-----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, RJ1U1fXzidha/s+lgEdpfXW+r9LmYUzuBW6xAt9kj+voMIfNEie9OfB+L1QjATXc M4UPGyuRxIOFapC06F9/sQ== 0000771667-97-000046.txt : 19970409 0000771667-97-000046.hdr.sgml : 19970409 ACCESSION NUMBER: 0000771667-97-000046 CONFORMED SUBMISSION TYPE: DFAN14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19970408 SROS: NYSE SROS: PSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GREAT WESTERN FINANCIAL CORP CENTRAL INDEX KEY: 0000043512 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 951913457 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DFAN14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-04075 FILM NUMBER: 97576542 BUSINESS ADDRESS: STREET 1: 9200 OAKDALE AVENUE CITY: CHATSWORTH STATE: CA ZIP: 91311 BUSINESS PHONE: 8187753411 MAIL ADDRESS: STREET 1: 9200 OAKDALE AVENUE CITY: CHATSWORTH STATE: CA ZIP: 91311 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: AHMANSON H F & CO /DE/ CENTRAL INDEX KEY: 0000771667 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 950479700 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DFAN14A BUSINESS ADDRESS: STREET 1: 4900 RIVERGRADE RD CITY: IRWINDALE STATE: CA ZIP: 91706 BUSINESS PHONE: 8189606311 DFAN14A 1 SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the registrant / / Filed by a party other than the registrant /x/ Check the appropriate box: / / Preliminary proxy statement / / Confidential, for Use of the Commission Only (as permitted by / / Definitive proxy statement Rule 14a-6(e)(2)) / / Definitive additional materials /x/ Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12 GREAT WESTERN FINANCIAL CORPORATION (Name of Registrant as Specified in Its Charter) H. F. AHMANSON & COMPANY (Name of Person(s) Filing Proxy Statement) Payment of filing fee (Check the appropriate box): /x/ No fee required / / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: / / Fee paid previously with preliminary materials. / / Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. (1) Amount previously paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: H. F. AHMANSON & COMPANY 4900 Rivergrade Road Irwindale, California 91706 HOME SAVINGS OF AMERICA (818) 814-7922 SAVINGS OF AMERICA NEWS FOR IMMEDIATE RELEASE CONTACTS: - --------------------- MEDIA: MARY TRIGG (818) 814-7922 INVESTOR: STEVE SWARTZ (818) 814-7986 AHMANSON REPORTS RECORD EARNINGS - 93% INCREASE IN FIRST QUARTER EARNINGS PER SHARE - - RETURN ON EQUITY GROWS TO 17.2% - Irwindale, CA, April 8, 1997 -- H.F. Ahmanson & Company (NYSE:AHM), parent company of Home Savings of America, today announced continued strong earnings growth. First quarter 1997 net income was $103.1 million, or $0.87 per fully diluted common share. This represents a 59% increase in net income, or 93% per fully diluted common share, compared to the first quarter of 1996 and a 13% increase in net income, or 18% per fully diluted common share, compared to the fourth quarter of 1996. Results for 1997 include an after-tax gain on the sale of the company's Arizona branch system of $9.5 million, or $0.08 per fully diluted common share. Return on equity was 17.2% for the first quarter and 15.6% without the Arizona gain. Cash earnings per share were $0.90 in the first quarter of 1997, compared to $0.46 and $0.77 per share in the first and fourth quarters of 1996, respectively. Cash return on equity was 19.3% for the first quarter of 1997, compared to 9.2% and 16.6% for the first and fourth quarters of 1996, respectively. Excluding the Arizona gain, the cash return on equity would have been 17.6%. Ahmanson and Home Savings Chairman and Chief Executive Officer Charles R. Rinehart said, "We are delivering strong performance across the board - profits, efficiency, capital management and asset quality. First quarter results reflect solid gains in fee income, more progress in expense management, growth in consumer lending, much lower credit costs reflecting a year-long trend of lower nonperforming assets and delinquencies, as well as the benefits of prudent capital management. We are particularly proud of progress in the area of credit quality, as nonperforming assets again declined and reached their lowest level since November 1990. Along with lower nonperforming assets, credit costs continued their declining trend and were $25.3 million lower than last year's first