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WASHINGTON MUTUAL ANNOUNCES HIGHER EARNINGS, 50-PERCENT STOCK DIVIDEND, INCREASED CASH DIVIDEND

 WASHINGTON MUTUAL ANNOUNCES HIGHER EARNINGS,
 50-PERCENT STOCK DIVIDEND, INCREASED CASH DIVIDEND
 SEATTLE, Jan. 21 /PRNewswire/ -- Washington Mutual Savings Bank (NASDAQ: WAMU) announced today earnings of $18.3 million for fourth quarter 1991 and $67.5 million for 1991, up from quarterly earnings of $14.7 million and annual earnings of $925,000 for the same 1990 periods.
 The board of directors declared today a 50-percent stock dividend on the common stock (having the same effect as a three-for-two stock split) and a cash dividend of 11 cents per share on the common stock. The cash dividend applies to all shares of common stock resulting from the stock dividend and is, in effect, a 10-percent increase over the 15-cents-per-share dividend declared for third quarter 1991. The directors also declared a dividend on the preferred stock of 93.75 cents per share. The dividends are payable Feb. 14 to shareholders of record on Jan. 31.
 Fully diluted earnings per common share (before the effect of the stock dividend) were 88 cents for fourth quarter 1991, compared to 84 cents a year ago. For the year, earnings were $3.57 per share, up from a loss of 26 cents
per share in 1990. Earnings for 1990 were reduced by the bank's adopting in third quarter 1990 a more conservative reserving methodology and adding $55 million to reserves.
 "The stock dividend and the increased cash dividend reflect our strong performance and the board of directors' continued confidence in the progress of the bank toward our strategic goals," said Kerry Killinger, chairman, president and chief executive officer.
 "In the fourth quarter, we increased net interest income, set a residential lending record, increased retail deposits, maintained good credit quality, opened two de novo financial centers and a new home loan center, and strengthened our capital position. We also completed the acquisitions of CrossLand Savings' branches and deposits in Oregon and Washington and of Sound Savings in Seattle, announced the acquisition of the Washington branches and deposits of World Savings and Loan of America, and made progress on the acquisition of Great Northwest Bank."
 The bank's consumer banking strategy, a favorable interest rate environment and a strengthened capital position all contributed to increased net interest income for the quarter of $55.2 million, up from $43.8 million a year ago. Net interest income grew to $204.7 million for 1991 from $168.2 million for 1990. The net interest margin continued to increase to 3.45 percent for fourth quarter 1991 versus 2.74 percent a year earlier and 3.17 percent for the year just ended versus 2.61 percent in 1990.
 Lower interest rates helped to produce a record volume for residential lending in fourth quarter 1991. The refinancing of residential loans coupled with originations for the purchase of homes resulted in originations of $398.1 million in residential loans, up from $199.5 million in fourth quarter 1990. The high volume of residential loan applications, $740.9 million in the fourth quarter, should result in strong residential lending in first quarter 1992. Residential construction loan originations were $113.3 million for fourth quarter 1991, compared to $107.3 million for the same period last year.
 Even though consumer loan originations decreased slightly to $96.8 million in the fourth quarter from $99.1 million a year ago, consumer lending for 1991 increased by $20.5 million to a record $452.5 million. Total lending increased for the quarter to $639.2 million from $420.4 million one year earlier and increased for the year by $7.7 million to a record $2.1 billion.
 Total deposits increased from $4.5 billion at Dec. 31, 1990, to $4.8 billion one year later. Contributing to this increase were the completed acquisitions of Vancouver Federal Savings Bank, of Vancouver, Wash., in the third quarter and the deposits and branches of CrossLand Savings, FSB in the fourth quarter. Other retail funds under management included WM Life annuities, which grew from $316.9 million at the end of 1990 to $433.8 million a year later, and assets of the Composite Group of mutual funds, which increased from $739.4 million at Dec. 31, 1990, to $828.3 million at year-end 1991.
 The bank operated more efficiently as other expense as a percentage of operating revenue (net interest income and other income) dropped from 66.6 percent for 1990 to 58.4 percent for 1991. While expenses did rise in the latter part of 1991, the increase was largely caused by acquisition expenses.
