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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)
July 26, 1996
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WESTERFED FINANCIAL CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware 0-22772 81-3899950
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(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification
incorporation) Number)
110 East Broadway, Missoula, Montana 59802
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (406) 721-5254
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N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On July 26, 1996, the Registrant issued the press
release attached as Exhibit 100.5 announcing fourth quarter
and year end earnings and a cash dividend.
Item 7. Financial Statements and Exhibits
(a) Exhibits
100.5 Press release, dated July 26, 1996
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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.
WesterFed Financial Corporation
Date: July 31, 1996 By:
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Lyle R. Grimes
President & Chief Executive Officer
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Index to Exhibits
Sequentially
Numbered Page
Where Attached
Exhibit Exhibits
Number are located
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100.5 Press Release dated July 26, 1996 5
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WESTERFED FINANCIAL CORPORATION ANNOUNCES
FOURTH QUARTER AND YEAR-END EARNINGS
Special Dividend & Increased Quarterly Dividend Also Announced
Missoula, Montana -- July 26, 1996 -- WesterFed Financial Corporation
(the "Company") (NASDAQ - WSTR), the holding company for Western Federal Savings
Bank of Montana (the "Bank"), announced earnings for the fiscal year ended June
30, 1996 increased 12.2% to $4.6 million, or $1.07 per share, as compared to
$4.1 million, or $0.96 (see footnote 1) per share, for the fiscal year ended
June 30, 1995. Earnings for the fourth quarter ended June 30, 1996 increased
20.0% to $1.2 million, or $0.29 per share, as compared to $1.0 million, or $0.24
(see footnote 1) per share, for the same quarter ended June 30, 1995. Book value
per share increased to $17.88 at June 30, 1996 from $17.09 at June 30, 1995 and
stockholders equity increased $3.5 million, or 4.7%, to $78.6 million at June
30, 1996 from $75.1 million at June 30, 1995.
The Company also announced it will pay a regular cash dividend of $0.09
per share for the quarter ended June 30, 1996 plus a special dividend of $0.033
reflecting a 10.0% addition to the $0.33 per share dividends declared during the
fiscal year just ended. The total of $0.123 in dividends will be payable on
August 20, 1996 to stockholders of record on August 6, 1996. The regular cash
dividend is a 5.9% increase over the prior quarter's dividend of $0.085 per
share. The Company has increased cash dividends every quarter since becoming a
public company.
President/Chief Executive Officer Lyle R. Grimes stated, "We are
gratified with the results of the past year. Earnings increased by 12.2% and the
one-time expenses of restructuring and consolidating our operations are behind
us. We constructed two branch offices, installed a voice mail system and are
currently installing a telephone banking system. New ATM's were installed in six
locations. Loan origination volume is up 27.5% over last fiscal year and
non-performing assets stood at 0.13% at year end. Deposits increased by $6.0
million as we made progress in attaining our goals of checking account growth.
The special dividend reflects this performance and the Board of Director's
confidence in the Company's future."
Net income increased $200,000, or 20.0% to $1.2 million for the quarter
ended June 30, 1996 as compared to $1.0 million for the same quarter ended June
30, 1995. Net interest income increased $459,000, non-interest income increased
$69,000 and income tax expense decreased $149,000 while non-interest expenses
increased $454,000. The increase in net interest income was primarily the result
of an increase in average net earning assets of $4.8 million to
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$66.1 million during the quarter ended June 30, 1996 from $61.3 million during
the quarter ended June 30, 1995. The net interest rate spread increased to 2.78%
at June 30, 1996 as compared to 2.57% at June 30, 1995. The average yield on
average interest earning assets increased to 7.81% during the quarter ended June
30, 1996 from 7.52% for the same period the previous year. The average interest
rate paid on average interest bearing liabilities increased to 5.03% during the
quarter ended June 30, 1996 from 4.95% for the same period last year. The
average interest rate on deposits increased to 4.49% during the period ended
June 30, 1996 from 4.46% for the same period the previous year. Included in the
$3.8 million of non-interest expense for the quarter ended June 30, 1996 was
$126,000 of costs related to the write-off of the older, existing branch
facility in Hamilton where a new facility was constructed. Income tax expense
decreased $149,000 due primarily to a reduction in the effective state income
tax rate for the fiscal year ended June 30, 1996.
