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WASHINGTON MUTUAL ANNOUNCES RECORD THIRD-QUARTER EARNINGS AND INCREASED CASH DIVIDEND

 PORTLAND, Ore., Oct. 19 /PRNewswire/ -- Washington Mutual Savings Bank (NASDAQ: WAMU) announced today record third-quarter earnings of $46.9 million, up 59 percent from $29.4 million for third quarter 1992. Fully diluted earnings per share were 70 cents, up from 50 cents a year earlier. For the first nine months of 1993, earnings of $131.1 million, or $1.96 per share, increased 66 percent from $79.2 million, or $1.38 per share, for the same period a year earlier. (Per share figures have been restated to reflect the 50 percent stock dividend declared July 20, 1993.)
 Meeting for the first time in Portland, the board of directors declared an increased cash dividend on the common stock of 15 cents per share, a 7-percent increase from 14 cents. The increase is the 12th consecutive one in the quarterly cash dividend. Dividends on common stock are payable Nov. 15, 1993, to shareholders of record on Oct. 29, 1993.
 The board also declared dividends of 57 cents per share on the series C preferred stock (NASDAQ: WAMUO), $1.50 per share on the series D preferred stock (NASDAQ: WAMUN) and 26.92 cents per share on the series E preferred stock (NASDAQ: WAMUM). These three dividends are payable Nov. 15, 1993, to shareholders of record on Oct. 29, 1993.
 "Washington Mutual's strong performance in the third quarter reflected the successful merger of Pacific First into Washington Mutual and our strategic focus on consumer banking. We set records for third quarter earnings and net interest income, our loan production remained very strong and a successful preferred stock offering raised $48.4 million in new capital," said Kerry Killinger, Washington Mutual's chairman, president and chief executive officer.
 Killinger said that the board held its monthly meeting in Portland for the first time "to show the importance of the Oregon market to the future of Washington Mutual and our commitment to serve the financial needs of consumers in the region."
 The continued favorable interest rate environment, the bank's larger asset base and ongoing focus on consumer banking, together with the bank's strong capital position, contributed to net interest income of $140.9 million for the period, up 63 percent from $86.4 million a year earlier. The net interest margin increased to 4.11 percent for third quarter 1993, up from 4.09 percent for third quarter 1992.
 Loan originations remained robust during the quarter due to the low interest rate environment, the high level of refinanced home loans and the larger distribution system. Total lending for the quarter was $1.5 billion versus $916.5 million for third quarter 1992. Residential loan originations were $974.6 million, up from $548.3 million a year earlier. Originations of residential construction loans were $221.3 million, up from $185.3 million in the third quarter of 1992. And consumer loan originations were $254.6 million, up from $162.8 million a year ago.
 "We had a record $1.6 billion in applications for home loans in the third quarter, so loan closings in the fourth quarter should be strong. And the growth of the consumer lending portfolio should also continue, as we introduce our consumer lending products to the former Pacific First customers," said Killinger.
 Largely as a result of the interest rate environment and planned reductions in wholesale deposits, total deposits decreased to $9.3 billion at Sept. 30, 1993, from $9.6 billion at June 30, 1993. The number of checking accounts continued to grow, with a net of 9,807 new checking accounts in the third quarter, up from 6,375 in the preceding period. Funds under management also grew during the same period: WM Life annuities increased $39.6 million to $685 million and the assets of the Composite Group of mutual funds rose $64.5 million to $1.2 billion.
 The nonbanking subsidiaries had pretax operating income (before amortization of intangible assets and intercompany eliminations) of $4.2 million for third quarter 1993, up from $4 million a year earlier.
 Consolidating duplicative branches and support areas helped to improve the bank's operating efficiency ratio (other expense as a percentage of net interest income and other income) to 53.9 percent for third quarter 1993 from 56.1 percent for second quarter 1993 and 54.6 percent for third quarter 1992.
 Total nonperforming assets were $148.3 million at Sept. 30, 1993, versus $138.7 million at June 30, 1993, and $142.1 million at year-end 1992. Total nonperforming assets as a percentage of total assets were 0.98 percent at Sept. 30, 1993, versus 0.96 percent three months earlier and 1.43 percent at Dec. 31, 1992.
