<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
/X/ Annual Report Pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the Fiscal Year Ended December 31, 1997
Or
/ / Transition Report Pursuant to section 15(d) of the Securities Exchange
Act of 1934
Commission file number 0-20526
ARCADIA FINANCIAL LTD.
401(k) PROFIT SHARING PLAN
(Title of the plan)
ARCADIA FINANCIAL LTD.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1664848
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
7825 WASHINGTON AVENUE SOUTH, MINNEAPOLIS, MN 55439-2435
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 942-9880
<PAGE>
FINANCIAL STATEMENTS
ARCADIA FINANCIAL LTD.
401(k) PROFIT SHARING PLAN
YEARS ENDED DECEMBER 31, 1997 AND 1996
<PAGE>
Arcadia Financial Ltd. 401(k) Profit Sharing Plan
Financial Statements
Years ended December 31, 1997 and 1996
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Financial Statements
Statements of Net Assets Available for Benefits. . . . . . . . . . . . . . . . . . 2
Statements of Changes in Net Assets Available for Benefits . . . . . . . . . . . . 2
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 27(a)--Schedule of Assets Held for Investment Purposes. . . . . . . . . . . . 8
Item 27(d)--Schedule of Reportable Transactions. . . . . . . . . . . . . . . . . . 9
</TABLE>
<PAGE>
Report of Independent Auditors
Arcadia Financial Ltd. 401(k)
Profit Sharing Plan Committee
We have audited the accompanying statements of net assets available for benefits
of Arcadia Financial Ltd. 401(k) Profit Sharing Plan as of December 31, 1997 and
1996, and the related statements of changes in net assets available for benefits
for the years then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1997 and 1996, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1997, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the basic financial statements. The supplemental
schedules have been subjected to the auditing procedures applied in our audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
The information presented in the "Schedule of Reportable Transactions" and
certified by the custodian does not disclose the historical cost of investments
sold, and related gain or loss. Disclosure of this information is required by
the Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
June 12, 1998
<PAGE>
Arcadia Financial Ltd. 401(k) Profit Sharing Plan
Statements of Net Assets Available for Benefits
<TABLE>
<CAPTION>
DECEMBER 31
1997 1996
-------------------------
<S> <C> <C>
ASSETS
Cash $ 45,066 $ -
Investments:
Mutual funds 1,919,036 742,651
Arcadia Financial Ltd. Common stock 236,467 315,503
Participant notes receivable 73,794 1,800
-------------------------
2,229,297 1,059,954
Employer contributions receivable 356,228 430,732
Employee contributions receivable 28,985 14,370
-------------------------
Net assets available for benefits $ 2,659,576 $ 1,505,056
-------------------------
-------------------------
</TABLE>
Statements of Changes in Net Assets Available for Benefits
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1997 1996
-------------------------
<S> <C> <C>
Additions:
Employee contributions $1,019,758 $ 673,807
Employer contributions 356,228 430,732
Investment income 173,231 37,898
Miscellaneous 14,412 -
-------------------------
1,563,629 1,142,437
Deductions:
Benefits paid 248,532 66,680
Net realized and unrealized depreciation in fair
value of investments (160,577) (25,912)
-------------------------
Net increase 1,154,520 1,049,845
Net assets available for benefits at
beginning of year 1,505,056 455,211
-------------------------
Net assets available for benefits at end of year $2,659,576 $1,505,056
-------------------------
-------------------------
</TABLE>
SEE ACCOMPANYING NOTES.
2
<PAGE>
Arcadia Financial Ltd. 401(k) Profit Sharing Plan
Notes to Financial Statements
December 31, 1997
1. DESCRIPTION OF THE PLAN
GENERAL
Arcadia Financial Ltd. 401(k) Profit Sharing Plan (the Plan), formerly Olympic
Financial Ltd. 401(k) Profit Sharing Plan, is a defined contribution plan
sponsored by Arcadia Financial Ltd. (the Company). The Plan became effective on
January 1, 1995. An employee is eligible to participate in the Plan upon
attaining the age of 21 and completing a qualifying period of 12 consecutive
months of employment within which the employee has had at least 1,000 credited
hours of service.
The following description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
CONTRIBUTIONS
The participants may contribute up to 10% of his or her annual compensation to
any of the investment funds. Matching contributions by the Company are made at a
percentage of the participant's contribution which the Company, in its sole
discretion, determines from year to year. Effective beginning in the 1996 plan
year, participants must be employed on December 31 of each year to receive the
matching contribution for that year.
VESTING
Participants are fully vested at all times for participant contribution amounts.
Matching contributions by the Company are vested 20% each year beginning year
two; fully vested at the end of year six of vested service. Effective April 29,
1996, the Board of Directors of the Company approved a revised vesting schedule
that provides 50% vesting after one year and 100% vesting after two years of
service.