quarter." RESULTS OF OPERATIONS NET INTEREST INCOME Net interest income totaled $317.6 million for the first quarter of 1997, compared to $317.0 million in the first quarter of 1996, and $317.7 million in the fourth quarter of 1996. In the first quarter of 1997, the average net interest margin was 2.64%, compared to 2.62% in the first quarter of 1996, and 2.65% in the fourth quarter of 1996. Rinehart noted, "Although financial stocks have suffered from recent increases in interest rates, we have implemented numerous initiatives to decrease rate exposure, including reducing the amount of mortgage assets held on the balance sheet, adding new variable rate loan products, adding consumer loan products, and increasing demand deposits through internal sales efforts as well as through the acquisition of 61 former First Interstate Bank branches. The company has further reduced risk by limiting the size of its balance sheet through the sale of certain mortgage assets and emphasizing the growth of fee income and reducing excess capital through its stock buyback programs. Home Savings has one of the lowest exposures of all major thrift institutions to rising interest rates. The company's fixed rate asset exposure is minimal, with only 5% of its mortgage loans and mortgage-backed securities being fixed rate." NONINTEREST INCOME In the first quarter of 1997, noninterest income, excluding the gain on the sale of the Arizona branches, was $72.9 million, an increase of $12.4 million from $60.5 million reported in the year ago quarter and an increase of $1.8 million from the fourth quarter of 1996, excluding the gain of $6.9 million for the sale of the San Antonio branches. The company continues its ongoing strategy of concentrating deposit gathering activities in its key retail markets. In March 1997, the company completed the sale of its Arizona deposit franchise consisting of four branches and $252 million in deposits for a pre-tax gain of $16.0 million. During the first quarter, the company announced the sale of its 12 West Florida branches. That transaction is expected to close in the second quarter of 1997. During the first quarter of 1997, fee income from personal financial services and Griffin Financial Services continued its improving trend as the company transitions into a full-service consumer and small business bank. Other fee income continued to improve in the first quarter of 1997, reaching $45.7 million compared to $26.8 million in the first quarter of 1996 and $44.2 million in the fourth quarter of 1996. GENERAL AND ADMINISTRATIVE EXPENSES General and administrative expenses (G&A) were $186.8 million in the first quarter of 1997, compared to $193.0 million in the first quarter of 1996 and $188.2 million in the fourth quarter of 1996. Expressed as an efficiency ratio that measures G&A expenses as a percentage of net interest income and loan servicing and other fee income, the efficiency ratio was 49.1% in the first quarter of 1997, compared to 53.8% and 49.5% in the first and fourth quarters of 1996, respectively. The first quarter 1997 includes $6.5 million of FDIC assessments while the first and fourth quarters of 1996 included $20.8 million and $1.3 million, respectively. CREDIT COSTS/ASSET QUALITY Total credit costs (provision for loan losses and expenses for the operations of foreclosed real estate) amounted to $46.3 million during the first quarter of 1997, compared to $71.6 million in the 1996 first quarter and $57.0 million in the 1996 fourth quarter, representing reductions of 35% and 19%, respectively. The 1997 first quarter credit costs reflect both lower net chargeoffs and significantly lower nonperforming asset levels compared to the year ago quarter. Net loan chargeoffs for the 1997 first quarter totaled $25.7 million, compared to $41.5 million in the first quarter of 1996 and $38.5 million in the fourth quarter of 1996. During the first quarter, nonperforming assets declined by $53.5 million, reaching their lowest level since November 1990. At March 31, 1997, nonperforming assets totaled $792.7 million, or 1.63% of total assets, compared to $977.4 million, or 1.96% at March 31, 1996, and $846.2 million, or 1.70% at December 31, 1996. Nonperforming assets decreased every month during the first quarter of 1997. Rinehart said, "Our credit quality continues to improve. A key leading indicator