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Previous: ALLEGHANY FUNDS, 497, 1998-10-26 |
Next: TOWER TECH INC, 10QSB/A, 1998-10-26 |
<PAGE>
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)
October 20, 1998
WESTERFED FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Delaware 0-22772 81-0487794
- --------------------------------------------------------------------------------
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification
incorporation) Number)
110 East Broadway, Missoula, Montana 59802
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (406) 721-5254
- --------------------------------------------------------------------------------
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
On October 20, 1998 the Registrant issued the press
releases attached as Exhibit 99.6.
Item 7. Financial Statements and Exhibits
(a) Exhibits
99.6 Press releases, dated October 20, 1998
<PAGE>
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: October 21, 1998 By: /s/ Lyle R. Grimes
------------------------------- -----------------------------------
Lyle R. Grimes
President/Chief Executive Officer
<PAGE>
Index to Exhibits
Sequentially
Numbered Page
Where Attached
Exhibit Exhibits
Number are located
------ ------------
99.6 Press Releases dated October 20, 1998 5
<PAGE>
WESTERFED FINANCIAL CORPORATION ANNOUNCES
FIRST QUARTER EARNINGS
Missoula, Montana - October 20, 1998 - WesterFed Financial Corporation
(the "Company") (NASDAQ - WSTR), the holding company for Western Security Bank
(the "Bank"), announced earnings for the first quarter ended September 30, 1998
of $1.8 million, or $0.31 per share diluted, as compared to $1.8 million, or
$0.32 per share diluted, for the same period last year.
The Company also announced it will pay a regular cash dividend of
$0.135 per share for the quarter ended September 30, 1998 payable on November
24, 1998 to stockholders of record on November 10, 1998. The regular quarterly
cash dividend of $0.135 was increased 3.8% over the prior quarter's regular cash
dividend of $0.13 per share. The Company has increased regular cash dividends
every quarter since becoming a public company.
President/Chief Executive Officer Lyle R. Grimes stated, "Although the
interest rate spread increased to 3.07% at September 30, 1998 from 2.99% at June
30, 1998, net interest income after loan loss provisions decreased $220,000 to
$7.6 million for quarter ending September 30, 1998 from $7.8 million at June 30,
1998. The decrease was primarily due to an increase in loan loss provisions of
$30,000 in this quarter to $240,000 from $210,000 in quarter ended June 30, 1998
and a decrease in interest earning assets. The current low interest rates
encourage homeowners to refinance into longer term fixed rate loans. Because of
the interest rate risk incurred with long term lending in the current low rate
environment, such originations (generally thirty year) are being sold to the
secondary market so that one- to four-family loans decreased by $13.2 million
during this quarter. In addition, increased prepayments on mortgage-backed
securities and investment securities resulted in an additional decrease of $17.0
million in these securities. Once again, with the current low interest rate
environment, management has decided not to reinvest these proceeds at this time
and instead used the proceeds to pay down borrowed funds by $29.2 million. Even
though the total loan portfolio decreased $4.7 million as a result of the
decrease in the one- to four-family loans, we are pleased that higher yielding
consumer and commercial loans increased $8.5 million during the quarter,
allowing the Bank to maintain it's interest rate spread."
Total assets decreased $22.5 million to $999.6 million at September
30, 1998 as compared to $1.022 billion at June 30, 1998. Total loans decreased
$4.7 million to $652.6 million at September 30, 1998 as compared to $657.3
million at June 30, 1998. Mortgage-backed securities decreased $7.6 million to
$118.8 at September 30, 1998 from $126.4 million at June 30, 1998 and investment
securities, Federal Home Loan Bank stock and all
<PAGE>
other interest earning assets decreased $9.4 million to $146.0 million at
September 30, 1998 from $155.4 million at June 30, 1998. These decreases in
assets were partially offset by a decrease in borrowed funds of $29.2 million to
$219.8 million at September 30, 1998 as compared to $249.0 million at June 30,
1998. Total stockholders' equity increased $1.7 million to $111.4 million at
September 30, 1998, or 11.2% of assets, from $109.7 million at June 30, 1998.