PARTICIPANT LOANS AND HARDSHIP WITHDRAWALS
Participants can borrow up to the lesser of $50,000 or one-half of their vested
account balance. Interest on loans accrues at prime rate plus 2%. Loans are
collateralized by the participant's account balance.
3
<PAGE>
Arcadia Financial Ltd. 401(k) Profit Sharing Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
Hardship withdrawals of elective deferrals are permitted by the Plan, as
described in the Plan agreement.
PAYMENT OF BENEFITS
Benefits are typically paid as soon as practicable after a participant retires,
dies, becomes disabled or is terminated from the Company. Benefits are payable
in the form of a lump sum distribution or installments over a fixed period of
years depending on the participant's request.
PLAN TERMINATION
In the event the Plan terminates, participants will become 100% vested in their
accounts. The accounts of all participants will continue to share in trust
earnings, gains or losses until such time as distributions are made.
FEES AND EXPENSES
All administrative expenses of the Plan are paid for by the Company. Commissions
for the purchase or sale of investments, if applicable, are paid by the Plan and
are added to the cost of investments purchased or subtracted from the proceeds
of investments sold.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accounting records of the Plan are maintained on the accrual basis.
INVESTMENTS
Arcadia Financial Ltd. Common stock is stated at fair value (the last reported
sales price on the last business day of the year). Fair value of mutual funds
represents the net asset value of the fund shares which is calculated based on
the valuation of the fund's underlying investments at fair value at the end of
the year. Participant notes receivable are valued at cost which approximates
fair value.
4
<PAGE>
Arcadia Financial Ltd. 401(k) Profit Sharing Plan
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
5
<PAGE>
Arcadia Financial Ltd. 401(k) Profit Sharing Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
The Plan's assets have been deposited in investment funds managed by a trust
company. Allocation of contributions to the available investment funds is based
upon the employee's choice. The changes in assets of each fund during the years
ended December 31, 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
IDS CASH
IDS NEW IDS BOND MANAGEMENT
DIMENSIONS IDS MUTUAL FUND FUND
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Net assets available for benefits at December 31, 1995 $ 92,989 $ 46,188 $ 15,776 $ 12,224
Additions:
Contributions 476,944 241,440 63,842 39,272
Investment income 16,659 17,157 2,649 1,217
-----------------------------------------------------------
493,603 258,597 66,491 40,489
Deductions:
Benefits paid to participants 20,570 14,260 3,965 3,885
Interfund-transfers (net) 19,885 (2,249) 4,343 1,544
Net realized and unrealized appreciation (depreciation)
in current value of investments 43,357 1,838 (101) (4)
-----------------------------------------------------------
Net assets available for benefits at December 31, 1996 629,264 290,114 82,544 50,368
Additions:
Contributions 620,990 350,456 104,431 63,914
Investment income 81,363 76,545 10,881 4,199
Miscellaneous - - - -
-----------------------------------------------------------
702,353 427,001 115,312 68,113
Deductions:
Benefits paid to participants 132,573 43,290 15,891 4,962
Interfund-transfers (net) (9,051) (10,602) (2,575) 10,302
Net realized and unrealized appreciation (depreciation)
in current value of investments 96,104 (7,102) 1,910 (110)
-----------------------------------------------------------
Net assets available for benefits at December 31, 1997 $1,286,097 $656,121 $181,300 $123,711
-----------------------------------------------------------
-----------------------------------------------------------
<CAPTION>
ARCADIA
FINANCIAL LTD. LOAN
COMMON STOCK FUND UNALLOCATED TOTAL
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Net assets available for benefits at December 31, 1995 $154,202 $ - $133,832 $ 455,211
Additions:
Contributions 416,873 - (133,832) 1,104,539
Investment income 216 - - 37,898
-----------------------------------------------------------
417,089 - (133,832) 1,142,437
Deductions:
Benefits paid to participants 24,000 - - 66,680
Interfund-transfers (net) (25,323) 1,800 - -
Net realized and unrealized appreciation (depreciation)
in current value of investments (71,002) - - (25,912)
-----------------------------------------------------------
Net assets available for benefits at December 31, 1996 450,966 1,800 - 1,505,056
Additions:
Contributions 236,195 - - 1,375,986
Investment income 243 - - 173,231
Miscellaneous - - 14,412 14,412
-----------------------------------------------------------
236,438 - 14,412 1,563,629
Deductions:
Benefits paid to participants 50,403 1,413 - 248,532
Interfund-transfers (net) (48,301) 73,407 (13,180) -
Net realized and unrealized appreciation (depreciation)
in current value of investments (251,379) - - (160,577)
-----------------------------------------------------------
Net assets available for benefits at December 31, 1997 $337,321 $73,794 $ 1,232 $2,659,576
-----------------------------------------------------------
-----------------------------------------------------------
</TABLE>
6
<PAGE>
Arcadia Financial Ltd. 401(k) Profit Sharing Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
Investments that represent 5% or more of the Plan's net assets are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
1997
----------------
<S> <C>
IDS New Dimensions Fund, 46,199 shares $1,101,765
IDS Mutual, 40,426 shares 544,927
IDS Bond Fund, 30,178 shares 157,519
Arcadia Financial Ltd. Stock, 31,772 shares 236,467
DECEMBER 31,
1996
----------------
IDS New Dimensions Fund, 21,750 shares $ 450,209
IDS Mutual, 14,919 shares 201,064
Arcadia Financial Ltd. Stock, 22,117 shares 315,503
</TABLE>
4. INCOME TAX STATUS
The Internal Revenue Service ruled on February 4, 1998 that the Plan qualifies
under Section 401(a) of the Internal Revenue Code (IRC) and, therefore, the
related trust is not subject to tax under present income tax law. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The administrator is not aware of any course of
action or series of events that have occurred that might adversely affect the
Plan's qualified status.