of credit quality is loans delinquent 60-89 days. This category of delinquencies is at its lowest level since November 1989." At March 31, 1997, the allowances for loan losses and foreclosed real estate were $387.7 million and $29.5 million, respectively. The ratio of allowances for losses to nonperforming assets equaled 50.7% at March 31, 1997, compared to 41.7% at March 31, 1996 and 48.0% at December 31, 1996. LOAN ORIGINATIONS The company originated $1.0 billion of mortgage loans in the first quarter of 1997, compared to $1.3 billion in the year-ago quarter. The company also funded $136 million in consumer loans during the first quarter of 1997, compared to $17 million in the first quarter of 1996. On the first business day of January 1997, the company funded more consumer loans than it did in the entire month of January 1996, reflecting the successful rollout of these products throughout the entire Home Savings' franchise. CAPITAL At March 31, 1997, Home Savings of America's capital ratios exceeded the regulatory requirements for well-capitalized institutions, the highest regulatory standard. STOCK PURCHASE PROGRAM In the first quarter of 1997, the company purchased 2.2 million shares of its common stock at an average price of $35.06 per share, investing $75.1 million. Between the initiation of the first stock purchase program in October of 1995 and March 31, 1997, the company has purchased 19.2 million common shares, or 16% of the outstanding shares at September 30, 1995, at an average price of $27.11. # # # # H.F. Ahmanson & Company, with $48.7 billion in assets, is the parent company of Home Savings of America, one of the nation's largest full-service consumer and small business banks. It operates 380 financial service centers in three states and 124 mortgage lending offices in eight states. Additional information, including monthly financial data, about H.F. Ahmanson & Company and Home Savings of America can be retrieved by using the following service: Corporate News on the Net: http://www.businesswire.com/cnn/ahm.htm For information regarding PC Banking, Home Loans, Investments, Insurance, Business Banking and Consumer Loans, contact: Home Savings Website: http://www.homesavings.com H. F. AHMANSON & COMPANY AND SUBSIDIARIES CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) (dollars in thousands except per share data)
At End of Period March 31, 1997 December 31, 1996 March 31, 1996 - ---------------- -------------- ----------------- -------------- Total assets $ 48,697,126 $ 49,902,044 $ 49,781,986 Investment portfolio $ 882,700 $ 1,184,857 $ 707,045 Loans receivable and mortgage-backed securities (MBS) $ 45,338,937 $ 46,085,670 $ 46,530,610 Deposits $ 34,399,125 $ 34,773,945 $ 33,947,928 Borrowings and trust capital securities $ 10,779,429 $ 11,728,934 $ 11,601,867 Stockholders' equity $ 2,398,942 $ 2,433,049 $ 2,952,702 Book value per common share $ 19.05 $ 19.09 $ 20.40 Tangible book value per common share $ 17.29 $ 17.31 $ 19.64 Total common shares outstanding 100,595,547 102,153,052 112,512,418 For the Three Months Ended - -------------------------- Net interest income $ 317,619 $ 317,722 $ 316,982 Provision for loan losses $ 24,223 $ 29,298 $ 45,942 Net income $ 103,093 $ 91,247 $ 64,755 Net income per fully diluted common share $ 0.87 $ 0.74 $ 0.45 Dividends per common share $ 0.22 $ 0.22 $ 0.22 Loans originated and purchased $ 1,134,521 $ 1,415,515 $ 1,339,779 Average Interest Rates: Yield on loans and MBS 7.34% 7.39% 7.42% Yield on investment portfolio 6.96% 7.17% 5.83% Yield on interest-earning assets 7.33% 7.39% 7.40% Cost of deposits 4.39% 4.41% 4.57% Cost of borrowings and trust capital securities 6.22% 6.37% 6.28% Cost of interest-costing liabilities 4.83% 4.89% 5.02% Interest rate spread 2.50% 2.50% 2.38% Net interest margin 2.64% 2.65% 2.62%
H. F. AHMANSON & COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) (in thousands)
