UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
May 15, 1998
(Date of report)
HomeSide Lending, Inc.
(Exact name of registrant as specified in its charter)
Florida 1-12979 59-2725415
(State or other jurisdiction (Commission file number) (I.R.S. Employer
of incorporation) Identification No.)
7301 Baymeadows Way, Jacksonville, FL 32256
(Address of principal executive offices) (Zip Code)
(904) 281-3000
(Registrant's telephone number, including area code)
<PAGE>
Item 7. Unaudited Consolidated Pro Forma Financial Information
The unaudited pro forma consolidated financial information set forth below,
which is based upon management's assumptions and includes adjustments as
described in the notes which follow, should be read in conjunction with the
historical financial statements and notes of the Registrant. On February 10,
1998, National Australia Bank, LTD (the "National") acquired HomeSide
International, Inc. and its indirect wholly owned subsidiary, HomeSide Lending,
Inc. The Unaudited Pro Forma Balance Sheet set forth below gives effect to the
merger with the National (the "Merger"), the acquisition of certain assets from
Mortgage Corporation (the "Banc One acquisition") and the issuance of $200
million in medium-term notes to finance the Banc One acquisition as though such
transactions occurred as of February 10, 1998, while the Unaudited Pro Forma
Consolidated Income Statements set forth below gives effect to the these
transactions as though the transaction occurred at the beginning of the period
presented. The unaudited pro forma consolidated financial information does not
purport to represent the results that actually would have occurred if the
transactions had in fact occurred on such date or to project the results that
may be achieved in the future.
<PAGE>
<TABLE>
HomeSide Lending, Inc.
Unaudited Pro Forma
Consolidated Balance Sheet
February 10, 1998
(dollars in millions)
<CAPTION>
Banc One
NAB Merger Aquisition
HomeSide Pro Forma Pro Forma HomeSide
Historical (a) Adjustments (b) Adjustments (b) Pro Forma
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash and cash equivalents $32.1 $5.6 (c) $ - $37.7
Mortgage loans held for sale, net 1,292.4 - - 1,292.4
Mortgage servicing rights, net 1,766.4 - 191.7 (k) 1,958.1
Accounts receivable, net 227.3 - 15.6 (k) 242.9
Early pool buyout advances 374.1 - - 374.1
Premises and equipment, net 42.0 (13.3) (d) - 28.7
Goodwill 9.0 685.0 (e) 11.2 (l) 705.2
Other assets 116.0 (13.1) (f) - 102.9
------------------- ------------------ -------------------- ------------
Total Assets $3,859.3 $664.2 $218.5 $4,742.0
=================== ================== ==================== =============
Notes payable $2,075.0 - $ - $2,075.0
Accounts payable and accrued liabilities 135.8 43.7 (g) 18.5 (m) 198.0
Deferred income taxes 197.2 (27.0) (h) - 170.2
Long-term debt 770.5 6.0 (i) 200.0 (n) 976.5
------------------- ------------------ -------------------- -------------
Total Liabilities 3,178.5 22.7 218.5 3,419.7
Common Stock:
Common stock, $1.00 par value,
10,000 shares authorized and 100
shares issued and outstanding, all
pledged as second priority
collateral on the long-term debt of
the Parent
Additional paid-in capital 573.1 749.2 (j) - 1,322.3
Retained earnings 107.7 (107.7) (j) - -
------------------- ------------------ -------------------- -------------
Total Stockholder's Equity 680.8 641.5 - 1,322.3
------------------- ------------------ -------------------- --------------
Total Liabilities and Stockholder's Equity $3,859.3 $ 664.2 $218.5 $4,742.0
=================== ================== ==================== ==============
</TABLE>
(consolidated footnotes on following page)
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HOMESIDE LENDING, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(a) Reflects HomeSide Lending, Inc.'s audited consolidated balance sheet at
February 10, 1998.
(b) Reflects pro forma adjustments related to the Merger and the Banc One
acquisition as if these transactions occurred on February 10, 1998. The
adjustments apply the purchase accounting adjustments required to reflect the
effects of the Merger and Banc One acquisition. The values of assets and
liabilities have been adjusted to reflect the allocation of the purchase prices.
The purchase prices in excess of the fair value of net assets acquired has been
recorded as goodwill.
(c) Reflects net cash received for outstanding stock options and compensation
expenses related to the closing of the Merger.
(d) Reflects the mark to market of premises and equipment as part of the
allocation of the Merger purchase price to assets and liabilities.
(e) Goodwill of $9.0 million from previous transactions has been eliminated.
Goodwill of $685.0 million has been recorded by HomeSide Lending in
respect of the Merger.
(f) Reflects the elimination of unamortized debt issue costs of $13.1 million
as a result of the Merger.
