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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 Exchange Act of 1934
December 24, 1998
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Date of Report (Date of Earliest Event Reported)
WESTERN BANCORP
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(Exact Name of Registrant As Specified In Its Charter)
CALIFORNIA
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(State or Other Jurisdiction of Incorporation)
0-13551 95-3863296
(Commission File Number) (IRS Employer Identification No.)
4100 NEWPORT PLACE, SUITE 900
NEWPORT BEACH, CALIFORNIA 92660
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(Address of Principal Executive Offices)(Zip Code)
(949) 863-2444
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(Registrant's Telephone Number, including Area Code)
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Item 5. Other Events.
On December 24, 1998, Western Bancorp ("Western") issued a press release
discussing the impact of the recent interest rate decreases by the Federal
Reserve on Western's earnings, a copy of which is attached hereto as Exhibit
99.1 and is incorporated herein by this reference in its entirety.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
The following exhibit is filed with this Current Report on Form 8-K:
Exhibit
Number Description
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99.1 Press Release of Western dated December 24, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: December 24, 1998
WESTERN BANCORP
By: /s/ Arnold C. Hahn
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Name: Arnold C. Hahn
Title: Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Description
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99.1 Press Release of Western Bancorp dated December 24, 1998
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EXHIBIT 99.1
[LOGO]
WESTERN BANCORP
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PRESS RELEASE
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Western Bancorp (NASDAQ: WEBC)
4100 Newport Place, Suite 900
Newport Beach, California 92660
Contacts: Matthew P. Wagner Arnold C. Hahn
President and Chief Financial Officer
Chief Executive Officer
Phone: 310/477-2402 X 134 949/863-2351
FAX: 310/231-0321 949/757-5844
FOR IMMEDIATE RELEASE . . . WESTERN BANCORP DISCUSSES IMPACT OF FEDERAL RESERVE
RATE DECREASES ON EARNINGS
December 24, 1998
Newport Beach, California . . . Western Bancorp ("Western") announced today
that as a result of the recent interest rate decreases by the Federal
Reserve, Western is experiencing a squeeze on its net interest margin.
Western enjoys a very low cost deposit base with approximately one third of
its deposits in non interest-bearing demand deposits. As a result, however,
when interest rates decline on the asset side, there is limited ability to
similarly reduce the cost of funds. Therefore, Western has suffered a
reduction in net interest margin. Although Western's net interest margin for
the third quarter was 6.20%, this reduction in interest rates will impact
Western's net interest margin in the fourth quarter of 1998 by as much as 20
basis points. In addition, it is expected this reduction in interest rates
will continue to impact Western's net interest margin throughout 1999. While
loan growth has improved in the second half of the year, Western's
unwillingness to compromise its credit standards resulted in slow growth in
the beginning of the year. This has also had a negative impact on Western's
net interest margin. Although some of this loss of margin will be mitigated
by gains on securities sales as Western restructures its investment portfolio
and modestly lengthens the duration of the asset side of the balance sheet,
Western expects fourth quarter earnings to be approximately 5% below average
analysts' estimates of $0.45 before merger and legal settlement costs.
Matthew P. Wagner, President and Chief Executive Officer, stated that "Even
though this squeeze on our net interest margin is a challenge, Western
continues to perform very well and the recent increase in our dividend from
$0.15 to $0.225 reflects our optimism."
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Western serves its clients in Southern California through its two banking
subsidiaries: Southern California Bank and Santa Monica Bank. Southern
California Bank serves southern Los Angeles, Orange and San Diego Counties
with fifteen branches and with its specialized escrow services and asset
based lending. Santa Monica Bank serves its clients in Santa Monica, Malibu,
Marina del Rey, Beverly Hills, Century City, Westwood, West Hollywood, Culver
City, Glendale and Encino with sixteen branches and its specialized trust and
investment management services.
Forward-Looking Statements
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This press release includes forward-looking statements that involve inherent
risks and uncertainties. Western Bancorp cautions readers that a number of
important factors could cause actual results to differ materially from those
in the forward-looking statements. These factors include economic conditions
and competition in the geographic and business areas in which Western Bancorp
and its subsidiaries operate, inflation or deflation, fluctuations in
interest rates, legislation and governmental regulation and the progress of
integrating Santa Monica Bank, Western Bank, Southern California Bank and the
Bank of Los Angeles, and assuming consummation of the merger of PNB Financial
Group with and into Western, the process of integrating Pacific National Bank.