Assets March 31, 1997 December 31, 1996 March 31, 1996 - ------ -------------- ----------------- -------------- Cash and amounts due from banks $ 540,831 $ 691,578 $ 683,480 Fed funds sold and securities purchased under agreements to resell 283,800 737,500 278,000 Other short-term investments 12,160 14,782 14,364 ---------- ----------- ----------- Total cash and cash equivalents 836,791 1,443,860 975,844 Other investment securities 159,240 11,597 12,254 Investment in stock of Federal Home Loan Bank (FHLB) 427,500 420,978 402,427 Mortgage-backed securities (MBS) 14,417,249 14,296,512 16,059,471 Loans receivable less allowance for losses of $387,688 (March 31, 1997), $389,135 (December 31, 1996) and $385,367 (March 31, 1996) 30,921,688 31,789,158 30,471,139 Accrued interest receivable 210,512 209,839 223,968 Real estate held for development and investment (REI) less allowance for losses of $121,318 (March 31, 1997), $132,432 (December 31, 1996) and $286,327 (March 31, 1996) 147,425 147,851 230,445 Real estate owned held for sale (REO) less allowance for losses of $29,529 (March 31, 1997), $32,137 (December 31, 1996) and $37,137 (March 31, 1996) 233,694 247,577 225,870 Premises and equipment 412,652 424,567 413,487 Goodwill and other intangible assets 298,887 308,083 143,981 Other assets 631,488 602,022 623,100 ----------- ----------- ----------- $48,697,126 $49,902,044 $49,781,986 =========== =========== =========== Liabilities, Capital Securities of Subsidiary Trust and Stockholders' Equity - ------------------------------------------- Deposits $34,399,125 $34,773,945 $33,947,928 Securities sold under agreements to repurchase 2,325,000 1,820,000 1,998,431 Other short-term borrowings 458,640 210,529 50,000 FHLB and other borrowings 7,847,454 9,549,992 9,553,436 Other liabilities 1,029,512 917,198 1,170,026 Income taxes 90,118 48,918 109,463 ----------- ----------- ----------- Total liabilities 46,149,849 47,320,582 46,829,284 Capital securities, Series A, of subsidiary trust 148,335 148,413 - Stockholders' equity 2,398,942 2,433,049 2,952,702 ----------- ----------- ----------- $48,697,126 $49,902,044 $49,781,986 =========== =========== ===========
H. F. AHMANSON & COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (dollars in thousands except per share data)
For the Three Months Ended ----------------------------------------- March 31, December 31, March 31, 1997 1996 1996 ------------ ------------- ------------ Interest income: Loans $ 577,533 $ 595,852 $ 574,855 MBS 267,673 272,638 308,354 Investments 16,897 16,224 11,661 ----------- ----------- ----------- Total interest income 862,103 884,714 894,870 ----------- ----------- ----------- Interest expense: Deposits 375,139 386,692 387,173 Short-term borrowings 33,120 29,583 40,230 FHLB and other borrowings 136,225 150,717 150,485 ----------- ----------- ----------- Total interest expense 544,484 566,992 577,888 ----------- ----------- ----------- Net interest income 317,619 317,722 316,982 Provision for loan losses 24,223 29,298 45,942 ----------- ----------- ----------- Net interest income after provision for loan losses 293,396 288,424 271,040 ----------- ----------- ----------- Other income: Gain on sales of MBS - 3,103 - Gain on sales of loans 7,989 3,845 15,028 Loan servicing income 16,748 18,449 15,145 Other fee income 45,715 44,243 26,819 Gain on sales of retail deposit branch systems 15,956 6,861 - Other operating income 2,461 1,507 3,538 ----------- ----------- ----------- 88,869 78,008 60,530 ----------- ----------- ----------- Other expenses: General and administrative expenses (G&A) 186,773 188,185 193,048 Operations of REI 1,859 1,388 6,743 Operations of REO 22,108 27,664 25,689 Amortization of goodwill and other intangible assets 6,390 6,935 3,994 ----------- ----------- ----------- 217,130 224,172 229,474 ----------- ----------- ----------- Income before provision for income taxes 165,135 142,260 102,096 Provision for income taxes 62,042 51,013 37,341 ----------- ----------- ----------- Net income $ 103,093 $ 91,247 $ 64,755 =========== =========== =========== Income attributable to common shares $ 98,998 $ 87,152 $ 56,460 =========== =========== =========== Income per common share: Primary $ 0.93 $ 0.78 $ 0.45 Fully diluted $ 0.87 $ 0.74 $ 0.45 Common shares outstanding, weighted average: Primary 102,308,938 106,159,514 114,781,516 Fully diluted 113,968,090 118,052,254 126,651,898 Return on average assets 0.84% 0.73% 0.51% Return on average equity 17.21% 14.71% 8.60% Return on average tangible equity (1) 19.29% 16.64% 9.18% Efficiency ratio 49.14% 49.47% 53.78% (1) Net income excluding amortization of goodwill and other intangible assets (net of applicable tax) as a percentage of average equity excluding goodwill and other intangible assets (net of applicable tax).
