<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 15, 1997
----------------
H. F. Ahmanson & Company
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(Exact name of registrant as specified in charter)
Delaware 1-8930 95-0479700
--------------- ------------ -------------------
(State or other (Commission (IRS employer
jurisdiction of file number) identification no.)
incorporation)
4900 Rivergrade Road, Irwindale, California 91706
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (818) 960-6311
---------------
Not applicable
----------------------
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On January 15, 1997, H. F. Ahmanson & Company (the "Company"),
issued a press release reporting its results of operations
during the quarter and year ended December 31, 1996.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 Press release dated January 15, 1997 reporting results
of operations during the quarter and year ended
December 31, 1996.
<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 hereunto duly authorized.
Date: January 15, 1997
H. F. AHMANSON & COMPANY
/s/George Miranda
----------------------------
George Miranda
First Vice President and
Principal Accounting Officer
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H. F. AHMANSON & COMPANY HOME SAVINGS OF AMERICA NEWS
SAVINGS OF AMERICA
4900 Rivergrade Road
Irwindale, CA 91706
(818) 814-7922
FOR IMMEDIATE RELEASE Contacts:
Media: Mary Trigg
818-814-7922
Investor: Steve Swartz
818-814-7986
AHMANSON REPORTS FOURTH QUARTER NET INCOME OF $0.74 PER SHARE
- - Nonperforming Assets Decline $51 Million To Lowest Level Since December 31,
1994 -
Irwindale, CA, January 15, 1997 -- H.F. Ahmanson & Company, (AHM:NYSE),
parent company of Home Savings of America, today reported fourth quarter
earnings per fully diluted common share of $0.74, up 85% from the $0.40 earned
in the same 1995 period. Net income in the fourth quarter of 1996 was $91.2
million, a 50% increase compared to $60.7 million in the fourth quarter of
1995. The 1996 fourth quarter results include a gain on the sale of the
company's San Antonio branches and other branch consolidation activities as
well as a refund of FDIC insurance assessments.
Net income for 1996 was $145.3 million or $0.91 per fully diluted common
share, compared to $216.2 million, or $1.40 per fully diluted common share in
1995. The 1996 results include an aftertax charge of $144.4 million related
to a special assessment to recapitalize the Savings Association Insurance Fund
(SAIF). The 1995 results included an aftertax charge of $234.7 million
related to an accounting change which eliminated certain goodwill, and an
aftertax gain of $252.7 million in connection with the sale of the company's
retail branch system in New York.
Charles R. Rinehart, chairman and chief executive officer of Ahmanson and
Home Savings, said, "We are delighted with the performance of the Home Savings
and Ahmanson team in 1996. The company had a very productive year, completing
the acquisition of 61 former First Interstate branches, building
infrastructure and income, and expanding our product lines as we progressed in
becoming a full-service consumer and small business bank. We also believe
progress in capital management, credit, expense management, and other
initiatives were significant contributors to our performance. Return on
average equity reached 14.7% for the fourth quarter."
<PAGE>
RESULTS OF OPERATIONS
NET INTEREST INCOME
Net interest income totaled $317.7 million for the fourth quarter of
1996, compared to $306.9 million in the fourth quarter of 1995. Net interest
income for 1996 totaled $1.25 billion compared to $1.23 billion in 1995.
For the fourth quarter and the year 1996, the average net interest
margins were 2.65% and 2.63%, respectively, compared to 2.52% and 2.39% for
the 1995 periods. The increase in the net interest margins is due in part to
the acquisition of 61 former First Interstate Bank (FIB) branches in September
1996. At December 31, 1996, the net interest margin was 2.66%, compared to
2.70% at December 31, 1995.
OTHER INCOME
In the fourth quarter of 1996, other income was $78.0 million, compared
to $48.2 million in the fourth quarter of 1995. Other income totaled $251.8
million in 1996, up 37% from $183.7 million (excluding the gain from the sale
of the New York branch system) in 1995. Other fee income, at $44.2 million,
continued to increase and was $17.5 million or 66% higher than the $26.7
million reported for the 1995 fourth quarter.
"The increase in other fee income reflects our emphasis on building fee-
based services throughout the company, particularly in the Personal Financial
Services Division (PFSD) and Griffin Financial Services unit," Rinehart said.
