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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)
September 4, 1997
WESTERFED FINANCIAL CORPORATION
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(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 September 4, 1997 and September 8, 1997 the
Registrant issued the press releases attached as Exhibit 99.6.
Item 7. Financial Statements and Exhibits
(a) Exhibits
99.6 Press releases, dated September 4, 1997 and
September 8, 1997
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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: September 11, 1997 By: /s/ Douglas G. Bardwell
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Douglas G. Bardwell
Executive Vice President/
Secretary
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Index to Exhibits
Sequentially
Numbered Page
Where Attached
Exhibit Exhibits
Number are located
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99.6 Press Releases dated September 4, 1997 5
and September 8, 1997
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WESTERFED FINANCIAL CORPORATION ANNOUNCES
CORRECTION TO PRESS RELEASE OF SEPTEMBER 4, 1997
Missoula, Montana -- September 8, 1997 -- WesterFed Financial Corporation (the
"Company") (NASDAQ - WSTR), the holding company for Western Federal Savings Bank
of Montana, today announced that earnings per share for the year ended June 30,
1997 has been revised from $0.90 per share to $0.96 per share. This revision is
based upon the completion of the audit by their independent public accounting
firm KPMG Peat Marwick LLP which corrected an error in the previous calculation
of earnings per share as reported on September 4, 1997.
CONTACT: Dale W. Brevik, Senior Vice President/Marketing Director
James A. Salisbury, Treasurer/Chief Financial Officer
(406) 721-5254
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/C O R R E C T I O N -- WesterFed Financial Corporation
In SFF003, "WesterFed Financial Corporation Announces: Record Fourth
Quarter Earnings. . . ," moved Friday, July 25, we are advised by WesterFed
Financial Corporation (the "Company") (NASDAQ - WSTR), the holding company for
Western Federal Savings Bank of Montana, reported today that the year to date
earnings per share of $0.96 for the fiscal year ended June 30, 1997 as reported
in the Company's earnings release dated July 25, 1997 was reported incorrectly
and should be $0.90. The total earnings per share for each quarter during the
fiscal year ended June 30, 1997 totaled $0.90 as compared to the $0.96 as
originally reported. The calculation error was the result of using year to date
weighted average common shares outstanding rather than weighted average common
shares outstanding at each quarter end in order to determine year to date
earnings per share.
WESTERFED FINANCIAL CORPORATION ANNOUNCES:
RECORD FOURTH QUARTER EARNINGS
ANNUAL EARNINGS
INCREASED QUARTERLY DIVIDEND
SPECIAL 10% CASH DIVIDEND
STOCK REPURCHASE PLAN
NEW BRANCH OPENING
Missoula, Montana -- July 25, 1997 -- WesterFed Financial Corporation
(the "Company") (NASDAQ -WSTR), the holding company for Western Federal Savings
Bank of Montana (the "Bank"), announced record earnings for the fourth quarter
ended June 30, 1997 of $2.1 million, or $0.38 per share, as compared to $1.2
million or, $0.29 per share, for the same period last year, a 31.0% increase on
a per share basis. The increase in earnings is primarily due to the growth in
the loan portfolio and the acquisition of Security Bancorp on February 28, 1997
(the "Acquisition"). The earnings for the year ended June 30, 1997 were $4.5
million, or $0.90 per share, as compared to earnings of $4.6 million, or $1.07
per share, for the same period last year. The earnings for the year ended June
30, 1997 include a one time after-tax charge to earnings of $1.4 million, or
$0.25 per share, based on 5.6 million outstanding shares, for a special FDIC
assessment, levied on all thrifts, to recapitalize the Savings Association
Insurance Fund ("SAIF"). While the special assessment significantly reduced the
Bank's earnings in fiscal year 1997, SAIF premiums have now been reduced
resulting in significantly lower deposit insurance costs.
The Company also announced it will pay a regular cash dividend of $0.11
per share for the quarter ended June 30, 1997 plus a special cash dividend of
$0.041 per share reflecting a 10.0% addition to the $0.41 per share dividends
declared during the fiscal year just ended. The total of $0.151 in dividends per
share will be payable on August 20, 1997 to stockholders of record on August 6,
1997. The regular quarterly cash dividend of $0.11 per share was increased 4.8%
over the prior quarter's regular cash dividend of $0.105 per share. The Company
has increased regular cash dividends every quarter since becoming a public
company.
