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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)
January 21, 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 January 21, 1997, the Registrant issued the press release
attached as Exhibit 99.1 announcing fourth quarter and year end
earnings and a cash dividend.
Item 7. Financial Statements and Exhibits
(a) Exhibits
99.1 Press release, dated January 21, 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: January 21, 1997 By: Lyle R. Grimes
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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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99.1 Press Release dated January 21, 1997 5
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WESTERFED FINANCIAL CORPORATION ANNOUNCES
SECOND QUARTER EARNINGS AND
INCREASED QUARTERLY DIVIDEND
Missoula, Montana -- January 21, 1997 -- WesterFed Financial
Corporation (the "Company") (NASDAQ - WSTR), holding company for Western Federal
Savings Bank of Montana (the "Bank"), announced earnings for the second quarter
ended December 31, 1996 of $1.4 million, or $0.31 per share, an increase of
27.3% from the total earnings of $1.1 million, or $0.27 per share, for the same
quarter ended December 31, 1995. Earnings for the six month period ended
December 31, 1996 were $1.2 million, or $0.27 per share, as compared to earnings
of $2.2 million, or $0.52 per share, for the same six month period ended
December 31, 1995. The earnings for the six month period ended December 31, 1996
include a one time after tax charge to earnings of $1.4 million, or $0.33 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 $0.10 per
share for the quarter ended December 31, 1996. The dividend will be payable on
February 21, 1997 to stockholders of record on February 7, 1997. The quarterly
cash dividend was increased 5.3% over the prior quarter's regular cash dividend
of $0.095 per share. The Company has increased regular cash dividends every
quarter since becoming a public company.
President/Chief Executive Officer Lyle R. Grimes stated, "We are
pleased with the results and direction of the Company for the current fiscal
year. The $0.31 per share for the quarter just ended is the highest quarterly
per share earnings since becoming a public company three years ago this month.
In addition, it is anticipated the acquisition of Security Bancorp of Billings,
Montana soon will be completed and is expected to help WesterFed Financial
Corporation fulfill its business strategy of adding commercial banking to its
operations."
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Total assets decreased slightly to $563.6 million at December 31, 1996
from $563.9 million at June 30, 1996. Total loans decreased $1.7 million to
$366.5 million at December 31, 1996 from $368.2 million at June 30, 1996. Real
estate mortgage loans decreased $16.8 million while consumer loans increased
$15.1 million. Real estate loan originations declined to $45.0 million during
the six month period ended December 31, 1996 from $74.6 million for the same
period last year primarily due to a decline in refinancing activity, a slowdown
in new construction and home sales and increased mortgage lending competition.
In addition, $30.7 million of long term fixed rate mortgages were sold on the
secondary market in an effort to reduce interest rate risk. Consumer loan
originations increased to $29.8 million for the six month period ended December
31, 1996 from $13.1 million and for the same period last year due primarily to
the increase in loans originated directly through local auto and recreational
dealers.
Total deposits decreased $6.4 million to $343.8 million at December 31,
1996 from $350.2 million at June 30, 1996 while borrowed funds increased $4.9
million to $130.7 million at December 31, 1996 from $125.8 million at June 30,
1996.
Net income increased to $1.4 million for the quarter ended December 31,
1996 from $1.1 million for the same period last year. The increase was primarily
the result of net interest income and non-interest income increasing $278,000
and $215,000 respectively, partially offset by increases in non-interest expense
and income tax expense of $207,000 and $79,000 respectively. The net interest
margin (net interest income divided by average interest-earning assets)
increased to 3.50% during the quarter ended December 31, 1996 from 3.39% and
3.18% during the quarters ended June 30, 1996 and December 31, 1995
respectively.
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Total non-performing assets as a percentage of total assets
increased to 0.25% at December 31, 1996 from 0.13% at June 30, 1996. This
compares to 1.19% at September 30, 1996 for the national average for savings
institutions regulated by the Office of Thrift Supervision. This increase was
primarily the result of a $376,000 increase in non-performing consumer loans and
a $199,000 increase in non-performing commercial real estate loans. The $376,000
increase in non-performing consumer loans includes $309,000 of real-estate
secured loans. The ratio of allowance for loan losses to non-performing loans
remains a strong 142.8%.
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 -
o 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.
o The per share earnings were previously reported at $0.25 per share for the
quarter ended December 31, 1995.