"In 1996, PFSD made tremendous strides in integrating a sales culture to
complement its long-established service orientation. Fee income from PFSD
grew 40% to $83.4 million in 1996 from $59.7 million in 1995, while Griffin
increased its revenue by 39% to $16.8 million in 1996 from $12.1 million in
1995."
In the fourth quarter of 1996, the company recorded a pretax gain of $6.9
million from the sale of the company's San Antonio branches and other branch
consolidation activities.
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REAL ESTATE HELD FOR INVESTMENT (REI)
During the fourth quarter of 1996 the company sold a large commercial
property located in Southern California. REI assets totaled $147.9 million,
net of the allowance, at December 31, 1996, declining 23% and 37% during the
fourth quarter and full year of 1996, respectively.
REI operations reported a loss of $1.4 million for the fourth quarter of
1996, compared to $3.6 million in the fourth quarter of 1995. For the year,
REI operations reported a loss of $35.0 million compared to $49.5 million in
1995.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses (G&A) totaled $188.2 million in the
fourth quarter of 1996, compared to $199.2 million in the fourth quarter of
1995. In the fourth quarter of 1996, the company had no deposit insurance
expense due to a refund from the FDIC of the entire $18 million premium
assessed for the quarter. In the first quarter of 1997, the FDIC assessment
will be approximately $5 million, a $13 million decrease from the quarterly
assessment rate prior to the SAIF recapitalization. G&A would have been
$775.3 million in 1996, excluding the SAIF recapitalization of $243.9 million,
compared to $818.6 million in 1995.
The company's efficiency ratio was 49.5% in the fourth quarter of 1996
compared to 57.0% in the same 1995 period.
CREDIT COSTS/ASSET QUALITY
During the fourth quarter of 1996, the company provided $29.3 million for
loan losses, compared to $37.9 million in the fourth quarter of 1995. The
1996 fourth quarter provision reflects both lower net charge-offs and
nonperforming asset levels compared with the year ago quarter. For the full
year 1996, the company provided $144.9 million for loan losses compared to
$119.1 million in 1995.
Expenses for the operations of foreclosed real estate amounted to $27.7
million in the fourth quarter of 1996, compared to $25.1 million in the fourth
quarter of 1995. During 1996, these expenses amounted to $105.9 million,
compared to $86.8 million in 1995.
<PAGE>
During the fourth quarter of 1996, nonperforming assets (NPAs) decreased
by $51.4 million, reaching their lowest level in two years and totaled $846.2
million, or 1.70% of total assets at December 31, 1996, compared to $949.4
million, or 1.88% of total assets at December 31, 1995. NPAs decreased $103.2
million, or 11% from year-end 1995 totals and declined $178.9 million, or 18%
from their recent peak in February of 1996. Troubled debt restructurings
totaled $185.6 million at December 31, 1996. NPAs declined throughout most of
1996, reflecting the company's aggressive efforts in dealing with problem
assets and a more broadly-based strengthening in the California economy.
Net loan charge-offs for the fourth quarter of 1996 totaled $38.5
million, compared to $42.3 million in the fourth quarter of 1995. In 1996,
net charge-offs totaled $151.4 million compared to $138.5 million in 1995.
Included in net loan charge-offs were recoveries of $8.8 million in the
fourth quarter of 1996, compared to $5.7 million in the fourth quarter of
1995. Recoveries for 1996 totaled $39.2 million compared to $24.2 million in
1995.
LOAN ORIGINATIONS
Home Savings funded $1.2 billion of residential mortgages in the fourth
quarter of 1996, compared to $1.6 billion in the fourth quarter of 1995. In
1996 the company originated $5.2 billion in residential mortgages compared to
$6.4 billion in 1995.
Consumer loan production totaled $131.0 million during the quarter
compared to $18.6 million in the fourth quarter of 1995. In December 1996 the
company originated $51.8 million in consumer loans, achieving its goal of
finishing 1996 at a run rate that would generate over $500 million in new
consumer loans annually. The consumer loan portfolio totaled $698.6 million
at year-end 1996, including those loans acquired with the FIB branches.
At year-end 1996, business loans totaled $49.7 million, reflecting the
company's program to provide lending and cash management services to small
businesses.
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DEPOSITS
Deposit balances at December 31, 1996 totaled $34.8 billion compared with
$34.2 billion at December 31, 1995. Checking and savings deposit balances
increased $1.5 billion or 16% during 1996, while term deposits decreased $1.0
billion or 4% during the same period. Transaction accounts comprised 32% of
the deposit base at December 31, 1996 compared to 28% at December 31, 1995.