 The provision for loan losses of $7.5 million was identical to that for second quarter 1993. Loan loss reserves increased to $121.1 million at Sept. 30, 1993, from $115 million at June 30, 1993. At the end of the third quarter, reserves as a percentage of nonperforming loans stood at 114 percent.
 "The Puget Sound economy appears to be stable, while other regions in the Northwest, such as Eastern and Central Washington and the Portland metropolitan area, continue to show moderate rates of growth. While there continues to be some pressure on the California real estate market, we are pleased with the overall performance of our loan portfolio," said Killinger.
 The bank redeemed on Sept. 15, 1993, the 10 1/2 percent subordinated capital notes due March 15, 1999. The aggregate principal amount of the notes outstanding was $40 million.
 On Sept. 16, 1993, Washington Mutual announced the public offering of 2 million shares of its 7.60 percent Noncumulative Perpetual Preferred Stock, Series E at $25 for net proceeds of $48.4 million. At the end of third quarter 1993, the bank's capital ratios continued to exceed the FDIC's requirements for classification as a "well- capitalized" institution.
 During the quarter just ended, the bank completed the conversion of data processing systems at Pacific First Bank to Washington Mutual systems and changed the signs at 37 former Pacific First branches in Washington and 61 in Oregon to Washington Mutual signs. Pacific First Bank was merged into Washington Mutual, a Federal Savings Bank on April 9, 1993.
 "The strong third-quarter performance shows the strength of the bank and the solidity of our consumer banking strategy. We will continue striving to operate more efficiently, to improve market share, to build new locations in the Northwest and to explore further acquisition opportunities," said Killinger.
 "Washington Mutual's strong capital position, solid earnings stream and favorable position in the Northwest market have placed us in an excellent position for this continuing period of industry change."
 Serving the financial needs of Northwest consumers since 1889, Washington Mutual is the largest independent bank headquartered in Washington and the largest consumer bank in the Northwest. At Sept. 30, 1993, Washington Mutual had assets of $15.1 billion and operated 223 financial centers and 26 home loan centers in Washington and Oregon.
 WASHINGTON MUTUAL SAVINGS BANK AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME
 (in thousands, except for per share amounts)
 (unaudited)
 Quarter Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 INTEREST INCOME
 Loans $208,022 $147,473 $573,352 $428,448
 Mortgage-backed
 securities 46,548 39,929 131,686 116,551
 Investment
 securities 17,696 7,694 48,579 21,569
 Cash equivalents 724 599 1,635 2,745
 Total interest
 income 272,990 195,695 755,252 569,313
 INTEREST EXPENSE
 Deposits 91,153 76,960 251,762 237,436
 Borrowings 40,921 32,385 120,549 96,153
 Total interest
 expense 132,074 109,345 372,311 333,589
 Net interest
 income 140,916 86,350 382,941 235,724
 Provision for loan
 losses 7,500 3,650 27,500 9,300
 Net interest
 income after
 provision for
 loan losses 133,416 82,700 355,441 226,424
 OTHER INCOME
 Service fees 18,115 12,746 49,675 37,188
 Loan servicing fees 3,708 2,641 10,033 7,986