Net income was $1.8 million for the quarter ended September 30, 1998,
unchanged from the $1.8 million earned during the same period last year. Net
interest income before provision for loan losses for the quarter ended September
30, 1998 was $7.9 million, a decrease of $100,000 from the same period last
year. This was primarily the result of the net interest margin decreasing to
3.40% during the quarter ended September 30, 1998 from 3.50% during the same
period last year. Total non-interest income increased $300,000 to $2.3 million
during the quarter ended September 30, 1998 from $2.0 million during the same
period last year.
Non-interest expenses and income taxes increased $100,000 and $85,000
to $7.0 million and $1.2 million respectively, for the quarter ended September
30, 1998 from $6.9 million and $1.1 million, respectively, during the same
period last year.
Non-performing assets totaled $5.2 million at September 30, 1998, up
$200,000 from $5.0 million at June 30, 1998, due primarily to an increase of
$309,000 in non-performing loans secured by savings deposits. Nonperforming
assets as a percentage of total assets increased to 0.52% at September 30, 1998
from 0.49% at June 30, 1998 as assets decreased $22.5 million during the
quarter. The 0.52% is substantially less than the national composite for thrifts
of 0.87% at June 30, 1998, which is the latest available information as reported
by the Office of Thrift Supervision. The ratio of allowance for loan losses to
non-performing assets decreased to 94.24% at September 30, 1998 as compared to
97.44% at June 30, 1998. The Company had $521,000 of real estate owned at
September 30, 1998.
WesterFed Financial Corporation's only subsidiary, Western Security
Bank, Montana's largest savings bank, operates thirty-four offices in twenty
Montana communities.
CONTACT: Dale W. Brevik, Vice President/Marketing
James A. Salisbury, Treasurer/Chief Financial Officer
(406) 721-5254
<PAGE>
CONSOLIDATED BALANCE SHEETS
WESTERFED FINANCIAL CORPORATION AND SUBSIDIARIES
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
(Unaudited)
September 30, June 30,
1998 1998
----------- -----------
<S> <C> <C>
ASSETS
Cash and due from banks $ 18,504 $ 19,440
Interest-bearing due from banks 10,174 9,628
----------- -----------
Cash and cash equivalents 28,678 29,068
Interest-bearing deposits -- 100
Investment securities available-for-sale 102,957 108,511
Investment securities, at amortized cost (estimated market value
of $12,439 at Sept. 30, 1998 and $16,974 at June 30, 1998) 12,254 16,847
Stock in Federal Home Loan Bank of Seattle, at cost 13,817 13,560
Mortgage-backed securities available-for-sale 21,612 24,135
Mortgage-backed securities, at amortized cost (estimated market value
of $100,486 at Sept. 30, 1998 and $104,962 at June 30, 1998) 97,161 102,298
Loans available-for-sale 6,250 6,922
Loans receivable, net 646,327 650,371
Accrued interest receivable 8,849 7,778
Premises and equipment, net 29,809 30,089
Core deposit intangible 4,312 4,518
Goodwill 15,596 15,762
Cash surrender value of life insurance policies 6,776 6,705
Other assets 5,197 5,472
----------- -----------
Total assets $ 999,595 $ 1,022,136
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 636,599 $ 636,441
Repurchase agreements 7,210 6,233
Borrowed funds 219,779 248,953
Advances from borrowers for taxes and insurance 7,260 4,052
Income taxes - current and deferred 3,620 2,289
Accrued interest payable 4,936 4,480
Accrued expenses and other liabilities 8,745 9,988
----------- -----------
Total liabilities 888,149 912,436
----------- -----------
Stockholders' Equity:
Preferred stock, $.01 par value, 5,000,000 shares authorized;
none outstanding -- --
Common stock, $.01 par value, 10,000,000 shares authorized;
5,588,862 shares outstanding at Sept. 30, 1998, and
5,585,303 outstanding at June 30, 1998 56 56
Paid-in capital 69,052 68,923
Common stock acquired by ESOP/RRP (2,391) (2,520)
Treasury stock, at cost (3,461) (3,461)
Net unrealized gain on securities available-for-sale 484 23
Retained earnings 47,706 46,679
----------- -----------
Total stockholders' equity 111,446 109,700
----------- -----------
Total liabilities and stockholders' equity $ 999,595 $ 1,022,136
=========== ===========
Book value per share $ 19.94 $ 19.64
=========== ===========
Tangible book value per share $ 16.38 $ 16.01
=========== ===========
</TABLE>
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
