per share, for the quarter ended June 30, 1993, and net earnings of $97.8 million, or $.65 per share, for the first six months of 1993. The company exceeds all fully phased-in capital requirements for well-capitalized institutions. At June 30, 1993, risk- adjusted capital was 11.80 percent compared with a minimum federal standard for well capitalized institutions of 10 percent. Leverage capital was 5.76 percent compared with a minimum federal standard for well-capitalized institutions of 3 percent.
 With assets of $38 billion, Great Western Financial Corp. is a diversified financial services company operating more than 1,100 mortgage lending, retail banking, and consumer finance offices nationwide. The company's principal subsidiary, Great Western Bank, is a mortgage-oriented consumer bank which operates extensive banking branch networks in California and Florida.
 -0- 8/31/93
 /CONTACT: Ian Campbell, 818-775-3773, or Roger Cruzen, 818-775-3658; or (In Florida), Gordon Turner, 407-642-5583/


CO: Great Western Financial Corp. ST: California IN: FIN SU:

MF-BP -- LA005 -- 7361 08/31/93 09:00 EDT
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Publication:PR Newswire
Date:Aug 31, 1993
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