 Other operating
 income 5,717 2,600 13,988 7,518
 Gain on sale of loans 2,296 444 16,796 8,485
 Gain on sale of other
 assets, net 1,778 1,211 16,655 5,467
 Total other income 31,614 19,642 107,147 66,644
 OTHER EXPENSE
 Salaries and employee
 benefits 44,611 27,413 117,625 77,198
 Occupancy and
 equipment 13,322 8,536 39,576 24,383
 Deposit insurance 5,870 3,365 14,891 9,988
 Other operating
 expense 22,641 15,547 69,661 44,488
 Amortization of
 goodwill and other
 intangible assets 6,952 2,715 17,533 7,688
 Real estate owned
 operations,
 inclusive of
 write-downs (414) 321 6,857 1,578
 Write-down of other
 assets - - 2,488 120
 Total other expense 92,982 57,897 268,631 165,443
 Income before
 income taxes,
 extraordinary
 items and
 cumulative effect
 of change in tax
 accounting method 72,048 44,445 193,957 127,625
 Income taxes 25,162 14,998 67,226 43,834
 Income before
 extraordinary
 items and
 cumulative
 effect of change
 in tax
 accounting
 method 46,886 29,447 126,731 83,791
 Extraordinary items,
 net of income tax
 effect - (23) (8,953) (4,638)
 Cumulative effect of
 change in tax
 accounting method - - 13,365 -
 NET INCOME $46,886 $29,424 $131,143 $79,153
 NET INCOME AVAILABLE
 TO PRIMARY COMMON
 STOCK $43,190 $28,206 $121,819 $75,497
 Return on average
 assets (percents) 1.27 1.28 1.33 1.22
 Return on average
 equity 17.27 15.81 17.02 14.84


Per share amounts
 - primary
 Income before
 extraordinary items
 and cumulative
 effect of change in
 tax accounting
 method $0.72 $0.53 $2.00 $1.54
 Extraordinary items,
 net of federal income
 tax effect - - (0.15) (0.09)
 Cumulative effect of
 change in tax
 accounting method - - 0.23 -
 Net income $0.72 $0.53 $2.08 $1.45
 Per share amounts
 - fully diluted
 Income before
 extraordinary
 items and
 cumulative effect
 of change in tax
 accounting method $0.70 $0.50 $1.89 $1.46
 Extraordinary items,
 net of federal
 income tax effect - - (0.14) (0.08)
 Cumulative effect of
 change in tax
 accounting method - - 0.21 -
 Net income $0.70 $0.50 $1.96 $1.38
 WASHINGTON MUTUAL SAVINGS BANK AND SUBSIDIARIES
 SELECTED FINANCIAL INFORMATION
 (dollars in thousands)
 (unaudited)
 Quarter Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 DATA USED TO COMPUTE
 PER SHARE AMOUNTS
 Net income $46,886 $29,424 $131,143 $79,153
 Preferred stock
 dividends:
 Noncumulative
 Perpetual,
 Series C (1,596) - (4,032) -
 Noncumulative
 Convertible
 Perpetual,
 Series A - (1,218) - (3,656)
 Noncumulative
 Convertible
 Perpetual,
 Series D (2,100) - (5,292) -
 Net income available
 to primary common
 stock $43,190 $28,206 $121,819 $75,497
 Net income $46,886 $29,424 $131,143 $79,153
 Preferred stock
 dividends:
 Noncumulative
 Perpetual,
 Series C (1,596) - (4,032) -
 Net income available
 to fully diluted
 common stock $45,290 $29,424 $127,111 $79,153
 Average common shares
 outstanding:
 Primary 59,614,625 53,258,387 58,620,706 52,144,759
 Noncumulative
 Convertible
 Perpetual
 Preferred
 Stock,
 Series A - 5,176,958 859,849 5,176,958
 Noncumulative
 Convertible
 Perpetual
 Preferred Stock,
 Series D 5,419,365 - 5,419,365 -
 Fully diluted 65,033,990 58,435,345 64,899,920 57,321,717
 WASHINGTON MUTUAL SAVINGS BANK AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 (dollars in thousands, except for per share amounts)
 (unaudited)
 Sept. 30, Dec. 31,