 Nonperforming assets decreased from $155.3 million at Dec. 31, 1990, to $133.9 million at year-end 1991. Total nonperforming assets represented 1.88 percent of total assets at Dec. 31, 1991, compared to 2.24 percent a year earlier. While a slower Northwest economy contributed to a slight increase in nonperforming residential loans from third quarter 1991 to the period just ended, the bank's delinquency rates remained below national and state averages.
 Nonbanking subsidiaries continued their improved performance, with pretax operating income of $2.2 million for fourth quarter 1991 versus $1.5 million a year ago and $10.5 million for 1991 versus $6.5 million for 1990.
 The bank announced Dec. 18, 1991, that it had signed an agreement to acquire the two Washington branches of World Savings and Loan Association of America. The branches, located in the Puget Sound region, have deposits of approximately $40 million. The acquisition is expected to be completed in the spring.
 Killinger said that he expects the bank to complete in the spring the acquisition of Great Northwest Financial Corp. (GNWF), of Bremerton, Wash. GNWF's subsidiary, Great Northwest Bank, operates 17 branches and has approximately $710 million of assets, $583 million of deposits and $53 million of stockholders' equity.
 "We have excellent momentum as we enter 1992. Retail banking operations are strong, we're smoothly integrating our acquisitions, and our focus on consumer banking is successful. Our regulatory capital ratios are among the strongest of any major bank in the Northwest. We expect that in 1992 we will continue to make excellent progress toward our corporate goals," said Killinger.
 With $7.1 billion in assets, Washington Mutual is the Northwest's premier consumer bank, operating 100 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 Year
 Ended Dec. 31: 1991 1990 1991 1990
 INTEREST INCOME
 Loans $123,589 $124,312 $487,170 $479,025
 Mortgage-backed securities 33,007 34,867 139,623 150,044
 Investment securities:
 Taxable interest 4,593 3,799 17,331 15,696
 Nontaxable interest 1,009 1,036 3,451 4,712
 Dividend income 998 2,461 4,964 9,792
 Total income on investment
 securities 6,600 7,296 25,746 30,200
 Cash equivalents 601 2,037 2,931 6,568
 Total interest income 163,797 168,512 655,470 665,837
 INTEREST EXPENSE
 Deposits 73,810 80,214 309,594 309,458
 Borrowings 34,755 44,525 141,207 188,220
 Total interest expense 108,565 124,739 450,801 497,678
 Net interest income 55,232 43,773 204,669 168,159
 Provision for loan losses 2,500 2,071 20,500 61,350
 Net interest income after
 provision for loan losses 52,732 41,702 184,169 106,809
 OTHER INCOME
 Service fees 10,271 9,043 39,405 38,168
 Loan servicing fees 2,923 2,106 10,858 8,000
 Other operating income 2,364 3,568 10,468 11,708
 Interest on federal income
 tax refund -- -- 9,085 654
 Gain on sale of residential
 loans 7,906 1,638 20,766 5,068
 Gain on sale of other
 assets, net (571) 876 2,299 1,156
 Total other income 22,893 17,231 92,881 64,754
 OTHER EXPENSE
 Salaries and employee
 benefits 21,151 18,041 76,932 71,707
 Occupancy and equipment 7,463 7,177 27,306 27,642
 Deposit insurance 2,741 1,461 9,964 5,586
 Other operating expense 11,959 10,456 41,775 38,695
 Amortization of goodwill and
 other intangible assets 2,230 1,386 7,707 4,827
 Real estate owned operations,
 net of write-downs 44 (1,681) 5,296 6,517
 Write-down of other assets 1,233 28 4,714 138
 Total other expense 46,821 36,868 173,694 155,112
 Income before federal
