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 22, 1995
H. F. Ahmanson & Company
(Exact name of registrant as specified in charter)
Delaware 1-8930 95-0479700
(State or other (Commission (IRS employer
jurisdiction of file number) identification no.)
incorporation)
4900 Rivergrade Road, Irwindale, California 91706
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (818) 960-6311
Not applicable
(Former name or former address, if changed since last report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 22, 1995, Home Savings of America, FSB, ("Home
Savings"), a wholly-owned subsidiary of H. F. Ahmanson & Company (the
"Company"), announced the completion of the sale of its New York retail
deposit branch system, with deposits totaling approximately $8.1 billion
in 60 branches, to GreenPoint Bank. The purchase price represents a
deposit premium of approximately $671 million or 8%. The sale included
the transfer of the branch premises.
The Company funded the sale with excess liquidity and a combination
of new borrowings of approximately $4.7 billion and sales of securities
of approximately $1.4 billion. In addition, the Company utilized funds
generated by the acquisition in the second quarter of 1995 of $1.2
billion in deposits from Household Bank, FSB. As a result of the sale
and related asset disposition and funding transactions, the Company's
total assets declined by approximately $2.9 billion.
Excluding the gain on sale of the branch system, the effect of the
transactions on future operations is expected to be approximately
earnings neutral. Future deployment of the capital generated by the
transaction is expected to be accretive to earnings per share.
Reductions in the Company's net interest income and fee income are
expected to be offset by reductions in general and administrative
expenses.
ITEM 5. OTHER EVENTS.
On October 3, 1995, the Board of Directors of the Company
authorized a stock repurchase program enabling the Company to repurchase
up to $250 million of its common stock and/or common stock equivalents
from time to time.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Presented below are the pro forma effects of the sale of the
Company's New York retail deposit branch system on its financial
condition as of June 30, 1995. In addition, the pro forma effects of
the sale which have a continuing impact on the Company's results of
operations, excluding the after-tax gain on the sale of approximately
$253 million, are presented below for the six months ended June 30, 1995
and the year ended December 31, 1994, reported as if the sale had
occurred on January 1 of the respective periods. Certain amounts in the
financial statements for the year ended December 31, 1994 have been
reclassified to conform to the current presentation.
H. F. AHMANSON & COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION (Unaudited)
(in thousands)
New York Pro Forma
June 30, 1995 Deposit Sale Balance
------------- ------------- -------------
ASSETS
- ------
Total cash and cash equivalents $ 1,810,365 $ (1,220,759) $ 589,606
Other investment securities 268,491 - 268,491
Investment in stock of Federal Home
Loan Bank (FHLB) 472,872 - 472,872
Mortgage-backed securities (MBS) 18,239,982 (1,420,000) 16,819,982
Loans receivable, net 30,569,370 (23,491) 30,545,879
Accrued interest receivable 153,699 - 153,699
Real estate held for development and
investment (REI), net of allowance 313,918 - 313,918
Real estate owned held for sale (REO), net
of allowance 191,524 - 191,524
Premises and equipment 624,988 (78,339) 546,649
Goodwill and other intangible assets 501,220 (106,906) 394,314
Other assets 289,926 (6,086) 283,840
Income taxes 35,761 (35,761) -
----------- ------------- -----------
$53,472,116 $ (2,891,342) $50,580,774
=========== ============= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- -------------------------------------
Deposits $42,988,665 $ (8,113,236) $34,875,429
Total borrowings 6,699,546 4,725,000 11,424,546
Income taxes - 226,248 226,248
Other liabilities 722,460 17,985 740,445
----------- ------------- -----------
Total liabilities 50,410,671 (3,144,003) 47,266,668
Stockholders' equity 3,061,445 252,661 3,314,106
----------- ------------- -----------
$53,472,116 $ (2,891,342) $50,580,774
=========== ============= ===========
H. F. AHMANSON & COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(dollars in thousands)
For the Six Months Ended June 30, 1995 For the Year Ended December 31, 1994
-------------------------------------- --------------------------------------
Historical Adjustments Pro Forma Historical Adjustments Pro Forma
------------- ----------- ----------- ------------- ----------- ----------