 1993 1992
 ASSETS
 Cash and cash equivalents $239,589 $190,602
 Trading account securities 3,126 1,926
 Investment securities 897,249 401,975
 Mortgage-backed securities 2,923,351 2,183,575
 Loans 10,339,936 6,719,680
 Real estate owned 42,021 87,427
 Bank premises and equipment 140,467 78,306
 Goodwill and other intangible
 assets 222,014 61,448
 Other assets 267,730 186,663
 Total assets $15,075,483 $9,911,602
 LIABILITIES
 Deposits:
 Checking accounts $1,161,592 $642,662
 Savings and money market
 accounts 3,011,016 1,764,569
 Time certificates 5,160,035 3,650,881
 Total deposits 9,332,643 6,058,112
 Annuities 685,038 571,428
 Securities sold under agreements
 to repurchase 1,802,383 1,061,332
 Advances from the Federal Home
 Loan Bank 1,687,335 1,057,768
 Other borrowings 88,407 5,124
 Other liabilities 328,523 122,802
 Subordinated capital notes - 40,000
 Total liabilities 13,924,329 8,916,566
 STOCKHOLDERS' EQUITY
 Preferred stock, $1 par value:
 10,000,000 shares authorized -
 6,200,000 and 5,494,150 shares
 issued and outstanding 6,200 5,494
 Common stock, $1 par value:
 100,000,000 shares authorized -
 59,642,492 and 53,787,724 shares
 issued and outstanding 59,642 53,788
 Capital surplus 544,702 496,804
 Retained earnings 540,610 438,950
 Total stockholders' equity 1,151,154 995,036
 Total liabilities and
 stockholders' equity $15,075,483 $9,911,602
 Book value per common share $15.85 $14.30
 Tangible book value per common share $12.29 $13.06
 WASHINGTON MUTUAL SAVINGS BANK AND SUBSIDIARIES
 SELECTED FINANCIAL INFORMATION
 (dollars in millions)
 (unaudited)
 Quarter Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 LOAN VOLUME
 Loan originations
 by property type:
 Residential real
 estate $974.6 $548.3 $2,583.1 $1,887.6
 Residential
 construction 221.3 185.3 593.6 466.6
 Consumer 254.6 162.8 637.8 436.8
 Apartment buildings 17.4 12.5 38.7 25.1
 Other commercial real
 estate 34.4 7.6 78.1 31.8
 Total loan
 originations 1,502.3 916.5 3,931.3 2,847.9
 Loan purchases - - 3,696.2 614.4
 Total loan volume $1,502.3 $916.5 $7,627.5 $3,462.3
 NONBANKING SUBSIDIARY PRETAX
 OPERATING INCOME
 Operating income $26.9 $24.7 $80.7 $70.7
 Operating expense 22.7 20.7 67.3 60.7
 Net income before
 taxes, amortization
 of goodwill and
 other intangible
 assets, and
 elimination of
 intercompany
 transactions $4.2 $4.0 $13.4 $10.0
 NET INTEREST SPREAD
 Yield on loan
 portfolio (percents) 8.16 9.71 8.40 9.98
 Yield on investments
 (percents) 7.18 7.80 7.32 8.09
 Combined yield on
 earning assets
 (percents) 7.90 9.17 8.11 9.44
 Cost of deposits
 (percents) 3.77 5.04 3.97 5.43
 Cost of borrowings
 (percents) 4.18 5.92 4.49 6.61
 Combined cost of
 funds (percents) 3.89 5.27 4.12 5.72
 Net interest spread
 (percents) 4.01 3.90 3.99 3.72
 Net interest margin
 (percents) 4.11 4.09 4.12 3.91
 Sept. 30, June 30, Dec. 31, Sept. 30,
 1993 1993 1992 1992
 INTEREST SENSITIVITY
 One-year interest
 sensitivity using
 principal balances
 Gap as a percentage
 of total assets
 (percents) -8.2 -12.2 -15.7 -11.1
 One-year interest
 sensitivity using
 cash flow basis
 Gap as a percentage
 of total assets
 (percents) -5.1 -8.0 -10.9 -6.7
 Note: The Sept. 30, 1992 interest sensitivity calculations have not been restated for the acquisition of Pioneer Savings Bank using the pooling-of-interests method of accounting.