 income taxes 28,804 22,065 103,356 16,451
 Federal income tax 10,525 7,318 35,852 15,526
 NET INCOME $ 18,279 $ 14,747 $ 67,504 $ 925
 NET INCOME ATTRIBUTABLE
 TO COMMON STOCK $ 17,061 $ 13,529 $ 62,629 $ (3,950)
 EARNINGS PER COMMON SHARE(A)
 Primary $ 0.92 $ 0.88 $ 3.78 $ (0.26)
 Fully diluted 0.88 0.84 3.57 (0.26)
 RETURN ON AVERAGE
 ASSETS (percents) 1.04 0.84 0.97 0.01
 RETURN ON AVERAGE
 EQUITY (percents) 13.36 14.30 14.12 0.22
 (A)EARNINGS PER COMMON
 SHARE RESTATED FOR FIRST-
 QUARTER 1992 50-PERCENT
 STOCK DIVIDEND
 Primary $ 0.61 $ 0.59 $ 2.52 $ (0.17)
 Fully diluted 0.58 0.56 2.38 (0.17)
 WASHINGTON MUTUAL SAVINGS BANK AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 (Unaudited, in thousands, except for per-share amounts)
 Dec. 31: 1991 1990
 ASSETS
 Cash and cash equivalents $ 140,697 $ 149,447
 Trading account securities 1,556 1,201
 Securities held for sale 23,447 45,453
 Investment securities 300,193 276,665
 Mortgage-backed securities - originated 416,378 435,236
 Mortgage-backed securities - purchased 1,176,928 1,181,726
 Loans 4,708,393 4,531,401
 Real estate owned 87,327 87,880
 Bank premises and equipment 51,387 37,104
 Goodwill and other intangible assets 53,481 48,547
 Other assets 157,964 127,161
 Total assets $7,117,751 $6,921,821
 LIABILITIES
 Deposits:
 Checking accounts $ 368,530 $ 249,440
 Savings and money market accounts 1,260,642 1,100,599
 Time certificates 3,172,634 3,151,276
 Total deposits 4,801,806 4,501,315
 Annuities 433,767 316,884
 Securities sold under agreements
 to repurchase 720,042 820,189
 Advances from the Federal Home Loan Bank 391,234 475,461
 Other borrowings 7,000 221,837
 Other liabilities 104,532 70,972
 Subordinated capital notes 99,700 99,667
 Total liabilities 6,558,081 6,506,325
 STOCKHOLDERS' EQUITY(A)
 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:
 50,000,000 shares authorized -
 18,612,074 and 15,378,704 shares
 issued and outstanding 18,612 15,379
 Capital surplus 219,506 135,908
 Retained earnings 320,674 266,863
 Valuation reserve for equity securities (422) (3,954)
 Total stockholders' equity 559,670 415,496
 Total liabilities and stockholders'
 equity $7,117,751 $6,921,821
 BOOK VALUE PER COMMON SHARE $ 26.76 $ 23.50
 TANGIBLE BOOK VALUE PER COMMON SHARE 23.46 19.89
 (A)STOCKHOLDERS' EQUITY
 RESTATED FOR FIRST-QUARTER 1992
 50-PERCENT STOCK DIVIDEND
 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:
 50,000,000 shares authorized -
 27,918,111 and 23,068,056 shares
 issued and outstanding 27,918 23,068
 Capital surplus 210,200 128,219
 Retained earnings 320,674 266,863
 Valuation reserve for equity securities (422) (3,954)
 Total stockholders' equity $ 559,670 $ 415,496
 BOOK VALUE PER COMMON SHARE $ 17.84 $ 15.67
 TANGIBLE BOOK VALUE PER COMMON SHARE 15.64 13.26
 WASHINGTON MUTUAL SAVINGS BANK AND SUBSIDIARIES
 SELECTED FINANCIAL INFORMATION
 (Unaudited, dollars in millions)
 Quarter Year
 Ended Dec. 31: 1991 1990 1991 1990
 LOAN VOLUME
 Loan originations by property type:
 Residential real estate $ 398.1 $ 199.5 $1,141.0 $1,082.7
 Residential construction 113.3 107.3 449.4 539.6
 Commercial real estate 31.0 14.5 56.5 37.4
 Consumer 96.8 99.1 452.5 432.0
 Loan purchases -- -- 199.8 230.6
 Total loan volume $ 639.2 $ 420.4 $2,299.2 $2,322.3
 NONBANKING SUBSIDIARY PRETAX
 OPERATING INCOME
 Operating income $ 20.8 $ 16.8 $ 79.1 $ 66.4
 Operating expense 18.6 15.3 68.6 59.9
 Net income before taxes,
 amortization of goodwill and
 other intangible assets, and