Net income increased $500,000, or 12.2%, to $4.6 million for the fiscal
year ended June 30, 1996 from $4.1 million for the fiscal year ended June 30,
1995. The increase of $500,000 in net income resulted from an increase in net
interest income of $1.0 million and an increase in non-interest income of
$675,000, offset by an increase in non-interest expense of $1.2 million and an
increase in income tax expense of $83,000. Return on assets (ratio of net income
to average total assets) increased to 0.79% for the fiscal year ended June 30,
1996 from 0.76% for the fiscal year ended June 30, 1995. Average net interest
earning assets increased $3.9 million to $65.9 million for fiscal 1996 from
$62.0 million for fiscal 1995. The $675,000 increase in non-interest income was
the result of increases in service fees, net gain on sale of loans and
securities available for sale and other operating income of $358,000, $298,000
and $85,000 respectively while loan origination fees decreased $66,000. The $1.2
million increase in non-interest expense was primarily the result of increases
in net occupancy expense of premises of $101,000, marketing and advertising of
$103,000 and other operating expenses of $791,000. The $791,000 increase in
other operating expenses was primarily related to costs incurred for the
engagement of a consulting firm to assist in developing a long-term operations
plan, restructuring and centralization of operations, checking account volume
and the costs associated with constructing branch offices in Helena and
Hamilton.
President Grimes stated "We are pleased with our efforts to increase
our loan and deposit base and account relationships. Loans receivable increased
$54.0 million, or 17.4% reflecting total loan originations for the fiscal year
1996 of $165.5 million, a 27.5% increase over fiscal 1995 loan originations of
$129.8 million. A new dealer finance program was implemented where
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consumers originate loans directly through local auto and recreational vehicle
dealers. In the first two months of operations, $2.8 million of these new
consumer type loans where added to the portfolio. "Asset quality remains strong
with no real estate owned for the seventh consecutive quarter. Non-performing
assets to total assets were 0.13% at June 30, 1996 and total allowance for loan
losses to total non-performing assets was 280.42%."
Total deposits grew by $6.0 million during the year ended June 30, 1996
to $350.2 million from $344.2 million at June 30, 1995. During the year the Bank
opened 4,413 new Western Style checking accounts in our nineteen offices.
Construction was completed in December on the Bank's nineteenth Montana
office, which serves the fast growing subdivisions and shopping complexes in the
north-end of Helena. Construction was completed in March on the Hamilton office
which serves a rapidly developing Ravalli County in south-western Montana. In
addition, six ATM's have been added during the past fiscal year, bringing to
twelve the ATM's installed since April, 1995.
In January 1996, the Board of Directors of the Company announced a plan
to repurchase up to 5.0% of its outstanding shares of common stock in the open
market during a twelve month period. No shares have been repurchased since that
announcement.
The Company announced the adoption of a Dividend Reinvestment and Stock
Purchase Plan which will be implemented during the first quarter ending
September 30, 1996. This plan will enable shareholders of record to apply
dividends paid on common stock toward the purchase of additional shares. An
option to make quarterly cash payments to purchase additional shares will also
be part of the plan. Grimes stated "The Plan is a convenient and economical way
for shareholders to increase their ownership of WesterFed Financial
Corporation's common stock."
WesterFed Financial Corporation's only subsidiary, Western Federal
Savings Bank of Montana, Montana's largest savings bank, operates nineteen
branch offices and one loan servicing center in the following Montana cities:
Missoula, Hamilton, Helena, East Helena, Bozeman, Great Falls, Conrad,
Lewistown, Miles City, Hardin and Billings.
FOOTNOTE 1 -
1995 earnings per share have been restated to reflect the effect of a
decrease in the weighted average shares outstanding as a result of applying the
treasury stock method to common stock equivalents.
The per share earnings were previously reported at $0.89 and $0.22 per
share for the year and quarter ended June 30, 1995 respectively.
This restatement did not result in a material change to the historical
earnings per share trend line.
CONTACT: Dale W. Brevik, Vice President/Marketing
James A. Salisbury, Treasurer/Chief Financial Officer
(406) 721-5254
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CONSOLIDATED BALANCE SHEETS
WESTERFED FINANCIAL CORPORATION AND SUBSIDIARIES
(Dollars in thousands, except share and per share data)
June 30, June 30,
ASSETS 1996 1995
Cash and due from banks $ 7,829 $ 7,173
Interest-bearing due from banks 5,470 8,201
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Cash and cash equivalents 13,299 15,374
Interest-bearing deposits 3,000 2,102
Investment securities available-for-sale 35,637 49,577
Investment securities, at amortized cost
(estimated market value of $9,399 at
June 30, 1996 and $12,964 at June 30, 1995) 9,347 12,794
Stock in Federal Home Loan Bank, at cost 7,471 6,750
Mortgage-backed securities available-for-sale 44,909 64,900
Mortgage-backed securities, at amortized
cost (estimated market value of $59,361 at
June 30, 1996 and $79,303 at June 30, 1995) 60,038 78,925
Loans available-for-sale 3,967 2,960
Loans receivable, net 364,226 310,161
Accrued interest receivable 3,695 3,875
Real estate owned, net -- --
Premises and equipment, net 13,758 11,372
Cash surrender value of life insurance