The Board of Directors of the Company has also authorized a plan to
repurchase up to 5.0% of its outstanding shares of common stock in the open
market during a twelve month period depending upon market conditions. The
program will be conducted through the use of certain registered broker-dealers
with repurchases to be made from time-to-time at market prices. Shares
repurchased under the program will be held by the Company as treasury stock
which can be used in the future for general corporate purposes as needed. At
June 30, 1997 there were 5,564,904 shares of common stock outstanding.
President/Chief Executive Officer Lyle R. Grimes stated, "The Bank is very
pleased with the results of the year just ended. The Acquisition has allowed us
to fulfill our business strategy of adding commercial banking to our operations.
At June 30, 1997, the Bank had $26.8 million of agricultural loans and $28.9
million of non-real estate commercial loans. The Bank had no agricultural or
non-real estate commercial loans prior to the Acquisition. Consumer loans
increased by $93.1 million which includes first year growth of $31.2 million in
loans originated through the Bank's new auto and recreational dealer paper
program and the purchase of Security Bancorp's consumer loan portfolio of $28.1
million. The Bank finished the year with record quarterly earnings and total
assets approaching one billion dollars."
President Grimes continued, "The addition of Security Bancorp's sixteen
branch network added nine Montana cities to the Bank's markets and increased
deposits by $287.5 million. The Bank opened one new branch office in June in the
Lockwood community in the Billings market, began construction of a new branch
office on King Avenue in Billings, which is expected to be completed in late
1997, and completed the installation of the popular
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voice response "Teller-Fone" banking system. Loan originations were a record
$226.8 million and non-performing assets stood at 0.25% of assets at June 30,
1997. A Dividend Reinvestment and Stock Purchase plan was implemented in
September, 1996."
As a result of the acquisition of Security Bancorp and loan growth,
total assets increased to $955.6 million at June 30, 1997 as compared to $563.9
million at June 30, 1996. Total loans increased to $630.4 million at June 30,
1997 as compared to $368.2 million at June 30, 1996 and total deposits increased
to $630.3 million at June 30, 1997 as compared to $350.2 million at June 30,
1996. Total stockholders' equity increased to $104.3 million, or 10.9% of assets
and tangible stockholders' equity was 8.9% of tangible assets at June 30, 1997.
Net income increased to a record $2.1 million for the quarter ended
June 30, 1997 from $1.2 million for the same period last year. The increase in
earnings is primarily due to the growth in the loan portfolio and the
acquisition of Security Bancorp, which has been accretive to earnings in the
first full quarter of combined operations. The interest rate spread increased as
a result of the Bank's changing loan portfolio mix and the acquisition of
Security Bancorp to 3.38% at June 30, 1997 as compared to 2.67% at June 30,
1996. Provision for loan losses was $297,000 for the quarter reflecting
management's desire to maintain adequate loan loss reserves as it builds its
loan portfolio of commercial, agricultural and consumer loans. The quarter just
ended also included $245,000 in accruals of post retirement insurance benefits
for certain employees which also resulted in a decrease to income tax expense of
$489,000 for the reversal of deferred income taxes related to the cash surrender
value of insurance policies.
President Grimes further stated, "Operating expense control is a
primary concern of the Board of Directors and management. The Bank has incurred
significant personnel expenditures during the quarter just ended and will
continue to incur additional expenses during a portion of the next quarter
related to the extensive training of all Bank employees in sales skills to
further the Bank's efforts in becoming the premier community bank in Montana. In
addition, the Bank will incur significant costs related to a system wide
conversion to commercial banking data center software and bank hardware,
scheduled to be completed in February 1998. These technological improvements
will enable the Bank to offer full service commercial and retail banking
products through an investment estimated to be approximately $3.0 million. The
completion of these changes and the conversion will enable the Bank to realize
greater operating efficiencies due to the elimination of duplicative overhead
related to the current dual computer systems resulting from the Acquisition. In
addition, adding two new branches, developing commercial lending centers in the
Bank's markets and marketing the consolidated Bank's services to Montana
markets, will further increase operating costs during fiscal year 1998. These
expenditures are being made to improve the Bank's ability to meet the ever
increasing competition in the financial services market and build shareholder
value."
