-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KcF0uwn+kL1nZSty05xq8Kwy7H+dSbbz5PlZMquUWnjBoa0mkUxDu16IBsxFDeKQ oBPeU+3KIZo1rcGj0yk2jQ== 0000042293-96-000006.txt : 19961018 0000042293-96-000006.hdr.sgml : 19961018 ACCESSION NUMBER: 0000042293-96-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961017 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961017 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOLDEN WEST FINANCIAL CORP /DE/ CENTRAL INDEX KEY: 0000042293 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 952080059 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04629 FILM NUMBER: 96644592 BUSINESS ADDRESS: STREET 1: 1901 HARRISON STREET CITY: OAKLAND STATE: CA ZIP: 94612 BUSINESS PHONE: 5104663420 MAIL ADDRESS: STREET 2: 1901 HARRISON STREET CITY: OAKLAND STATE: CA ZIP: 94612 FORMER COMPANY: FORMER CONFORMED NAME: TRANS WORLD FINANCIAL CORP DATE OF NAME CHANGE: 19760806 FORMER COMPANY: FORMER CONFORMED NAME: TRANS WORLD FINANCIAL CO DATE OF NAME CHANGE: 19751124 8-K 1 GOLDEN WEST, LIVE 8-K FILING SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 October 17, 1996 ------------------------------------------------- (Date of earliest event reported) Golden West Financial Corporation ------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 1-4629 95-2080059 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 1901 Harrison Street, Oakland, California 94612 - ------------------------------------------- -------------------------- (Address of principal executive offices) (Zip Code) (510) 446-3420 - ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Item 5. Other Events. ------------ Attached hereto as Exhibit 99 is a copy of Golden West Financial Corporation's press release dated October 17, 1996. Item 7. Financial Statements, Pro Forms ------------------------------- Financial Statements and Exhibits. --------------------------------- (a) Financial Statements of Business Acquired Not applicable. (b) Pro Forma Financial Information Not applicable. (c) Exhibits Exhibit Number Description 99 Golden West Financial Corporation's press release dated October 17, 1996. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GOLDEN WEST FINANCIAL CORPORATION /s/ J. L. Helvey Dated: October 17, 1996 ------------------------------------- J. L. Helvey Executive Vice President (duly authorized and principal financial officer) EX-99 2 GOLDEN WEST SEPTEMBER 30, 1996, PRESS RELEASE FOR FURTHER INFORMATION CONTACT: FOR IMMEDIATE RELEASE J. L. Helvey, Executive Vice President Telephone: (510) 446-3405 October 17, 1996 NONRECURRING ITEMS DOMINATE GOLDEN WEST EARNINGS THIRD QUARTER LOAN VOLUME SETS RECORD OAKLAND, CALIFORNIA: Golden West Financial Corporation, parent of World Savings, today announced that third quarter and nine-month earnings for 1996 were significantly influenced by three nonrecurring items: the federally mandated recapitalization of the Savings Association Insurance Fund (SAIF), the recognition of tax benefits associated with an acquisition made several years ago, and the Company's adoption of Statement of Financial Accounting Standards (SFAS) No. 72 pertaining to acquisitions made prior to September 30, 1982. Summarizing the combined impact of these three one-time events, Herbert M. Sandler, Chairman of the Board and Chief Executive Officer of Golden West, said, "When the plusses and minuses are all added up, Golden West's third quarter per share profits amounted to $2.32 while nine month earnings totaled $1.52 per share." Discussing the nonrecurring items in more detail, Sandler first addressed the deposit insurance fund issue, noting, "On September, 30, 1996, Congress passed and President Clinton signed long-awaited federal legislation that recapitalized the Savings Association Insurance Fund. The new banking law requires members to pay a levy of $4.7 billion to bring SAIF up to the required reserve level of 1.25% of insured deposits, but lowers savings and loan deposit insurance premiums starting in 1997." As a result of this legislation, Golden West's subsidiary, World Savings and Loan Association, incurred a one-time charge of $133 million, or $1.34 per share on an after-tax basis, at the end of the third quarter. Beginning on January 1, 1997, the premium paid by the Association for deposit insurance will be reduced from $2.30 per $1,000 in savings balances to $.64 per $1,000. Moving on to the impact of tax benefits, Sandler provided background information, stating, "In December 1988, Golden West entered into a government approved transaction with Beach Federal Savings and Loan Association to provide management services to that institution. As part of the agreement, Golden West obtained an option to take title to the stock of Beach and subsequently exercised this right in July 1991. When Golden West took title to the stock, the Company disclosed that tax benefits were anticipated from operating losses which had been accumulated at Beach's predecessor institution up to the time of the 1988 agreement, although the availability and the amount of these benefits were uncertain." The availability of $139.5 million, or $2.40 per share, of