o 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)
<TABLE>
<CAPTION>
(Unaudited)
December 31, June 30,
1996 1996
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<S> <C> <C>
ASSETS
Cash and due from banks $ 8,300 $ 7,829
Interest-bearing due from banks 16,108 5,470
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Cash and cash equivalents 24,408 13,299
Interest-bearing deposits 190 3,000
Investment securities available-for-sale 47,892 35,637
Investment securities, at amortized cost
(estimated market value of $1,854 at
Dec. 31, 1996 and $9,399 at June 30, 1996) 1,852 9,347
Stock in Federal Home Loan Bank, at cost 7,775 7,471
Mortgage-backed securities available-for-sale 35,475 44,909
Mortgage-backed securities, at amortized
cost (estimated market value of $56,594 at
Dec. 31, 1996 and $59,278 at June 30, 1996) 56,129 60,038
Loans available-for-sale 1,156 3,967
Loans receivable, net 365,309 364,226
Accrued interest receivable 3,691 3,695
Premises and equipment, net 14,411 13,758
Cash surrender value of life insurance
policies 3,258 3,183
Other assets 2,071 1,401
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Total assets $ 563,617 $ 563,931
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 343,842 $ 350,212
Borrowed funds 130,712 125,838
Advances from borrowers for taxes
and insurance 2,848 3,255
Income taxes 2,719 1,961
Accrued interest payable 1,217 1,219
Accrued expenses and other liabilities 2,773 2,839
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Total liabilities 484,111 485,324
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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-
4,397,156 shares outstanding at
Dec. 31, 1996 and 4,395,204 shares
outstanding at June 30, 1996 46 46
Additional paid-in capital 45,499 45,451
Common stock acquired by ESOP/RRP (3,155) (3,558)
Treasury stock, at cost (3,080) (3,079)
Net unrealized gain on securities
available-for-sale (144) (226)
Retained earnings, substantially restricted 40,340 39,973
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Total stockholders' equity 79,506 78,607
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Total liabilities and stockholders'
equity $ 563,617 $ 563,931
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Book value per share $ 18.08 $ 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>
(Unaudited) (Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
1996 1995 1996 1995
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<S> <C> <C> <C> <C>
Interest Income:
Loans receivable $ 7,834 $ 7,051 $ 15,544 $ 13,674
Mortgage-backed securities available-for-sale 668 1,160 1,396 2,175
Mortgage-backed securities 1,001 1,265 2,038 2,633
Investment securities available-for-sale 757 759 1,448 1,618
Investment securities 61 255 214 487
Interest-bearing deposits 261 144 489 409
Other 46 46 92 90
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Total interest income 10,628 10,680 21,221 21,086
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Interest expense:
NOW and money market demand 367 442 749 888
Savings 465 491 939 985
Certificates of deposit 2,994 3,055 6,003 6,030
Advances from FHLB-Seattle and other borrowed funds 2,079 2,274 4,164 4,517
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Total interest expense 5,905 6,262 11,855 12,420
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Net interest income 4,723 4,418 9,366 8,666
Provision for loan losses 27 -- 42 --
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Net interest income after provision for loan losses 4,696 4,418 9,324 8,666
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Non-interest income:
Loan origination fees 98 70 223 203
Service fees 565 538 1,131 1,047
Net gain on sale of loans
and securities available-for-sale 205 38 314 449
Other 35 42 70 78
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Total non-interest income 903 688 1,738 1,777
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Non-interest expenses:
Compensation and employee benefits 1,706 1,745 3,593 3,630
Net occupancy expense of premises 256 214 478 427
Equipment and furnishings expense 173 145 364 283
Data processing expenses 168 158 333 308
Federal insurance premium 155 199 366 400
SAIF special assessment -- -- 2,297 --
Marketing and advertising 196 179 232 324
Net expense (income) from operation of real estate owned 2 -- 2 --
Other 795 604 1,517 1,471
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Total non-interest expense 3,451 3,244 9,182 6,843
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(Loss) income before income taxes 2,148 1,862 1,880 3,600
Income taxes (796) (717) (707) (1,388)
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Net (loss) income $ 1,352 $ 1,145 $ 1,173 2,212
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Net (loss) income per share $ 0.31 $ 0.27 $ 0.27 $ 0.52
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Dividends per share $ 0.100 $ 0.080 $ 0.195 $ 0.155
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Dividend payout ratio 32.26% 29.63% 72.22% 29.81%
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Weighted average common shares outstanding for earnings per share 4,309,470 4,265,158 4,278,233 4,259,582
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</TABLE>
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Selected Financial Ratios and Other Data:
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
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1996 1995 1996 1995
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<S> <C> <C> <C> <C>
Performance Ratios:
Return on assets (ratio of net income to average total assets)(1) 0.95% 0.79% 0.41% 0.77%
Return on assets before SAIF special assessment(1) 0.95 0.79 0.91 0.77
Return on equity (ratio of net income to average equity)(1) 6.83 5.95 2.97 5.80
Return on equity before SAIF special assessment(1) 6.83 5.95 6.47 5.80
Interest rate spread information:
Average during period 2.88 2.56 2.85 2.54
End of period 2.65 2.45 2.65 2.45
Net interest margin(1)(2) 3.50 3.18 3.47 3.15
Ratio of non-interest expense to avg. total assets(1) 2.44 2.24 3.24 2.39
Ratio of non-interest expense without SAIF special assessment
to avg. total assest(1) 2.44 2.24 2.42 2.39
Asset Quality Ratios:
Non-performing assets to total assets, at end of period 0.25 0.04 0.25 0.04
Total allowance for loan losses to total non-performing
assets (3) 139.93 917.81 139.93 917.81
Capital Ratios:
Stockholders' equity to total assets, at end of period 14.11 13.20 14.11 13.20
Average equity to average assets 13.96 13.27 13.94 13.30
Ratio of average interest-earning assets to average
interest-bearing liabilities 114.37 113.78 114.10 113.61
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(1) Annualized
(2) Net interest income divided by average interest-earning assets
(3) Includes non-performing and foreclosed assets