Earnings for the fiscal year ended June 30, 1997 were reduced by the
after tax $1.4 million SAIF assessment, costs related to the Acquisition, and
provision for loan losses of $400,000. Only four months of combined operations
resulting from the Acquisition are included in the operating results. Thus,
earnings for the fiscal year ended June 30, 1997 were $4.5 million, basically
unchanged from $4.6 million for the same period last year.
Non-performing assets totaled $2.4 million, or 0.25%, at June 30, 1997,
up from $715,000, or 0.13% of assets, at June 30, 1996 due primarily to the
Acquisition. The ratio of allowance for loan losses to non-performing assets was
191.01% at June 30, 1997. Loan loss reserves were $4.7 million at June 30, 1997
as compared to $2.0 million at June 30, 1996. For the fifth consecutive year,
the Company has had minimal foreclosed property assets with no foreclosed
property at June 30, 1995, 1996, and 1997.
WesterFed Financial Corporation's only subsidiary, Western Federal
Savings Bank of Montana, which is Montana's largest savings bank, operates
nineteen Western Federal offices and seventeen Security Bank Division offices in
twenty Montana communities.
CONTACT: Dale W. Brevik, Vice President/Marketing
James A. Salisbury, Treasurer/Chief Financial Officer
(406) 721-5254
This release is available via fax through the PRN "Stock on Call" service which
can be accessed by dialing 1-800-578-7888.
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CONSOLIDATED BALANCE SHEETS
WESTERFED FINANCIAL CORPORATION AND SUBSIDIARIES
(Dollars in thousands, except share and per share data)
<TABLE>
<CAPTION>
June 30, June 30,
1997 1996
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ASSETS
<S> <C> <C>
Cash and due from banks $ 16,999 $ 7,829
Interest-bearing due from banks 160 5,470
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Cash and cash equivalents 17,159 13,299
Interest-bearing deposits 2,000 3,000
Investment securities available-for-sale 51,683 35,637
Investment securities, at amortized cost (estimated market value
of $27,728 at June 30, 1997 and $9,399 at June 30, 1996) 27,466 9,347
Stock in Federal Home Loan Bank of Seattle, at cost 11,456 7,471
Mortgage-backed securities available-for-sale 31,388 44,909
Mortgage-backed securities, at amortized cost (estimated market value
of $119,193 at June 30, 1997 and $59,278 at June 30, 1996) 117,781 60,038
Loans available-for-sale 3,700 3,967
Loans receivable, net 626,577 364,226
Accrued interest receivable 6,957 3,695
Premises and equipment, net 29,291 13,758
Core deposit intangible 5,276 --
Goodwill 15,562 --
Cash surrender value of life insurance policies 6,120 3,183
Other assets 3,223 1,401
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Total assets $ 955,639 $ 563,931
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 630,397 $ 350,212
Borrowed funds 199,236 125,838
Advances from borrowers for taxes and insurance 3,753 3,255
Income taxes 3,504 1,961
Accrued interest payable 3,593 1,219
Accrued expenses and other liabilities 10,897 2,839
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Total liabilities 851,380 485,324
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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;
5,564,904 shares outstanding at June 30, 1997, and
4,395,204 outstanding at June 30, 1996 56 46
Additional paid-in capital 67,889 45,451
Common stock acquired by ESOP/RRP (2,884) (3,558)
Treasury stock, at cost (3,081) (3,079)
Net unrealized loss on securities available-for-sale (35) (226)
Retained earnings, substantially restricted 42,314 39,973
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Total stockholders' equity 104,259 78,607
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Total liabilities and stockholders' equity $ 955,639 $ 563,931
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Book value per share $ 18.73 $ 17.88
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Book value per share - tangible $ 14.91 $ 17.88
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CONSOLIDATED STATEMENTS OF INCOME WESTERFED FINANCIAL CORPORATION AND
SUBSIDIARIES (Dollars in thousands, except share and per share data)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
June 30, June 30,
1997 1996 1997 1996
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<S> <C> <C> <C> <C>
Interest income:
Loans receivable $ 13,091 $ 7,605 $ 37,923 $ 28,640