The change in deposit mix is primarily due to the acquisition of the former
FIB branches that resulted in the replacement of higher-cost term deposits
with a greater percentage of lower-cost checking and savings deposits.
CAPITAL
At December 31, 1996, Home Savings of America's capital ratios exceeded
the regulatory levels for the bank to be rated "well-capitalized," a
designation meaning that the bank meets the highest regulatory capital
standard.
STOCK PURCHASE PROGRAMS
In the fourth quarter of 1996, the company completed its second stock
purchase program and began its third program, which was approved by the Board
on November 3, 1996. In the second program the company purchased 5.2 million
shares of its outstanding common stock at an average price per share of
$28.61. During the fourth quarter the company purchased a total of 4 million
shares, investing $126.6 million at an average price per share of $31.86. Of
the $250 million authorized for the company's third round of purchase
activity, $205 million remains. At December 31, 1996, the parent company had
$219 million in cash.
Since initiating the first stock purchase program in October 1995, the
company has purchased 17 million common shares, or 14% of the then outstanding
shares, at an average price of $26.11. In addition, in September of 1996 the
company redeemed its 9.60% Preferred Stock, Series B, and in December of 1996
issued $150 million of 8.36% Capital Securities, Series A.
********
<PAGE>
H.F. Ahmanson & Company, with $49.9 billion in assets, is the parent
company of Home Savings of America. Home Savings' deposit base is $34.8
billion. It operates 391 personal financial service centers in four states
and 125 mortgage lending offices in nine states.
********
Additional information, including monthly financial data, about H.F.
Ahmanson & Company and Home Savings of America can be retrieved by using the
following service:
Corporate News on the Net: http://www.businesswire.com/cnn/ahm.htm
For information regarding PC Banking, Home Loans, Investments, Insurance,
Business Banking and Consumer Loans, contact:
Home Savings Website: http://www.homesavings.com
<PAGE>
H. F. AHMANSON & COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
(dollars in thousands except per share data)
<TABLE>
<CAPTION>
At End of Period December 31, 1996 September 30, 1996 December 31, 1995
- ---------------- ----------------- ------------------ -----------------
<S> <C> <C> <C>
Total assets $ 49,902,044 $ 50,588,224 $ 50,529,586
Investment portfolio $ 1,184,857 $ 1,063,932 $ 892,572
Loans receivable and mortgage-backed
securities (MBS) $ 46,085,670 $ 46,717,332 $ 47,407,521
ARMs included in loans receivable and MBS $ 44,070,098 $ 44,797,610 $ 45,895,028
Allowance for loan losses $ 389,135 $ 398,290 $ 380,886
Deposits $ 34,773,945 $ 35,399,443 $ 34,244,481
Borrowings and Capital securities of
subsidiary trust $ 11,728,934 $ 11,255,882 $ 12,236,428
Stockholders' equity $ 2,433,049 $ 2,472,634 $ 3,056,922
Book value per common share $ 19.09 $ 18.86 $ 20.75
Tangible book value per common share $ 17.31 $ 17.06 $ 20.00
Total common shares outstanding 102,153,052 105,496,154 115,610,077
For the Three Months Ended
- --------------------------
Net interest income $ 317,722 $ 306,236 $ 306,892
Provision for loan losses $ 29,298 $ 35,783 $ 37,927
Net income (loss) $ 91,247 $ (79,478)* $ 60,709
Net income (loss) per fully diluted
common share $ 0.74 $ (0.85)* $ 0.40
Dividends per common share $ 0.22 $ 0.22 $ 0.22
Loans originated and purchased $ 1,415,515 $ 2,489,651** $ 1,647,308
Average Interest Rates:
Yield on loans and MBS 7.39% 7.33% 7.47%
Yield on investment portfolio 7.17% 8.25% 5.38%
Yield on interest-earning assets 7.39% 7.35% 7.43%
Cost of deposits 4.41% 4.48% 4.73%
Cost of borrowings 6.37% 6.39% 6.42%
Cost of interest-costing liabilities 4.89% 4.97% 5.17%
Interest rate spread 2.50% 2.38% 2.26%
Net interest margin 2.65% 2.59% 2.52%
For the Years Ended
- -------------------
Net interest income $ 1,252,514 $ 1,226,755
Provision for loan losses $ 144,924 $ 119,111
Income before cumulative effect of
accounting change $ 145,258 $ 450,946
Net income $ 145,258* $ 216,204
Net income per fully diluted
common share $ 0.91* $ 1.40
Dividends per common share $ 0.88 $ 0.88
Loans originated and purchased $ 6,683,886** $ 6,483,069
Average Interest Rates:
Yield on loans and MBS 7.38% 7.26%
Yield on investment portfolio 6.87% 6.09%
Yield on interest-earning assets 7.37% 7.21%
Cost of deposits 4.48% 4.59%
Cost of borrowings 6.31% 6.64%
Cost of interest-costing liabilities 4.94% 4.99%
Interest rate spread 2.43% 2.22%
Net interest margin 2.63% 2.39%
*Net income excluding the SAIF assessment and FIB aquisition charges would have been $73.2 million or $0.56
per share for the third quarter of 1996 and $298.1 million or $2.21 per share for the year 1996.