Interest income:
Interest on real estate loans $1,246,072 $ - $1,246,072 $2,265,050 $ - $2,265,050
Interest on MBS 514,470 (48,777) 465,693 686,390 (87,188) 599,202
Interest and dividends on investments 83,006 (32,273) 50,733 143,935 (55,151) 88,784
---------- --------- ---------- ---------- --------- ----------
Total interest income 1,843,548 (81,050) 1,762,498 3,095,375 (142,339) 2,953,036
---------- --------- ---------- ---------- --------- ----------
Interest expense:
Deposits 924,236 (173,623) 750,613 1,291,893 (270,171) 1,021,722
Short-term borrowings 94,661 145,766 240,427 182,721 199,395 382,116
FHLB and other borrowings 219,232 - 219,232 323,840 - 323,840
---------- --------- ---------- ---------- --------- ----------
Total interest expense 1,238,129 (27,857) 1,210,272 1,798,454 (70,776) 1,727,678
---------- --------- ---------- ---------- --------- ----------
Net interest income 605,419 (53,193) 552,226 1,296,921 (71,563) 1,225,358
Provision for loan losses 52,009 - 52,009 176,557 - 176,557
---------- --------- ---------- ---------- --------- ----------
Net interest income after
provision for loan losses 553,410 (53,193) 500,217 1,120,364 (71,563) 1,048,801
---------- --------- ---------- ---------- --------- ----------
Other income:
Gain on sales of MBS 9,280 - 9,280 4,868 - 4,868
Gain (loss) on sales of loans 2,010 - 2,010 (21,036) - (21,036)
Loan servicing income 27,862 - 27,862 74,441 - 74,441
Other fee income 50,354 (6,194) 44,160 110,368 (12,387) 97,981
Gain on sales of investment securities 112 - 112 202 - 202
Gain on sale of Illinois retail branch
system - - - 77,901 - 77,901
Other operating income (216) - (216) 13,612 - 13,612
---------- --------- ---------- ---------- --------- ----------
89,402 (6,194) 83,208 260,356 (12,387) 247,969
---------- --------- ---------- ---------- --------- ----------
Other expenses:
General and administrative expenses (G&A) 384,057 (37,669) 346,388 758,560 (75,339) 683,221
Operations of REI 3,708 - 3,708 97,644 - 97,644
Operations of REO 40,658 - 40,658 86,011 - 86,011
Amortization of goodwill and other
intangible assets 18,154 (7,526) 10,628 27,835 (18,746) 9,089
---------- --------- ---------- ---------- --------- ----------
446,577 (45,195) 401,382 970,050 (94,085) 875,965
---------- --------- ---------- ---------- --------- ----------
Earnings (loss) before provision
for income taxes (benefit) 196,235 (14,192) 182,043 410,670 10,135 420,805
Provision for income taxes (benefit) 83,305 (9,230) 74,075 173,312 (3,660) 169,652
---------- --------- ---------- ---------- --------- ----------
Net earnings (loss) $ 112,930 $ (4,962) $ 107,968 $ 237,358 $ 13,795 $ 251,153
========== ========= ========== ========== ========= ==========
Earnings per common share:
Primary $ 0.74 $ 0.70 $ 1.59 $ 1.71
Fully diluted $ 0.74 $ 0.70 $ 1.58 $ 1.69
Common shares outstanding, weighted average:
Primary 117,742,947 117,742,947 117,369,431 117,369,431
Fully diluted 129,951,435 129,951,435 128,946,242 128,946,242
The adjustments to the pro forma condensed consolidated statements
of operations represent reversal of the estimated amount of net interest
income, other fee income, general and administrative and other costs
attributable to the operations of the sold branches during the six
months ended June 30, 1995 and the year ended December 31, 1994.
Pro forma adjustments to interest income and interest expense were
determined using Home Savings' average rates for the respective
interest-earning assets and interest-costing liabilities during the
periods presented.
G&A expenses are comprised of compensation and other employee
expenses, occupancy expenses, federal deposit insurance premiums and
assessments, and other G&A expenses. The pro forma adjustments to G&A
expenses were based on historical costs related to the operations of the
New York branches.
Income taxes were determined using a marginal tax rate of 42.5%.
The pro forma adjustment to the amortization of goodwill, which is not
deductible for tax purposes, results in an effective tax rate that is
significantly different than the marginal rate.
(c) Exhibits.
99.1 Press release dated October 3, 1995 announcing Board of
Directors authorization of stock repurchase program.
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 hereunto duly authorized.
Date: October 6, 1995
H. F. AHMANSON & COMPANY
/s/ George Miranda
------------------------
By: George Miranda
First Vice President and
Principal Accounting Officer
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NO. DESCRIPTION NUMBERED PAGE
99.1 Press release dated October 3, 1995
announcing Board of Directors
authorization of stock repurchase program. 8