Mortgage-backed securities available-for-sale 699 882 2,844 4,214
Mortgage-backed securities 1,994 1,130 5,341 4,953
Investment securities available-for-sale 1,045 627 3,185 2,891
Investment securities 352 180 700 878
Interest-bearing deposits 199 215 1,045 787
Other 75 46 223 181
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Total interest income 17,455 10,685 51,261 42,544
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Interest expense:
NOW and money market demand 792 415 2,029 1,740
Savings 706 477 2,189 1,940
Certificates of deposit 5,276 3,048 15,020 12,405
Advances from FHLB - Seattle and other borrowed funds 2,849 2,108 9,169 8,652
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Total interest expense 9,623 6,048 28,407 24,737
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Net interest income 7,832 4,637 22,854 17,807
Provision for loan losses 297 -- 400 --
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Net interest income after provision for loan losses 7,535 4,637 22,454 17,807
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Non-interest income:
Loan origination fees 323 99 667 348
Service fees 1,143 556 3,035 2,120
Net gain on sale of loans and securities available-for-sale 278 37 678 577
Other 184 68 306 267
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Total non-interest income 1,928 760 4,686 3,312
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Non-interest expenses:
Compensation and employee benefits 3,393 1,907 9,344 7,523
Net occupancy expense of premises 540 215 1,374 880
Equipment and furnishings expense 388 181 1,009 643
Data processing expenses 388 151 962 632
Federal insurance premium 92 203 517 806
SAIF special assessment -- -- 2,297 --
Intangibles amortization 409 -- 532 --
Marketing and advertising 210 170 571 559
Other 1,362 876 3,964 2,961
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Total non-interest expense 6,782 3,703 20,570 14,004
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Income before income taxes 2,681 1,694 6,570 7,115
Income taxes 542 466 2,063 2,556
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Net income $ 2,139 $ 1,228 $ 4,507 $ 4,559
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Net income per share $ 0.38 $ 0.29 $ 0.90 $ 1.07
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Dividends per share $ 0.151 $ 0.123 $ 0.451 $ 0.363
========== ========== ========== ==========
Dividend payout ratio 39.66% 42.55% 50.11% 33.91%
========== ========== ========== ==========
Weighted average common shares outstanding for earnings per share 5,618,249 4,247,996 4,711,551 4,259,109
========== ========== ========== ==========
</TABLE>
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Selected Financial Ratios and Other Data:
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
June 30, June 30,
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1997 1996 1997 1996
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<S> <C> <C> <C> <C>
Performance Ratios:
Return on assets (ratio of net income to average total assets) (1) 0.90% 0.86% 0.65% 0.79%
Return on assets before SAIF special assessment (1) 0.90 0.86 0.86 0.79
Return on equity (ratio of net income to average equity) (1) 8.23 6.25 5.15 5.90
Return on equity before SAIF special assessment (1) 8.23 6.25 6.68 5.90
Interest rate spread information:
Average during period 3.31 2.78 3.06 2.62
End of period 3.38 2.67 3.38 2.67
Net interest margin (1) (2) 3.60 3.39 3.53 3.23
Ratio of non-interest expense to average total assets (1) 2.86 2.58 2.98 2.43
Ratio of non-interest expense without SAIF special assessment
to average total assets (1) 2.86 2.58 2.64 2.43
Asset Quality Ratios:
Non-performing assets to total assets, at end of period 0.25 0.13 0.25 0.13
Total allowance for loan losses to total non-performing
assets (3) 191.01 280.42 191.01 280.42
Capital Ratios:
Stockholders' equity to total assets, at end of period 10.91 13.94 10.91 13.94
Tangible stockholders' equity to tangible assets, at end of period 8.92 13.94 8.92 13.94
Average equity to average assets 10.98 13.71 12.65 13.42
Ratio of average interest-earning assets to average
interest-bearing liabilities 106.36 113.73 110.57 113.58
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(1) Annualized
(2) Net interest income divided by average interest-earning assets
(3) Includes non-performing and foreclosed assets