**Includes FIB loans acquired of $1.1 billion.
</TABLE>
<PAGE>
H. F. AHMANSON & COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Assets December 31, 1996 September 30, 1996 December 31, 1995
- ------ ----------------- ------------------ -----------------
<S> <C> <C> <C>
Cash and amounts due from banks $ 691,578 $ 758,312 $ 752,878
Securities purchased under
agreements to resell 737,500 623,000 381,000
Other short-term investments 14,782 14,517 13,278
----------- ----------- -----------
Total cash and cash equivalents 1,443,860 1,395,829 1,147,156
Other investment securities 11,597 11,514 12,356
Investment in stock of Federal Home
Loan Bank (FHLB) 420,978 414,901 485,938
Mortgage-backed securities (MBS) 14,296,512 14,863,228 16,152,142
Loans receivable less allowance
for losses of
$389,135 (December 31, 1996),
$398,290 (September 30, 1996) and
$380,886 (December 31, 1995) 31,789,158 31,854,104 31,255,379
Accrued interest receivable 209,839 215,238 228,111
Real estate held for development and
investment (REI) less allowance
for losses of
$132,432 (December 31, 1996),
$164,298 (September 30, 1996) and
$283,748 (December 31, 1995) 147,851 192,846 234,855
Real estate owned held for sale (REO)
less allowance for losses of
$32,137 (December 31, 1996),
$36,126 (September 30, 1996) and
$38,080 (December 31, 1995) 247,577 277,594 225,566
Premises and equipment 424,567 437,886 410,947
Goodwill and other intangible assets 308,083 321,088 147,974
Other assets 602,022 591,292 229,162
Income taxes - 12,704 -
----------- ----------- -----------
$49,902,044 $50,588,224 $50,529,586
=========== =========== ===========
Liabilities, Capital Securities of
Subsidiary Trust and Stockholders' Equity
- -------------------------------------------
Deposits $34,773,945 $35,399,443 $34,244,481
Securities sold under agreements to repurchase 1,820,000 1,705,000 3,519,311
Other short-term borrowings 210,529 50,000 -
FHLB and other borrowings 9,549,992 9,500,882 8,717,117
Other liabilities 917,198 1,460,265 873,313
Income taxes 48,918 - 118,442
----------- ----------- -----------
Total liabilities 47,320,582 48,115,590 47,472,664
Capital securities of subsidiary trust 148,413 - -
Stockholders' equity 2,433,049 2,472,634 3,056,922
----------- ----------- -----------
$49,902,044 $50,588,224 $50,529,586
=========== =========== ===========
</TABLE>
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H. F. AHMANSON & COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(dollars in thousands except per share data)
<TABLE>
<CAPTION>
For the Three Months Ended For the Years Ended
----------------------------------------- December 31,
December 31, September 30, December 31, -------------------------
1996 1996 1995 1996 1995
------------ ------------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Interest income:
Interest on loans $ 595,852 $ 567,001 $ 583,543 $ 2,296,786 $ 2,405,820
Interest on MBS 272,638 283,568 309,629 1,161,487 1,158,077
Interest and dividends on investments 16,224 17,406 13,205 56,522 135,194
----------- ----------- ----------- ----------- -----------
Total interest income 884,714 867,975 906,377 3,514,795 3,699,091
----------- ----------- ----------- ----------- -----------
Interest expense:
Deposits 386,692 377,011 407,113 1,523,873 1,835,590
Short-term borrowings 29,583 32,035 65,107 138,182 197,437
FHLB and other borrowings 150,717 152,693 127,265 600,226 439,309
----------- ----------- ----------- ----------- -----------
Total interest expense 566,992 561,739 599,485 2,262,281 2,472,336
----------- ----------- ----------- ----------- -----------
Net interest income 317,722 306,236 306,892 1,252,514 1,226,755
Provision for loan losses 29,298 35,783 37,927 144,924 119,111