5. YEAR 2000 ISSUE (UNAUDITED)
The Plan Sponsor has developed a plan to modify its internal information
technology to be ready for the year 2000 and has begun converting critical data
processing systems. The project also includes determining whether third party
service providers have reasonable plans in place to become year 2000 compliant.
The Plan sponsor does not expect this project to have a significant effect on
plan operations.
7
<PAGE>
Arcadia Financial Ltd. 401(k) Profit Sharing Plan
Item 27(a)--Schedule of Assets Held for Investment Purposes
E.I.N. 41-1664848
Plan #001
December 31, 1997
<TABLE>
<CAPTION>
IDENTITY OF ISSUER, BORROWER FAIR
OR SIMILAR PARTY UNITS HELD COST VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
IDS New Dimensions Fund 46,199 shares $ 985,435 $1,101,765
IDS Mutual 40,426 shares 563,134 554,927
IDS Bond Fund 30,178 shares 155,418 157,519
IDS Cash Management Fund 104,717 shares 104,717 104,825
Arcadia Financial Ltd. Stock* 31,772 shares 477,670 236,467
Participant Loans (9.50% to 10.50%,
maturing 6/15/98 through 3/31/02) 0 73,794
-----------------------------------
$2,286,374 $2,229,297
-----------------------------------
-----------------------------------
</TABLE>
*Indicates party-in-interest to the Plan.
8
<PAGE>
Arcadia Financial Ltd. 401(k) Profit Sharing Plan
Item 27(d)--Schedule of Reportable Transactions
E.I.N. 41-1664848
Plan #001
Year ended December 31, 1997
<TABLE>
<CAPTION>
CURRENT VALUE
OF ASSET ON
PURCHASE SELLING COST OF TRANSACTION NET GAIN
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE ASSET DATE OR (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CATEGORY (iii)--SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS
Arcadia Financial Ltd. Purchased 23,033 units in 26 transactions $291,369 $291,369 $291,369
Sold 13,378 units in 36 transactions $118,853 217,664 118,853 $(98,811)
IDS New Dimension Fund Purchased 32,368 units in 57 transactions 740,916 740,916 740,916
Sold 7,919 units in 53 transactions 185,420 * 185,420 *
IDS Mutual Purchased 30,701 units in 56 transactions 435,783 435,783 435,783
Sold 5,194 units in 53 transactions 74,716 * 74,716 *
IDS Bond Fund Purchased 23,322 units in 51 transactions 120,412 120,412 120,412
Sold 4,343 units in 35 transactions 22,685 * 22,685 *
IDS Cash Management Purchased 97,062 units in 52 transactions 97,062 97,062 97,062
Sold 26,127 units in 28 transactions 26,127 26,127 26,127 -
</TABLE>
There were no category (i), (ii) or (iv) transactions in the year ended December
31, 1997.
*This information is not available.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
ARCADIA FINANCIAL LTD.
401 (k) PROFIT SHARING PLAN
Date: June 29,1998
By: /s/ John A. Witham
-----------------------------------
John A. Witham
Executive Vice President and
Chief Financial Officer (Principal
Financial Officer)
By: /s/ Richard S. Deal
--------------------------------------
Richard S. Deal
Vice President,
Human Resources
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-08599 pertaining to the Arcadia Financial Ltd. 401(k) Profit Sharing
Plan of our report dated June 12, 1998, with respect to the financial statements
and schedules of the Arcadia Financial Ltd. 401(k) Profit Sharing Plan included
in this Annual Report (Form 11-K) for the year ended December 31, 1997.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
June 26, 1998