 elimination of intercompany
 transactions $ 2.2 $ 1.5 $ 10.5 $ 6.5
 NET INTEREST SPREAD
 Yield on loan portfolio
 (percents) 10.50 10.54 10.61 10.66
 Yield on investments
 (percents) 8.72 9.34 8.84 9.21
 Combined yield on earning
 assets (percents) 10.01 10.19 10.08 10.20
 Cost of deposits (percents) 6.38 7.28 6.73 7.43
 Cost of borrowings (percents) 7.91 8.39 7.99 8.46
 Combined cost of funds
 (percents) 6.76 7.64 7.08 7.79
 Net interest spread
 (percents) 3.25 2.55 3.00 2.41
 Net interest margin
 (percents) 3.45 2.74 3.17 2.61
 Dec. 31, Sept. 30, Dec. 31,
 1991 1991 1990
 INTEREST SENSITIVITY
 One-year interest sensitivity
 using principal balances $(1,228.5) $(1,703.1) $(1,278.2)
 Gap as a percentage of total
 assets (percents) -17.3 -24.4 -18.5
 One-year interest sensitivity
 using cash flow basis $ (954.5) $(1,379.9) $(1,085.5)
 Gap as a percentage of total
 assets (percents) -13.4 -19.8 -15.7
 CAPITAL ADEQUACY
 Stockholders' equity ratio
 (percents) 7.86 7.79 6.00
 FDIC regulatory capital ratios and (required level):
 Leverage capital ratio (percents) 7.10 6.97 5.07
 Risk-based core capital
 (4.00 percent at Dec. 31,
 1992) (percents) 11.03 10.92 8.25
 Risk-based total capital
 (8.00 percent at Dec. 31,
 1992) (percents) 14.40 14.38 11.79
 WASHINGTON MUTUAL SAVINGS BANK AND SUBSIDIARIES
 SELECTED FINANCIAL INFORMATION
 (Unaudited, dollars in millions)
 Dec. 31, Sept. 30, Dec. 31,
 1991 1991 1990
 LOAN LOSS RESERVES
 Balance at beginning of
 quarter $ 52.4 $ 47.8 $ 58.9
 Provision for loan losses 2.5 13.0 2.1
 Reserves charged off, net
 of recoveries (4.1) (9.0) (8.8)
 Reserve added through
 acquisition -- 0.6 --
 Balance at end of quarter $ 50.8 $ 52.4 $ 52.2
 Loan loss reserves as a percentage of:
 Total loans (percents) 1.08 1.13 1.15
 Total loans, excluding performing
 residential loans (percents) 2.49 2.57 2.78
 Nonperforming assets (percents) 37.94 40.07 33.62
 Nonperforming assets, less real
 estate owned (percents) 109.14 97.25 77.48
 LOANS BY COLLATERAL TYPE
 Residential real estate $2,678.7 $2,623.0 $2,660.3
 Residential construction 319.9 314.9 313.3
 Commercial real estate 800.7 812.2 788.4
 Consumer 937.7 918.9 767.2
 Commercial credits 22.2 32.0 54.4
 Loan loss reserves (50.8) (52.4) (52.2)
 Total loans $4,708.4 $4,648.6 $4,531.4
 NONPERFORMING ASSETS
 Nonperforming loans:
 Loans under foreclosure or
 on nonaccrual basis $ 38.2 $ 44.1 $ 50.1
 Restructured loans 8.4 9.8 17.3
 Total nonperforming loans 46.6 53.9 67.4
 Real estate owned:
 Real estate owned (including
 in-substance foreclosures) 133.5 121.5 134.8
 Write-downs or charge offs
 recorded on real estate owned (38.3) (37.8) (40.3)
 Real estate owned loss reserve (7.9) (6.9) (6.6)
 Total real estate owned, net 87.3 76.8 87.9
 Total nonperforming assets $ 133.9 $ 130.7 $ 155.3
 Nonperforming assets by collateral type:
 Residential real estate $ 15.4 $ 13.2 $ 10.0
 Residential construction 17.8 14.5 4.2
 Commercial real estate 95.1 98.2 132.4
 Consumer 5.2 4.4 3.3
 Commercial 0.4 0.4 5.4
 Total nonperforming assets $ 133.9 $ 130.7 $ 155.3
 As a percentage of total
 loans (percents) 2.84 2.81 3.43
 As a percentage of total
 assets (percents) 1.88 1.87 2.24
 Year-to-date average cash yield on
 restructured loans (percents) 7.87 8.01 9.82
 -0- 1/21/92
 /CONTACT: Scott F. Selby of Washington Mutual Savings Bank, 206-461-3186/
 (WAMU) CO: Washington Mutual Savings Bank ST: Washington IN: FIN SU: ERN


SC -- SE007 -- 2138 01/21/92 18:09 EST
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