----------- ----------- ----------- ----------- -----------
Net interest income after provision for loan losses 288,424 270,453 268,965 1,107,590 1,107,644
----------- ----------- ----------- ----------- -----------
Other income:
Gain on sales of MBS 3,103 - 53 3,074 11,919
Gain on sales of loans 3,845 3,307 4,375 28,346 5,364
Servicing income 18,449 18,114 15,940 68,365 60,490
Other fee income 44,243 34,386 26,730 136,739 103,626
Gain on sales of retail deposit branch systems 6,861 - - 6,861 514,671
Gain on sales of investment securities - 313 (67) 313 187
Other operating income 1,507 1,140 1,189 8,100 2,152
----------- ----------- ----------- ----------- -----------
78,008 57,260 48,220 251,798 698,409
----------- ----------- ----------- ----------- -----------
Other expenses:
SAIF recapitalization assessment - 243,862 - 243,862 -
Other general and administrative expenses 188,185 204,400 199,217 775,285 818,579
----------- ----------- ----------- ----------- -----------
General and administrative expenses (G&A) 188,185 448,262 199,217 1,019,147 818,579
Operations of REI 1,388 19,295 3,625 34,961 49,481
Operations of REO 27,664 25,225 25,123 105,880 86,788
Amortization of goodwill and other intangible assets 6,935 3,955 4,611 18,842 26,559
----------- ----------- ----------- ----------- -----------
224,172 496,737 232,576 1,178,830 981,407
----------- ----------- ----------- ----------- -----------
Income (loss) before provision for income taxes (benefit)
and cumulative effect of accounting change 142,260 (169,024) 84,609 180,558 824,646
Provision for income taxes (benefit) 51,013 (89,546) 23,900 35,300 373,700
----------- ----------- ----------- ----------- -----------
Income (loss) before cumulative effect of accounting change 91,247 (79,478) 60,709 145,258 450,946
Cumulative effect of change in accounting for goodwill - - - - (234,742)
----------- ----------- ----------- ----------- -----------
Net income (loss) $ 91,247 $ (79,478) $ 60,709 $ 145,258 $ 216,204
=========== =========== =========== =========== ===========
Income (loss) per common share - primary:
Income (loss) before cumulative effect of accounting change $ 0.78 $ (0.85) $ 0.41 $ 0.91 $ 3.39
Cumulative effect of change in accounting for goodwill - - - - (1.99)
----------- ----------- ----------- ----------- -----------
Net income (loss) $ 0.78 $ (0.85) $ 0.41 $ 0.91 $ 1.40
=========== =========== =========== =========== ===========
Income (loss) per common share - fully diluted:
Income (loss) before cumulative effect of accounting change $ 0.74 $ (0.85) $ 0.40 $ 0.91 $ 3.20
Cumulative effect of change in accounting for goodwill - - - - (1.80)
----------- ----------- ----------- ----------- -----------
Net income (loss) $ 0.74 $ (0.85) $ 0.40 $ 0.91 $ 1.40
=========== =========== =========== =========== ===========
Common shares outstanding, weighted average:
Primary 106,159,514 106,282,651 117,922,440 109,748,923 118,074,091
Fully diluted 118,052,254 106,282,651 129,738,144 109,748,923 130,378,061
Return on average assets (1) 0.73% 0.60% 0.48% 0.60% 0.41%
Return on average equity (1) 14.71% 10.86% 7.93% 10.80% 7.47%
Return on average tangible equity (1),(2) 16.64% 11.56% 8.53% 11.68% 17.00%
Efficiency ratio (1) 49.47% 53.08% 56.99% 53.19% 58.85%
(1) Excludes the effect of the SAIF recapitalization of $243.9 million and FIB acquisition charges of $14.0 million which are
included in G&A for the third quarter and year of 1996.
(2) Net income excluding amortization of goodwill and other intangible assets, and cumulative effect of change in
accounting for goodwill, as a percentage of average equity excluding goodwill and other intangible assets.
</TABLE>
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