WESTERFED FINANCIAL CORPORATION AND SUBSIDIARIES
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
(Unaudited)
Three Months Ended
September 30,
1998 1997
---------- ----------
<S> <C> <C>
Interest income:
Loans receivable $ 14,066 $ 13,807
Mortgage-backed securities available-for-sale 355 579
Mortgage-backed securities 1,706 1,990
Investment securities available-for-sale 1,869 1,218
Investment securities 257 515
Interest-bearing deposits 87 143
Other 80 77
---------- ----------
Total interest income 18,420 18,329
---------- ----------
Interest expense:
NOW and money market demand 881 817
Savings 621 690
Certificates of deposit 5,425 5,391
Advances from FHLB - Seattle and other borrowed funds 3,638 3,434
---------- ----------
Total interest expense 10,565 10,332
---------- ----------
Net interest income 7,855 7,997
Provision for loan losses 240 164
---------- ----------
Net interest income after provision for loan losses 7,615 7,833
---------- ----------
Non-interest income:
Loan origination fees 687 529
Service fees 1,212 1,125
Net gain on sale of loans and securities available-for-sale 256 221
Other 172 88
---------- ----------
Total non-interest income 2,327 1,963
---------- ----------
Non-interest expenses:
Compensation and employee benefits 3,357 3,469
Net occupancy expense of premises 516 532
Equipment and furnishings expense 553 389
Data processing expense 413 380
Federal insurance premium 88 90
Intangibles amortization 373 331
Marketing and advertising 154 257
Other 1,515 1,405
---------- ----------
Total non-interest expense 6,969 6,853
---------- ----------
Income before income taxes 2,973 2,943
Income taxes 1,219 1,134
---------- ----------
Net income $ 1,754 $ 1,809
========== ==========
Net income per share:
Basic $ 0.33 $ 0.34
========== ==========
Diluted $ 0.31 $ 0.32
========== ==========
Dividends per share $ 0.135 $ 0.115
========== ==========
Dividend payout ratio - diluted 43.55% 35.94%
========== ==========
Average common and common equivalent shares outstanding:
Basic 5,371,863 5,284,967
========== ==========
Diluted 5,676,569 5,593,069
========== ==========
</TABLE>
<PAGE>
Selected Financial Ratios and Other Data:
<TABLE>
<CAPTION>
(Unaudited)
Three Months Ended
September 30,
-----------------------------------
1998 1997
--------------- ----------------
<S> <C> <C>
Performance Ratios:
Return on assets (ratio of net income to average total assets) (1) 0.70% 0.73 %
Return on equity (ratio of net income to average equity) (1) 6.32 6.84
Interest rate spread information:
Average during period 3.12 3.23
End of period 3.07 3.15
Net interest margin (1) (2) 3.40 3.50
Ratio of non-interest expense to average total assets (1) 2.77 2.75
Asset Quality Ratios:
Non-performing assets to total assets, at end of period 0.52 0.41
Total allowance for loan losses to total non-performing
assets (3) 94.24 116.74
Capital Ratios:
Stockholders' equity to total assets, at end of period 11.15 10.62
Tangible stockholders' equity to tangible assets, at end of period 9.34 8.75
Ratio of average interest-earning assets to average
interest-bearing liabilities 106.07 106.03
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annualized
(2) Net interest income divided by average interest-earning assets
(3) Includes non-performing and foreclosed assets
<PAGE>
WESTERFED FINANCIAL CORPORATION
<TABLE>
<CAPTION>
(Unaudited)
------------------------------------------------------------------
SEPTEMBER 30, 1998 - QTD SEPTEMBER 30, 1997 - QTD
------------------------------ ------------------------------
Average Interest Average Interest
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance (5) Paid Rate Balance (5) Paid Rate
------------------------------ ------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTEREST EARNING ASSETS: (Dollars in Thousands)
Loans receivable (1) (2) $657,497 $14,066 8.56% $648,412 $13,806 8.52%
Mortgage-backed securities (2) 121,277 2,061 6.80% 151,127 2,569 6.80%
Investments (2) 132,634 2,126 6.41% 99,786 1,734 6.95%
Other interest-earning assets (3) 5,084 87 6.85% 8,876 143 6.44%
Cash surrender value of life insurance 6,753 80 4.74% 6,356 77 4.85%
------------------------------ ------------------------------
Total Interest-Earning Assets 923,245 18,420 7.98% 914,557 18,329 8.02%
============================== ==============================
INTEREST-BEARING LIABILITIES:
Certificates of deposits 378,038 5,425 5.74% 375,705 5,391 5.74%
Savings accounts 91,526 621 2.71% 100,734 690 2.74%
