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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)
April 25, 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 April 25, 1997, the Registrant issued the press
release attached as Exhibit 99.6.
Item 7. Financial Statements and Exhibits
(a) Exhibits
99.6 Press release, dated April 25, 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: April 28, 1997 By: /s/ Lyle R. Grimes
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Lyle R. Grimes
Chairman of the Board
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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99.6 Press Release dated April 25, 1997 5
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WESTERFED FINANCIAL CORPORATION ANNOUNCES
THIRD QUARTER EARNINGS AND
INCREASED QUARTERLY DIVIDEND
Missoula, Montana -- April 25, 1997 -- WesterFed Financial Corporation (the
"Company") (NASDAQ - WSTR), the holding company for Western Federal Savings Bank
of Montana (the "Bank"), announced earnings for the third quarter ended March
31, 1997 of $1.2 million, or $0.25 per share, as compared to $0.26 per share for
the same period last year. Earnings for the quarter ended March 31, 1997
included after-tax charges of $165,000, or $0.03 per share, for charges incurred
by the Company in connection with the acquisition of Security Bancorp of
Billings, Montana on February 28, 1997. The earnings for the nine month period
ended March 31, 1997 were $2.4 million, or $0.52 per share, as compared to
earnings of $3.3 million, or $0.78 per share, for the same period last year. The
earnings for the nine month period ended March 31, 1997 include a one time
after-tax charge to earnings of $1.4 million, or $0.32 per share, for a special
assessment to recapitalize the Savings Association Insurance Fund ("SAIF").
The Company also announced it will pay a cash dividend of $0.105 per share
for the quarter ended March 31, 1997. The dividend will be payable on May 21,
1997 to stockholders of record on May 7, 1997. The quarterly cash dividend was
increased 5.0% over the prior quarter's regular cash dividend of $0.10 per
share. The Company has increased regular cash dividends every quarter since
becoming a public company.
President and Chief Executive Officer Lyle R. Grimes stated, "We are
excited that the acquisition of Security Bancorp has been closed, allowing us to
fulfill our business strategy of adding commercial banking to our operations. At
March 31, 1997, we had $58.2 million of commercial loans and $25.3 million of
agricultural loans. We had no commercial or agricultural loans prior to the
acquisition."
As a result of the acquisition, total assets increased to $932.4 million at
March 31, 1997 as compared to $563.9 million at June 30, 1996. Total loans
increased to $597.2 million at March 31, 1997 as compared to $368.2 million at
June 30, 1996 and total deposits increased
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to $634.4 million at March 31, 1997 as compared to $350.2 million at June 30,
1996. Total stockholders' equity increased to $102.4 million, or 11.0% of assets
and tangible stockholders' equity was $80.9 million, or 8.9% of tangible assets
at March 31, 1997.
Net income increased to $1.2 million for the quarter ended March 31, 1997
from $1.1 million for the same period last year. The earnings for the quarter
just ended include one month of earnings from the acquisition of Security
Bancorp, which was completed February 28, 1997, and include after-tax charges of
$165,000 for costs related to the acquisition. The interest rate spread
increased as a result of the acquisition to 3.38% at March 31, 1997 as compared
to 2.65% at the end of the prior quarter.
Non-performing assets totaled $2.0 million at March 31, 1997, up from $1.4
million at December 31, 1996, due primarily to the acquisition, and up from
$715,000 at June 30, 1996. However, non-performing assets as a percentage of
total assets decreased to 0.22% at March 31, 1997 from 0.25% at December 31,
1996, but increased from 0.13% at June 30, 1996. The ratio of allowance for loan
losses to non-performing assets increased to 222.9% at March 31, 1997 as
compared to 139.9% at December 31, 1996 and 280.4% at June 30, 1996. Loan loss
reserves were $4.5 million at March 31, 1997 as compared to $2.0 million at June
30, 1996. The Company had no real estate owned at March 31, 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 sixteen 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
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CONSOLIDATED BALANCE SHEETS
WESTERFED FINANCIAL CORPORATION AND SUBSIDIARIES
(Dollars in thousands, except share and per share data)
<TABLE>
<CAPTION>
(Unaudited)
March 31, June 30,
1997 1997
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ASSETS
<S> <C> <C>
Cash and due from banks $ 14,629 $ 7,829
Interest-bearing due from banks 10,209 5,470
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Cash and cash equivalents 24,838 13,299
Interest-bearing deposits 3,350 3,000
Investment securities available-for-sale 32,221 35,637
Investment securities, at amortized cost (estimated market value
of $23,446 at March 31, 1997 and $9,399 at June 30, 1996) 23,470 9,347
Stock in Federal Home Loan Bank of Seattle, at cost 11,246 7,471
Mortgage-backed securities available-for-sale 59,325 44,909
Mortgage-backed securities, at amortized cost (estimated market value
of $114,588 at March 31, 1997 and $59,278 at June 30, 1996) 114,740 60,038
Loans available-for-sale 1,046 3,967
Loans receivable, net 596,111 364,226
Accrued interest receivable 6,686 3,695
Premises and equipment, net 28,892 13,758
Core deposit intangible 6,717 --
Goodwill 14,782 --
Cash surrender value of life insurance policies 6,048 3,183
Other assets 2,968 1,401
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Total assets $ 932,440 $ 563,931
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 634,404 $ 350,212
