<PAGE> 1
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: APRIL 30, 1997
WESTCORP
(Exact name of registrant as specified in its charter)
CALIFORNIA 33-13646 51-0308535
(State or other jurisdiction Commission File IRS Employer
of incorporation) Number Identification Number
23 PASTEUR, IRVINE, CALIFORNIA 92618-3816
(Address of principal executive offices) (Zip Code)
714-727-1000
(Registrant's telephone number, including area code)
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ITEM 5: Other Events
On Tuesday, April 29, 1997, Westcorp, the financial services
holding company whose principal subsidiaries are Western Financial Bank, F.S.B.
and WFS Financial Inc announced the departure of Lee Thyer, Senior Executive
Vice President - Branch Division, and Director of WFS Financial Inc.
ITEM 7: Financial Statements and Exhibits
a. List of documents filed as a part of this report
Exhibit 20. Westcorp News Release of April 29, 1997
WESTCORP
a California Corporation
Dated: April 30, 1997
/s/ RICHARD A. PALMER
--------------------------
Richard A. Palmer
Vice President , Westcorp
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NEWS RELEASE RELEASE DATE: April 29, 1997
CONTACT: Lee Whatcott
Senior Vice President & CFO
(714) 727-1629
WESTCORP
- -------------------------------------------------------------------------------
WESTCORP ANNOUNCES FIRST QUARTER RESULTS AND OTHER RECENT DEVELOPMENTS
Irvine, CA: Westcorp (NYSE: WES), the financial services holding company whose
principal subsidiaries are Western Financial Bank, F.S.B. (the "Bank") and WFS
Financial Inc (Nasdaq: WFSI), today announced net income of $7.9 million, or
$0.30 per share, for the first quarter ended March 31, 1997 compared with $9.8
million, or $0.38 per share, for the same period in 1996.
Noninterest income rose to $51.8 million for the first quarter from $42.3
million a year ago. This represents a 22% increase over the first quarter of
1996 and results primarily from larger mortgage and consumer loan servicing
portfolios. Net interest income totalled $26.0 million for the current first
quarter compared with $22.9 million for the same period a year ago. The
increase over 1996 reflects continued improvement in interest yields and lower
cost of funds.
At March 31, 1997, total serviced loans, including those serviced for others,
reached $9.4 billion, up 4.3% from $9.0 billion at December 31, 1996.
Noninterest expense increased to $57.2 million during the 1997 first quarter
compared with $39.9 million a year ago. The majority of the increase stemmed
from geographic expansion and investments in automation that enhance the growth
opportunities for Westcorp's automobile lending, mortgage and commercial
banking businesses.
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Westcorp's originations of automobile and other consumer loans totalled $554
million during the first quarter of 1997 compared with $506 million originated
during the comparable period of 1996. This represents a 9.6% increase over the
same quarter in 1996. The increase in these loan originations was a result of
the nationwide expansion by WFS as well as continued expansion in its existing
markets, tempered by a heightened emphasis on improving credit quality.
Mortgage loan originations by the Bank during the first quarter of 1997
increased to $441 million compared with $309 million during the comparable
period of 1996. This represents a 43% increase over the prior year, reflecting
an improved real estate market and continued efficiencies gained in the Bank's
origination capacity.
Nonperforming assets totalled $35.7 million at March 31, 1997, compared with
$33.0 million at December 31, 1996. As a percent of total assets,
nonperforming assets remained unchanged at 1.0%. Loans delinquent 60 days or
more also remained unchanged at 1.1% from March 31, 1997 compared to December
31, 1996. The allowance for loan losses was $40.3 million at March 31, 1997
and $40.2 million at December 31, 1996. This equates to 2.2% of total loans as
of March 31, 1997 compared with 2.4% at December 31, 1996.
In other matters, the Board of Directors announced a cash dividend of $.10 per
share for shareholders of record as of May 14, 1997 payable May 28, 1997.
Also, the Board of Directors of the Bank has authorized its Investment
Committee to repurchase up to 800,000 shares of WFS Financial Inc common stock.
WFS also announced the departure of Lee Thyer, Senior Executive Vice President
- - Branch Division, and Director. The Branch Division will now report directly
to WFS President, Joy Schaefer.
Western Financial Bank offers a broad spectrum of banking and customer service
opportunities, including residential real estate lending through its mortgage
banking and equity lending divisions, deposit gathering through its retail
branch network, and commercial banking. The Bank currently performs these
activities through nine
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wholesale mortgage banking offices in six states, 24 retail mortgage banking
offices in seven states, and through 26 retail banking offices in California.
At March 31, 1997, the Bank serviced $6.1 billion of mortgage loans.
All financing of automobile and light duty truck loans is conducted by WFS, a
subsidiary of the Bank. WFS currently originates and purchases loans in
California and 31 other states through 141 offices. At March 31, 1997, WFS
serviced $3.2 billion of loans secured by automobiles and light duty trucks.