SHARES OF GREAT WESTERN FINANCIAL CORPORATION ("GWF") COMMON STOCK HELD BY H. F. AHMANSON & COMPANY ("AHMANSON"), ITS DIRECTORS AND EXECUTIVE OFFICERS AND CERTAIN EMPLOYEES, OTHER REPRESENTATIVES OF AHMANSON AND CERTAIN OTHER PERSONS WHO MAY SOLICIT PROXIES OR CONSENTS, AND CERTAIN TRANSACTIONS BETWEEN ANY OF THEM AND GWF Ahmanson and certain other persons named below may solicit proxies (a) to elect three nominees and one or more alternate nominees (the "Nominees") as directors of GWF at the annual meeting of stockholders of GWF to be held on a date to be announced (the "Annual Meeting") and (b) in favor of the adoption at the Annual Meeting of a non-binding stockholder resolution and seven proposals to amend the By-laws of GWF. Ahmanson and certain other persons named below are also soliciting consents from stockholders of GWF to approve proposals, without a stockholders' meeting, to adopt non-binding resolutions of stockholders and amendments to the By-laws of GWF. The participants in this solicitation may include Ahmanson; the directors of Ahmanson (Byron Allumbaugh, Harold A. Black, Richard M. Bressler, David R. Carpenter, Phillip D. Matthews, Richard L. Nolan, Delia M. Reyes, Charles R. Rinehart, Frank M. Sanchez, Elizabeth A. Sanders, Arthur W. Schmutz, William D. Schulte, and Bruce G. Willison); the following executive officers and employees of Ahmanson or its subsidiaries: Kevin M. Twomey (Senior Executive Vice President and Chief Financial Officer), Madeleine A. Kleiner (Senior Executive Vice President, Chief Administrative Officer and General Counsel), Anne-Drue M. Anderson (Executive Vice President and Treasurer), Tim S. Glassett (First Vice President and Assistant General Counsel), Linda McCall (Senior Vice President and Director of Corporate Taxes), Stephen A. Swartz (Senior Vice President and Director of Investor Relations), Barbara Timmer (Senior Vice President and Director of Government and Legislative Affairs), Mary A. Trigg (Senior Vice President and Director of Public Relations), Eric Warmstein (Senior Vice President and Director of Corporate Development), Samantha Davies (Vice President of Public Relations), Adrian Rodriguez (Vice President of Public Relations), and Peter Bennett (Assistant Vice President of Public Relations); and the following Nominees: Lawrence A. Del Santo, Robert T. Gelber, Wolfgang Schoellkopf, Hugh M. Grant and John E. Merow. As of April 7, 1997, Ahmanson is the beneficial owner of 3,134,100 shares of GWF Common Stock. Other than Mr. Gelber, who owns 332 shares of GWF Common Stock, none of the Nominees is the beneficial owner of any GWF Common Stock. Other than set forth herein, as of April 7, 1997, neither Ahmanson nor any of its directors, executive officers or other representatives or employees of Ahmanson, any Nominees or other persons known to Ahmanson, who may solicit proxies has any security holdings in GWF. Ahmanson disclaims beneficial ownership of any securities of GWF held by any pension plan or other employee benefit plan of Ahmanson or by any affiliate of Ahmanson. Ahmanson further disclaims beneficial ownership of any securities of GWF held by Ahmanson or any of its subsidiaries for the benefit of third parties or in customer or fiduciary accounts in the ordinary course of business. Although Credit Suisse First Boston Corporation ("CSFB") and Montgomery Securities ("Montgomery"), financial advisors to Ahmanson, do not admit that they or any of their directors, officers, employees or affiliates are a "participant," as defined in Schedule 14A promulgated under the Securities Exchange Act of 1934 by the Securities and Exchange Commission, or that such Schedule 14A requires the disclosure of certain information concerning CSFB or Montgomery, CSFB and Montgomery may assist Ahmanson in such a solicitation. Each of CSFB and Montgomery engages in a full range of investment banking, securities trading, market-making and brokerage services for institutional and individual clients. In the normal course of their respective businesses, each of CSFB and Montgomery may trade securities of GWF for their own account and the account of their customers and, accordingly, may at any time hold a long or short position in such securities. As of April 3, 1997, CSFB held a net long position of 4,824 shares of GWF common stock and Montgomery held no shares of GWF common stock. Except as disclosed above, to the knowledge of Ahmanson, none of Ahmanson, the directors or executive officers of Ahmanson, the employees or other representatives of Ahmanson who may participate in this solicitation or the Nominees named above has any interest, direct or indirect, by security holdings or otherwise, in GWF. -----END PRIVACY-ENHANCED MESSAGE-----