Borrowed funds 168,869 125,838
Advances from borrowers for taxes and insurance 7,058 3,255
Income taxes 4,559 1,961
Accrued interest payable 3,272 1,219
Accrued expenses and other liabilities 11,914 2,839
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Total liabilities 830,076 485,324
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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;
5,551,172 shares outstanding at March 31, 1997, and
4,395,204 outstanding at June 30, 1996 58 46
Additional paid-in capital 67,595 45,451
Common stock acquired by ESOP/RRP (3,032) (3,558)
Treasury stock, at cost (3,080) (3,079)
Net unrealized gain on securities available-for-sale (155) (226)
Retained earnings, substantially restricted 40,978 39,973
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Total stockholders' equity 102,364 78,607
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Total liabilities and stockholders' equity $ 932,440 $ 563,931
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Book value per share $ 18.44 $ 17.88
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Book value per share - tangible $ 14.57 $ 17.88
========= =========
</TABLE>
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CONSOLIDATED STATEMENTS OF INCOME
WESTERFED FINANCIAL CORPORATION AND SUBSIDIARIES
(Dollars in thousands, except share and per share data)
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
1997 1996 1997 1996
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Interest income:
<S> <C> <C> <C> <C>
Loans receivable $ 9,288 $ 7,359 $ 24,832 $ 21,034
Mortgage-backed securities available-for-sale 748 1,157 2,145 3,332
Mortgage-backed securities 1,308 1,191 3,346 3,824
Investment securities available-for-sale 694 646 2,141 2,264
Investment securities 134 211 348 698
Interest-bearing deposits 357 163 846 572
Other 56 46 148 135
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Total interest income 12,585 10,773 33,806 31,859
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Interest expense:
NOW and money market demand 488 438 1,237 1,326
Savings 545 478 1,484 1,463
Certificates of deposit 3,771 3,157 9,774 9,356
Advances from FHLB - Seattle and other borrowed funds 2,125 2,196 6,289 6,544
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Total interest expense 6,929 6,269 18,784 18,689
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Net interest income 5,656 4,504 15,022 13,170
Provision for loan losses 61 -- 103 --
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Net interest income after provision for loan losses 5,595 4,504 14,919 13,170
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Non-interest income:
Loan origination fees 121 47 345 250
Service fees 761 516 1,891 1,563
Net gain on sale of loans and securities available-for-sale 86 91 400 540
Other 52 121 122 199
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Total non-interest income 1,020 775 2,758 2,552
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Non-interest expenses:
Compensation and employee benefits 2,357 1,986 5,951 5,616
Net occupancy expense of premises 356 237 834 664
Equipment and furnishings expense 257 179 622 462
Data processing expenses 241 173 574 481
Federal insurance premium 60 203 425 603
SAIF special assessment -- -- 2,297 --
Intangibles amortization 123 -- 123 --
Marketing and advertising 129 65 361 389
Other 1,083 615 2,601 2,086
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Total non-interest expense 4,606 3,458 13,788 10,301
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Income before income taxes 2,009 1,821 3,889 5,421
Income taxes 814 703 1,521 2,090
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Net income $ 1,195 $ 1,118 $ 2,368 $ 3,331
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Net income per share $ 0.25 $ 0.26 $ 0.52 $ 0.78
========== ========== ========== ==========
Dividends per share $ 0.105 $ 0.085 $ 0.300 0.240
========== ========== ========== ==========
Dividend payout ratio 42.00% 32.69% 57.69% 30.77%
========== ========== ========== ==========
Weighted average common shares outstanding for earnings per share 4,736,356 4,266,927 4,396,293 4,262,021
========== ========== ========== ==========
</TABLE>
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Selected Financial Ratios and Other Data:
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
1997 1996 1997 1996
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Performance Ratios:
<S> <C> <C> <C> <C>
Return on assets (ratio of net income to average total assets) (1) 0.70% 0.77% 0.52% 0.77%
Return on assets before SAIF special assessment (1) 0.70 0.77 0.83 0.77
Return on equity (ratio of net income to average equity) (1) 5.46 5.73 3.85 5.78
Return on equity before SAIF special assessment (1) 5.46 5.73 6.07 5.78
Interest rate spread information:
Average during period 3.07 2.62 2.93 2.57
End of period 3.38 2.54 3.38 2.54
Net interest margin (1) (2) 3.54 3.22 3.49 3.18
Ratio of non-interest expense to average total assets (1) 2.70 2.37 3.03 2.38
Ratio of non-interest expense without SAIF special assessment
to average total assets (1) 2.70 2.37 2.53 2.38
Asset Quality Ratios:
Non-performing assets to total assets, at end of period 0.22 0.07 0.22 0.07
Total allowance for loan losses to total non-performing
assets (3) 222.91 468.93 222.91 468.93
Capital Ratios:
Stockholders' equity to total assets, at end of period 10.98 13.28 10.98 13.28
Tangible stockholders' equity to tangible assets, at end of period 8.88 13.28 8.88 13.28
Average equity to average assets 12.83 13.38 13.52 13.33
Ratio of average interest-earning assets to average
interest-bearing liabilities 110.73 113.39 112.82 113.53
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(1) Annualized
(2) Net interest income divided by average interest-earning assets
(3) Includes non-performing and foreclosed assets