tax benefits was confirmed in the third quarter of 1996. On the matter of the last nonrecurring item, Sandler explained, "In the third quarter of 1996, Golden West adopted, retroactive to January 1, 1996, Statement of Financial Accounting Standards No. 72, `Accounting for Certain Acquisitions of Banking or Thrift Institutions,' pertaining to acquisitions made prior to September 30, 1982." As a result of adopting SFAS 72, the Company wrote-off goodwill totaling $205 million and restated earnings for the first half of 1996. Consequently, first quarter profits of $1.28 per share were reduced to a loss of $2.15 per share, while second quarter per share earnings benefited slightly, increasing from $1.32 to $1.35. Continuing with his discussion of financial results, Sandler stated, "Recognizing that these nonrecurring items make year-over-year net income comparisons difficult, we have also provided earnings figures excluding these one-time events." Without the three items, Golden West's third quarter profits would have totaled $1.23 per share, a 14% increase over the $1.08 per share posted in the same period of 1995; net income for the first nine months of 1996 would have amounted to $3.83 per share, up 34% from the $2.86 per share recorded for the first three quarters of 1995. Completing his discussion of earnings, Sandler commented, "Our recurring profits in 1996 have benefited from a generally wider profit margin than in 1995 and the 8% year-over-year growth of our mortgage portfolio (including mortgage-backed securities), our most important earning asset." Turning to lending results for the three months ended September 30, 1996, Sandler commented, "We are pleased to report that Golden West's mortgage origination team produced a new quarterly record: $2.1 billion of new loans, up 53% from the $1.4 billion recorded in the same period a year ago." The Company's volume for the first nine months of 1996 totaled $5.2 billion, a 14% increase over the $4.6 billion generated in the first three quarters of 1995. Elaborating on Golden West's strong lending performance, Sandler noted, "Third quarter lending operations continued to benefit from favorable market conditions, in particular a strong level of home sales and a positive environment for adjustable rate mortgages (ARMs), our primary product. The latter occurred because traditional fixed home loan rates, which spiked in the spring of 1996, generally remained above 8% while the initial cost of ARMs was very affordable, with most starting rates below 7.5%." Wrapping up with a review of funding sources, Sandler stated, "To support our strong third quarter loan volume we used a combination of retail consumer deposits and wholesale borrowings. On the savings side, we experienced solid growth of $544 million. We supplemented our retail program with borrowings, primarily Federal Home Loan Bank of San Francisco advances, which increased by $984 million during the third quarter 1996." Headquartered in Oakland, California, Golden West is a savings and loan holding company with assets in excess of $37 billion. Currently operating retail deposit gathering offices in seven states under the name of World Savings, Golden West has one of the largest multi-state systems in the country. Golden West's stock is listed on the New York and Pacific Stock Exchanges and traded on the Boston and Midwest Stock Exchanges under the ticker symbol GDW. Options on Golden West's stock are bought and sold on the Philadelphia Options Exchange. # # # (Financial Information Attached) GOLDEN WEST FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF NET EARNINGS AND OTHER FINANCIAL DATA (Unaudited) (Dollars in thousands except per share figures)
Three Months Ended Nine Months Ended September 30 September 30 ---------------------------- ---------------------------- 1996 1995 1996 1995 ------------ ------------ ------------ ------------- Interest Income Interest on loans $ 554,245 $ 540,154 $1,637,733 $1,557,366 Interest on mortgage-backed securities 59,882 54,007 181,416 117,511 Interest and dividends on investments 32,460 37,611 96,723 112,935 ------------ ------------ ------------ ------------- 646,587 631,772 1,915,872 1,787,812 Interest Expense Interest on customer deposits 264,445 274,000 787,727 779,795 Interest on advances 107,803 87,681 289,476 280,087 Interest on repurchase agreements 31,054 25,565 93,408 41,169 Interest on other borrowings 38,338 57,093 124,152 160,596 ------------ ------------ ------------ ------------- 441,640 444,339 1,294,763 1,261,647 ------------ ------------ ------------ ------------- Net Interest Income 204,947 187,433 621,109 526,165 Provision for loan losses 23,498 14,622 59,256 44,052 ------------ ------------ ------------ ------------- Net Interest Income after Provision for Loan Losses 181,449 172,811 561,853 482,113 Non-Interest Income Fees 9,504 7,690 27,872 20,399 Gain (loss) on the sale of securities, mortgage-backed securities, and loans 1,952 (366) 9,783 (344) Other 6,220 3,152 18,371 10,660 ------------ ------------ ------------ ------------- 17,676 10,476 56,026 30,715 Non-Interest Expense General and administrative: Personnel 40,146 37,692 119,273 111,909 Occupancy 12,702 12,431 37,267 36,406 Deposit insurance (a) 140,949 11,602 162,298 33,162 Advertising 1,954 2,166 6,711 7,620 Other 15,531 14,596 46,993 45,918 ------------ ------------ ------------ ------------- 211,282 78,487 372,542 235,015 Amortization of goodwill arising from acquisitions (b) 0 527 0 2,393 ------------ ------------ ------------ ------------- 211,282 79,014 372,542 237,408 ------------ ------------ ------------ ------------- Earnings (Loss) Before Taxes on Income (12,157) 104,273 245,337 275,420 Taxes on income (c) (147,942) 40,892 (48,626) 107,545 ------------ ------------ ------------ ------------- Income Before Cumulative Effect of Change in Accounting for Goodwill 135,785 63,381 293,963 167,875 Cumulative Effect of Change in Accounting for Goodwill (b) 0 0 (205,242) 0 ------------ ------------ ------------ ------------- Net Earnings $ 135,785 $ 63,381 $ 88,721 $ 167,875 ============ ============ ============ ============= Earning Per Share (EPS): EPS Before Cumulative Effect of Change in Accounting for Goodwill $ 2.32 $ 1.08 $ 5.01 $ 2.86 Cumulative Effect of Change in Accounting for Goodwill (b) 0.00 0.00 (3.49) 0.00 ------------ ------------ ------------ ------------- Net earnings per share $ 2.32 $ 1.08 $ 1.52 $ 2.86 ============ ============ ============ ============= Average common shares outstanding 57,584,306 58,681,021 58,216,474 58,637,427 ============ ============ ============ ============= Net loan chargeoffs $ 8,990 $ 10,927 $ 22,890 $ 30,678 ============ ============ ============ =============
September 30 ------------------------------ 1996 1995 ------------ ------------ Yield on loan 7.39% 7.68% portfolio Yield on investments 6.06% 6.05% Yield on earning assets 7.32% 7.58% Cost of deposits 4.95% 5.22% Cost of borrowings 5.85% 6.22% Cost of funds 5.28% 5.57% Yield on earning assets less cost of funds 2.04% 2.01%
(a) The amounts for 1996 reflect the one-time SAIF assessment of $132,587. (b) In September 1996, Golden West Financial Corporation adopted SFAS 72 effective January 1, 1996 for acquisitions prior to September 30, 1982. As a result, the Company wrote-off goodwill totaling $205,242 as the cumulative effect of the change in accounting for goodwill. (c) The amounts for 1996 reflect a tax benefit of $139,485 arising from a prior year acquisition. GOLDEN WEST FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL CONDITION AND OTHER FINANCIAL DATA (Unaudited) (Dollars in thousands except per share figures) September 30 ----------------------------------- 1996 1995 -------------- -------------- Cash $ 130,467 $ 173,994 Securities available for sale 650,927 1,249,736 Other investments 1,350,002 818,730 Mortgage-backed securities available for sale without recourse 237,176 298,221 Mortgage-backed securities available for sale with recourse 220,612 0 Mortgage-backed securities held to maturity without recourse 814,619 917,005 Mortgage-backed securities held to maturity with recourse 2,039,227 1,969,697 Loans receivable 30,278,267 27,951,161 Interest earned but uncollected 218,366 234,442 Investment in capital stock of Federal Home Loan Banks 480,468 346,356 Real estate held for sale or investment 83,074 71,426 Prepaid expenses and other assets 297,917 225,899 Premises and equipment-at cost less accumulated depreciation 210,301 202,674 Goodwill arising from acquisitions (a) 0 138,931 ------------- ------------ $ 37,011,423 $34,598,272 ============= ============ LIABILITIES and STOCKHOLDERS' EQUITY Customer deposits $21,584,365 $20,559,933 Advances from Federal Home Loan Banks 8,159,240 5,976,515 Securities sold under agreements to repurchase 2,227,481 1,865,172 Medium-term notes 689,755 1,864,229 Accounts payable and accrued expenses 593,594 462,041 Taxes on income 163,252 352,232 Subordinated notes-net of discount 1,323,592 1,321,989 Stockholders' equity 2,270,144 2,196,161 ------------- ------------ $ 37,011,423 $34,598,272 ============= ============ Book value per common share $ 39.57 $ 37.44 ============= ============ Common shares outstanding 57,375,909 58,663,619 ============= ============ New real estate loans originated during the quarter $ 2,106,376 $ 1,375,406 New real estate loans originated during the year $ 5,199,442 $ 4,578,500 Increase (decrease) in customer deposits during the quarter $ 543,767 $ (178,222) Increase in customer deposits during the year $ 736,455 $ 1,340,544 (b) Ratio of nonperforming assets to total assets 1.20% 1.08% Ratio of troubled debt restructured to total assets 0.16% 0.16% Loan loss reserve $ 178,354 $ 137,377
- ------------------------------------------------------------------------------- (a) In September 1996, Golden West Financial Corporation adopted SFAS 72 effective January 1, 1996 for acquisitions prior to September 30, 1982. As a result, the Company wrote-off goodwill totaling $205,242 as the cumulative effect of the change in accounting for goodwill (b) Amount reflects the sale of seven Colorado branches with $152,870 of customer deposits, and the acquisition of $47,952 in customer deposits in New Jersey. -----END PRIVACY-ENHANCED MESSAGE-----