 CAPITAL ADEQUACY
 Stockholders' equity
 ratio (percents) 7.64 7.40 10.03 8.10
 FDIC regulatory capital
 ratios:
 Leverage capital
 (percents) 6.22 5.86 9.35 7.51
 Risk-based core
 capital (percents) 9.89 9.25 15.41 11.77
 Risk-based total
 capital (percents) 10.98 10.95 16.99 13.54
 WASHINGTON MUTUAL SAVINGS BANK AND SUBSIDIARIES
 SELECTED FINANCIAL INFORMATION
 (dollars in millions)
 (unaudited)
 Sept. 30, June 30, Dec. 31, Sept. 30,
 1993 1993 1992 1992
 RESERVE FOR LOAN LOSSES
 Balance at beginning
 of quarter $115.0 $64.6 $62.8 $60.0
 Provision for loan
 losses 7.5 7.5 4.7 3.7
 Reserves charged off,
 net of recoveries (1.4) (3.1) (13.5) (0.9)
 Reserve added through
 acquisitions - 46.0 - -
 Balance at end of quarter 121.1 $115.0 $54.0 $62.8
 Allocated reserves:
 Residential
 construction $1.5 $1.7 $1.2 $1.0
 Apartment buildings
 and other commercial
 real estate 36.7 31.4 21.8 25.1
 Commercial 2.5 2.5 5.6 5.6
 40.7 35.6 28.6 31.7
 Unallocated reserves 80.4 79.4 25.4 31.1
 Total reserve for loan
 losses $121.1 $115.0 $54.0 $62.8
 Reserve for loan losses
 as a percentage of:
 Total loans
 (percents) 1.17 1.14 0.80 0.99
 Total loans, excluding
 performing residential
 loans (percents) 2.80 2.64 2.24 2.66
 Nonperforming assets
 (percents) 81.67 82.93 37.99 43.65
 Nonperforming assets,
 less real estate
 owned (percents) 113.95 133.67 98.77 98.98
 LOANS BY COLLATERAL TYPE
 Residential real
 estate $6,044.9 $5,744.3 $4,332.2 $3,980.7
 Residential
 construction 386.8 414.8 350.8 325.2
 Apartment buildings 917.0 960.4 435.9 424.1
 Other commercial real
 estate 1,038.4 1,003.9 552.8 590.4
 Consumer 2,064.1 2,045.2 1,088.0 1,048.0
 Commercial 9.8 8.3 14.0 14.3
 Loan loss reserves (121.1) (115.0) (54.0) (62.8)
 Total loans $10,339.9 $10,061.9 $6,719.7 $6,319.9
 NONPERFORMING ASSETS
 Nonperforming loans:
 Loans under
 foreclosure or on
 nonaccrual basis $95.0 $74.8 $45.0 $53.8
 Restructured loans 11.3 11.3 9.6 9.6
 Total nonperforming
 loans 106.3 86.1 54.6 63.4
 Real estate owned:
 Real estate owned
 (including in-substance
 foreclosures) 74.0 93.3 132.3 122.3
 Write-downs or charge
 offs recorded on real
 estate owned (23.9) (33.6) (33.6) (29.2)
 Reserve for losses (8.1) (7.1) (11.2) (12.7)
 Total real estate
 owned 42.0 52.6 87.5 80.4
 Total nonperforming
 assets $148.3 $138.7 $142.1 $143.8
 Nonperforming assets by
 collateral type:
 Residential real
 estate $43.2 $43.2 $21.4 $21.4
 Residential
 construction 10.1 10.2 9.5 12.1
 Apartment buildings 11.4 21.1 39.6 42.7
 Other commercial real
 estate 73.3 54.7 68.4 67.9
 Consumer 12.1 10.2 5.9 6.2
 Commercial 6.3 6.4 8.5 6.2
 Reserve for REO losses (8.1) (7.1) (11.2) (12.7)
 Total nonperforming
 assets $148.3 $138.7 $142.1 $143.8
 As a percentage of
 total loans (percents) 1.43 1.38 2.11 2.28
 As a percentage of total
 assets (percents) 0.98 0.96 1.43 1.54
 Year-to-date cash flow
 yield on restructured
 loans (percents) 9.95 9.90 10.35 10.42
 -0- 10/19/93
 /CONTACT: Scott F. Selby of Washington Mutual Savings Bank, 800-228-9268/
 (WAMU)


CO: Washington Mutual Savings Bank ST: Washington IN: FIN SU: ERN DIV

SW-RB -- SE016 -- 4268 10/19/93 19:01 EDT
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