Demand and NOW accounts 109,213 286 1.05% 103,377 318 1.23%
Money market accounts 57,662 595 4.13% 49,925 499 4.00%
------------------------------ ------------------------------
Total deposits 636,439 6,927 4.35% 629,741 6,898 4.38%
FHLB advances and other borrowed money 233,968 3,638 6.22% 232,798 3,434 5.90%
------------------------------ ------------------------------
s
Total Interest-Bearing Liabilities 870,407 10,565 4.86% 862,539 10,332 4.79%
============================== ==============================
Net interest income $7,855 $7,997
========== ===========
Net interest rate spread 3.12% 3.23%
========= ========
Net interest earning assets $52,838 $52,018
=========== ===========
Net interest margin (4) 3.40% 3.50%
========= ========
Average interest-earning assets
to average interest-bearing liabilities 106.07% 106.03%
========== ===========
</TABLE>
(1) Calculated net of deferred loan fees, loan
discounts, loans in process and loss reserves
(2) Includes held and available for sale categories
(3) Includes primarily short term liquid assets
(4) Net interest income divided by average interest
earning assets
(5) Based on average monthly balances
<PAGE>
WESTERFED FINANCIAL CORPORATION
Non-Performing Assets
<TABLE>
<CAPTION>
(Unaudited)
September 30, June 30,
1998 1998
- ----------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C>
Non-accruing loans:
Real Estate:
One-to-four family $1,670 $1,967
Multi-family - 89
Nonresidential property (except land) - 35
Construction 227 362
Agriculture - -
Commercial - non real estate 103 32
Consumer 1,552 1,504
- ----------------------------------------------------------------------------------------
Total 3,552 3,989
- ----------------------------------------------------------------------------------------
Accruing loans delinquent 90 days or more:
Real Estate:
One-to-four family 622 442
Multi-family - -
Nonresidential property (except land) - -
Construction - -
Agriculture - -
Commercial - non real estate - 10
Consumer 483 174
- ----------------------------------------------------------------------------------------
Total 1,105 626
- ----------------------------------------------------------------------------------------
Foreclosed assets:
Real Estate:
One-to-four family 302 279
Multi-family - -
Commercial - -
Land 30 28
Construction - -
Consumer 189 114
- ----------------------------------------------------------------------------------------
Total 521 421
- ----------------------------------------------------------------------------------------
Total non-performing assets $5,178 $5,036
========================================================================================
</TABLE>
<PAGE>
WESTERFED FINANCIAL CORPORATION
Allowance for Loan Losses
<TABLE>
<CAPTION>
(Unaudited)
For the Three Month
Period Ended
September 30,
-----------------------------
1998 1997
-----------------------------
(In Thousands)
------- -------
<S> <C> <C>
Balance at beginning of period ............................ $ 4,907 $ 4,651
------- -------
Charge-Offs:
Real Estate:
One- to four-family .................................... -- --
Commerical ............................................. -- --
Other:
Commerical ............................................. (3) --
Consumer ............................................... (286) (81)
------- -------
Total charge-offs ......................................... (289) (81)
------- -------
Recoveries:
Other:
Commerical ............................................. -- --
Consumer ............................................... 22 9
------- -------
Total recoveries .......................................... 22 9
------- -------
Net charge-offs ........................................... (267) (72)
------- -------
Provisions charged to operations .......................... 240 164
Reserves acquired ......................................... -- --
------- -------
Balance at end of period .................................. $ 4,880 $ 4,743
======= =======
Ratio of net charge-offs during the period to average loans
outstanding during the period .......................... 0.04% 0.01%
======= =======
Ratio of net charge-offs during the period to average non-
performing assets during the period .................... 5.23% 2.22%
======= =======
Ratio of allowance for loan losses to net loans before
allowance .............................................. 0.74% 0.72%
======= =======
</TABLE>
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