(g) Reflects accrued transaction costs related to the Merger and the mark to
market of certain liabilities as part of the allocation of the purchase
price to assets and liabilities.
(h) Reflects the net tax effect of the changes in bases of assets and
liabilities as a result of the application of purchase accounting for
the Merger.
(i) Reflects the allocation of the purchase price of the Merger to long
term debt.
(j) Reflects the purchase price relating to HomeSide Lending and consequent
impact of the Merger on consolidated stockholder's equity.
(k) Reflects the fair value of mortgage servicing rights and account
receivable purchased from Banc One.
(l) Goodwill of $11.2 million has been recorded in respect of the
Banc One acquisition.
(m) Reflects accrued transaction costs and lease payable related to the
Banc One acquisition.
(n) Reflects the proposed issuance of medium-term notes to fund the Banc One
acquisition.
<PAGE>
<TABLE>
HomeSide Lending, Inc.
Unaudited Pro Forma
Consolidated Income Statement
For the Period from March 1, 1997 to February 10, 1998
(dollars in millions)
<CAPTION>
Banc One
NAB Merger Acquisition
HomeSide Pro Forma Pro Forma HomeSide
Historical Adjustments (b) Adjustments (b) Pro Forma
(a)
-------------------- ------------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Revenues:
Mortgage servicing fees $ 393.3 $ - $ 53.4 (f) $ 446.7
Amortization of mortgage servicing rights (207.5) - (38.8) (f) (246.3)
Net servicing revenue ---------------- ----------------- ------------------ ---------------
185.8 - 14.6 200.4
Interest income 97.1 - 11.1 (g) 108.2
Interest expense (81.8) - (9.9) (h) (91.7)
-------------------- ------------------------------------------ ----------------
Net interest revenue 15.3 - 1.2 16.5
Net mortgage origination revenue 85.2 - 4.9 (i) 90.1
Other income 1.6 - - 1.6
-------------------- ------------------------------------------ ----------------
Total Revenues 287.9 - 20.7 308.6
Expenses:
Salaries and employee benefits 75.4 - 7.0 (j) 82.4
Occupancy and equipment 15.4 (0.4) (c) - 15.0
Servicing losses on investor-owned loans
and foreclosure-related expenses 22.0 - - 22.0
Other expenses 38.2 34.5 (d) 2.8 (k) 75.5
-------------------- ------------------------------------------ ----------------
Total Expenses 151.0 34.1 9.8 194.9
Income before income taxes 136.9 (34.1) 10.9 113.7
Income tax expense (benefit) 53.4 (.2) (e) 4.3 (l) 57.5
-------------------- ------------------------------------------ ----------------
Net Income $ 83.5 $(33.9) $ 6.6 $ 56.2
==================== =================== =================== ================
</TABLE>
(consolidated footnotes on following pages)
<PAGE>
HOMESIDE LENDING, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED INCOME STATEMENT
(a) Reflects HomeSide Lending's historical audited consolidated income
statement for the period March 1, 1997 to February 10, 1998.
(b) Reflects pro forma adjustments related to the Merger and Banc One
acquisition as if such transactions occurred at the beginning of the
period presented. The adjustments apply the purchase accounting
adjustments required to reflect the effects of the transactions. The
values of assets and liabilities have been adjusted to reflect the
allocation of the purchase prices. The purchase prices in excess of
the fair value of net assets acquired have been recorded as goodwill.
(c) The depreciation expense included in occupancy and equipment expenses
have been adjusted to reflect the adjusted fair value of premises and
equipment as of the closing date of the Merger.
(d) Other expenses have been adjusted to reflect amortization of goodwill
arising from the Merger.
(e) Adjusts the income tax expense to HomeSide Lending's expected
effective tax rate after the Merger.
(f) Reflects servicing fee income and amortization of servicing rights
acquired in the Banc One acquisition.
(g) Reflects interest earned on loans held for sale as a result of the
Banc One acquisition.
(h) Reflects interest expense from the borrowing to fund the net assets
purchased from Banc One through the issuance of medium-term notes,
offset by a reduction in interest expense from credits received from
lending institutions.
(i) Reflects origination revenue generated by the loan production of
Banc One through the Preferred Seller arrangement.
(j) Reflects increases of $6.3 million and $0.7 million, respectively, in
loan servicing and loan production salaries expense as a result of the
Banc One acquisition.
(k) Reflects other operating expenses related to the Banc One acquisition
of $2.3 million and $0.5 million in amortization of goodwill arising
from the Banc One acquisition.
(l) Adjusts income tax expense for the effective tax rate after the
Banc One acquisition.
<PAGE>
Signatures
Pursuant to the requirements of the securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HomeSide Lending, Inc.
(Registrant)
Date: May 15, 1998 By:_/s/Robert J. Jacobs_______________
--------------------
Robert J. Jacobs
Director, Secretary and General Counsel