policies 3,183 2,951
Other assets 1,401 1,544
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Total assets $ 563,931 $ 563,285
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits 350,212 344,155
Borrowed funds 125,838 134,704
Advances from borrowers for taxes
and insurance 3,255 3,309
Income taxes 1,961 2,162
Accrued interest payable 1,219 1,247
Accrued expenses and other liabilities 2,839 2,562
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Total liabilities 485,324 488,139
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Stockholders' Equity:
Preferred stock, $.01 par value:
5,000,000 shares authorized-
none outstanding -- --
Common stock, $.01 par value:
10,000,000 shares authorized-
4,395,204 shares outstanding at
June 30, 1996 and 4,396,456 shares
outstanding at June 30, 1995 46 46
Additional paid-in capital 45,451 45,232
Common stock acquired by ESOP/RRP (3,558) (4,271)
Treasury stock, at cost (3,079) (3,066)
Net unrealized gain on securities
available-for-sale (226) 295
Retained earnings, substantially restricted 39,973 36,910
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Total stockholders' equity 78,607 75,146
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Total liabilities and stockholders'
equity $ 563,931 $ 563,285
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Book value per share $ 17.88 $ 17.09
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CONSOLIDATED STATEMENTS OF INCOME
WESTERFED FINANCIAL CORPORATION AND SUBSIDIARIES
(Dollars in thousands, except share and per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
June 30, June 30,
1996 1995 1996 1995
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Interest Income:
Loans receivable $ 7,605 $ 6,175 $ 28,640 $ 23,191
Mortgage-backed securities
available-for-sale 882 1,037 4,214 3,482
Mortgage-backed securities 1,130 1,325 4,953 5,745
Investment securities
available-for-sale 627 893 2,891 3,502
Investment securities 180 195 878 260
Interest-bearing deposits 215 340 787 1,423
Other 46 45 181 180
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Total interest income 10,685 10,010 42,544 37,783
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Interest expense:
NOW and money market
demand 415 455 1,740 1,913
Savings 477 496 1,940 2,110
Certificates of deposit 2,967 2,788 12,074 9,653
Cost of Swaps and Caps 81 84 331 382
Advances from FHLB-Seattle
and other borrowed funds 2,108 2,009 8,652 6,926
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Total interest expense 6,048 5,832 24,737 20,984
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Net interest income 4,637 4,178 17,807 16,799
Provision for loan losses -- -- -- --
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Net interest income
after provision for
loan losses 4,637 4,178 17,807 16,799
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Non-interest income:
Loan origination fees 99 198 348 414
Service fees 556 468 2,120 1,762
Net gain on sale of loans
and securities available-
for-sale 37 5 577 279
Other 211 163 837 752
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Total non-interest
income 903 834 3,882 3,207
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Non-interest expenses:
Compensation and employee
benefits 1,907 1,840 7,523 7,446
Net occupancy expense
of premises 358 332 1,450 1,349
Equipment and furnishings
expense 181 152 643 553
Data processing expense 151 162 632 621
Federal insurance premium 203 200 806 806
Marketing and advertising 170 158 559 456
Net expense (income) from
operation of real estate
owned (1) -- (1) 3
Other 877 548 2,962 2,171
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Total non-interest expense 3,846 3,392 14,574 13,405
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Income before income taxes 1,694 1,620 7,115 6,601
Income taxes (466) (615) (2,556) (2,473)
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Net income $ 1,228 $ 1,005 $ 4,559 $ 4,128
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Net income per share (1) $ 0.29 $ 0.24 $ 1.07 $ 0.96
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Dividends per share $ 0.1230 $ 0.0650 $ 0.3630 $ 0.2094
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Dividend payout ratio 42.4% 27.1% 33.9% 21.8%
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Weighted average common
shares outstanding for
earnings per share 4,247,996 4,203,996 4,259,109 4,313,615
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(1) 1995 Restated
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Selected Financial Ratios and Other Data:
(Unaudited)
Three Months Ended Twelve Months Ended
June 30, June 30,
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1996 1995 1996 1995
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Performance Ratios:
Return on assets (ratio of
net income to average total
assets) (1) 0.86 % 0.72 % 0.79 % 0.76 %
Return on equity (ratio of
net income to average
equity) (1) 6.25 5.37 5.90 5.54
Interest rate spread information:
Average during period 2.78 2.57 2.62 2.69
End of period 2.67 2.38 2.67 2.38
Net interest margin(1)(2) 3.39 3.14 3.23 3.23
Ratio of non-interest expense
to avg. total assets (1) 2.68 2.44 2.53 2.47
Asset Quality Ratios:
Non-performing assets to total
assets, at end of period 0.13 0.10 0.13 0.10
Total allowance for loan losses
to total non-performing
assets (3) 280.42 350.35 280.42 350.35
Capital Ratios:
Equity to total assets, at
end of period 13.94 13.34 13.94 13.34
Average equity to average
assets 13.71 13.42 13.42 13.70
Ratio of average interest-earning
assets to average interest-
bearing liabilities 113.73 113.00 113.58 113.51
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(1) Annualized
(2) Net interest income divided by average interest-earning assets
(3) Includes non-performing and foreclosed assets