# # #
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WESTCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
March 31, December 31
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Cash, investments and time deposits $ 271,254 $ 315,905
Mortgage-backed securities 825,994 849,548
Loans:
Consumer (1) 318,862 284,858
Real Estate (2) 1,494,859 1,438,892
Commercial 13,258 7,867
Allowance for loan losses (40,273) (40,211)
Real estate owned, net 10,642 11,279
Non interest-earning assets 511,176 466,907
----------- -----------
$ 3,405,772 $ 3,335,045
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $ 1,908,977 $ 1,873,942
Securities sold under agreements to repurchase 289,529 287,412
FHLB advances and other borrowings 242,443 281,945
Non interest-bearing liabilities 539,979 468,899
----------- -----------
2,980,928 2,912,198
Subordinated debentures 105,066 104,917
Shareholders' equity 319,778 317,930
----------- -----------
$ 3,405,772 $ 3,335,045
=========== ===========
</TABLE>
(1) Net of unearned discount and includes loans held for sale.
(2) Net of undisbursed loan proceeds and includes loans held for sale.
<PAGE> 5
WESTCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands, except share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
-------- --------
<S> <C> <C>
Interest income:
Loans, including fees $ 43,884 $ 41,660
Mortgage-backed securities 15,186 14,196
Investment securities 1,977 1,795
Other 1,483 1,430
-------- --------
TOTAL INTEREST INCOME 62,530 59,081
Interest expense:
Deposits 25,935 25,117
Federal Home Loan Bank advances
and other borrowings 7,043 6,033
Securities sold under agreements to repurchase 3,503 5,074
-------- --------
TOTAL INTEREST EXPENSE 36,481 36,224
-------- --------
NET INTEREST INCOME 26,049 22,857
Provision for loan losses 4,371 5,600
-------- --------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 21,678 17,257
Noninterest income:
Automobile lending 45,634 36,448
Mortgage banking 5,031 4,314
Investment and mortgage-backed
securities losses -- (1,974)
Insurance income 1,265 4,350
Real estate operations (259) (1,560)
Rental operations (258) 90
Miscellaneous 347 616
-------- --------
TOTAL NONINTEREST INCOME 51,760 42,284
Noninterest expenses:
Salaries and employee benefits 33,462 23,247
Occupancy 3,819 2,594
Insurance 160 1,206
Miscellaneous 19,776 12,850
-------- --------
TOTAL NONINTEREST EXPENSES 57,217 39,897
-------- --------
INCOME BEFORE INCOME TAXES 16,221 19,644
Income taxes 6,814 8,074
-------- --------
INCOME BEFORE MINORITY INTEREST 9,407 11,570
Minority interest in earnings of subsidiaries 1,511 1,722
-------- --------
NET INCOME $ 7,896 $ 9,848
======== ========
NET INCOME PER COMMON SHARE
AND COMMON SHARE EQUIVALENTS $ 0.30 $ 0.38
======== ========
CASH DIVIDENDS DECLARED PER SHARE
OF COMMON STOCK $ 0.10 $ 0.10
======== ========
</TABLE>
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WESTCORP AND SUBSIDIARIES
OTHER SELECTED FINANCIAL DATA (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------
1997 1996
-----------------------------
<S> <C> <C>
LOAN ORIGINATIONS
Consumer $ 554,160 $ 505,736
Real Estate 441,469 308,799
Commercial 7,666
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Total $ 1,003,295 $ 814,535
============= ===========
INTEREST RATE SPREAD - OWNED LOANS
Yield on interest-earning assets 8.47% 8.34%
Cost of interest-bearing liabilities 5.81% 5.87%
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Interest spread 2.66% 2.47%
============= ===========
OWNED LOAN LOSS EXPERIENCE
Consumer 3.43% 3.63%
Real Estate 0.24% 0.14%
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Weighted average loss 0.78% 0.77%
============= ===========
</TABLE>
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---------- ----------
<S> <C> <C>
SERVICING PORTFOLIO (1)
Consumer $3,217,318 $3,048,678
Real Estate 6,132,177 5,918,497
Commercial 13,257 7,867
---------- ----------
Total $9,362,752 $8,975,042
========== ==========
</TABLE>
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-------------------------- --------------------------
Amount % Amount %
-------------------------- --------------------------
<S> <C> <C> <C> <C>
OWNED LOAN DELINQUENCY 60+
Consumer $ 2,735 0.9% $ 2,524 0.9%
Real Estate 17,915 1.2% 17,022 1.2%
------- ------- ------- -------
Total $20,650 1.1% $19,546 1.1%
======= ======= ======= =======
</TABLE>
(1) At end of period, net of unearned discount and includes loans held for
sale.
