UNITED STATES
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): September 9, 2008
CASCADE FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
| Washington | 000-25286 | 91-1661954 |
(State of other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 2828 Colby Avenue, Everett, WA 98201 |
(Address of principal executive offices, including Zip Code) |
| (425) 339-5500 |
| (Registrant’s telephone number, including area code) |
| |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Section Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12). |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)). |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)). |
ITEM 8.01 Other Events
On September 7, 2008, the U.S. Treasury, the Federal Reserve and the Federal Housing Finance Agency (FHFA) announced that FHFA was placing Fannie Mae and Freddie Mac under conservatorship and would eliminate dividends on Fannie Mae and Freddie Mac common and preferred stock. At June 30, 2008, Cascade Financial Corporation (CASB) owned preferred shares issued by Fannie Mae ($10.2 million book value with a 8.25% coupon rate) and Freddie Mac ($8.4 million with a 5.57% coupon rate) with a combined adjusted book value of approximately $18.6 million. On September 8, 2008, the fair value of these securities had declined to approximately $2.1 million. Based on these developments, CASB expects to record a non-cash after-tax charge to its income statement on these investments for the quarter ending September 30, 2008. The total potential remaining loss on the Company’s investment in Fannie Mae and Freddie Mac preferred stock is $12.1 million on an after-tax basis. Even if this investment was written off in its entirety, the Company expects to remain “well-capitalized” for regulatory purposes.
Forward-Looking Statements
Certain of the statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. CASB’s actual results may differ materially from those included in the forward-looking statements. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may increase,” “may fluctuate,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” and “could.” These forward-looking statements involve risks and uncertainties including, but not limited to, economic conditions, portfolio growth, the credit performance of the portfolios, including bankruptcies, and seasonal factors; changes in general economic conditions including the performance of financial markets, the performance of coal and coal related industries, prevailing inflation and interest rates, realized gains from sales of investments, gains from asset sales, and losses on commercial lending activities; results of various investment activities; the effects of competitors’ pricing policies, of changes in laws and regulations on competition and of demographic changes on target market populations’ savings and financial planning needs; industry changes in information technology systems on which we are highly dependent; failure of acquisitions to produce revenue enhancements or cost savings at levels or within the time frames originally anticipated or unforeseen integration difficulties; the adoption of CASB of an FFIEC policy that provides guidance on the reporting of delinquent consumer loans and the timing of associated credit charge-offs for financial institution subsidiaries; and the resolution of legal proceedings and related matters. In addition, the banking industry in general is subject to various monetary and fiscal policies and regulations, which include those determined by the Federal Reserve Board, the Federal Deposit Insurance Corporation, and state regulators, whose policies and regulations could affect CASB’s results. These statements are representative only on the date hereof, and CASB undertakes no obligation to update any forward-looking statements made.
SIGNATURE
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.
Dated: September 9, 2008
CASCADE FINANCIAL CORPORATION |
By: /s/ Carol K. Nelson |
Carol K. Nelson President and CEO |
