SCHEDULE 14A INFORMATION
REVOCATION STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
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GREAT WESTERN FINANCIAL CORPORATION
-----------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------
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[Press Release]
NEWS
[Great Western Logo]
Contact: Ian Campbell (818) 775-3773 IMMEDIATE RELEASE
Charlie Coleman (818) 775-3766 April 16, 1997
GREAT WESTERN REPORTS FIRST QUARTER NET EARNINGS
Operating Earnings Improve 25 Percent Over Year-Ago Quarter
CHATSWORTH, Calif. -- Great Western Financial Corporation
(NYSE: GWF) today reported first quarter 1997 net earnings
of $65.7 million, or $0.44 per share -- and first quarter
1997 operating earnings of $89.1 million, or $0.61 per share
-- compared with net income of $71.3 million, or $.47 per
share, for the first quarter of 1996. The company said that
while operating earnings grew 25 percent over the year-ago
first quarter, net earnings for the first quarter of 1997
were reduced as a result of $33.7 million in merger-related
costs.
The major steps Great Western took in 1996 to
accelerate its evolution into a more cost-efficient, full
service consumer bank are now generating significant
improvements in the company s operating results, said
President and Chief Executive John F. Maher. We are
especially pleased that Great Western s new real estate loan
volume grew by 34 percent, retail banking fee income
continued to climb by nearly 30 percent, and our cost-
cutting initiatives have produced a drop in expenses of more
than 8 percent in the first quarter of 1997 over the year-
ago quarter. We particularly look forward to bringing this
improved performance capability to our strategic merger with
Washington Mutual -- which will create a premier consumer
banking company in the West and in Florida.
New real estate loan volume increased to $1.7 billion
in the first quarter of 1997, compared with $1.2 billion in
the first quarter of 1996. The 34 percent growth in new
real estate loan volume is primarily due to increased
wholesale lending production. Approximately 67 percent of
new loan originations in the first quarter of 1997 were
adjustable rate mortgages, compared with approximately 64
percent in the same period of 1996. New real estate loans
originated outside California increased to 63 percent of
originations during the first quarter of 1997, compared with
61 percent of originations for the entire year of 1996.
Net interest income totaled $338.2 million in the 1997
first quarter, compared with $352.3 million in the same
quarter of 1996. The interest spread, the difference
between the yield on interest earning assets and the
company s interest bearing liabilities, was 3.13 percent for
the first quarter of 1997, compared with 3.05 percent during
the fourth quarter of 1996. For the year-ago first quarter,
the interest spread was 3.23 percent. The decrease in the
interest spread from the year-ago first quarter was
primarily due to a reduction in the yield on loans,
particularly on real estate loans affected by a decline in
the 11th District Cost of Funds Index to which the majority
of the company s real estate loan portfolio is tied, and
consumer loans at the company s Consumer Finance Group.
Noninterest income was $95.3 million in the 1997 first
quarter, compared with $75.7 million in the 1996 first
quarter. The growth in noninterest income from the year-
ago quarter is due to an increase in retail banking fees and
a $6.9 million gain on the sale of premises and equipment.
Retail banking fees in the 1997 first quarter totaled $54
million, compared with $41.7 million in the first quarter of
1996. Retail banking fee income has improved due to expanded
use of fee-based products and more active management of fee
collection.
Noninterest expense for the first quarter of 1997
included a charge of $33.7 million for transaction costs
primarily related to the definitive merger agreement with
Seattle-based Washington Mutual, Inc. that was announced on
March 6. Excluding the impact of the merger-related charge,
noninterest expense in the first quarter of 1997 totaled
$244.7 million, compared with $260 million (excluding the
impact of several non-recurring charges) in the fourth
quarter of 1996. Noninterest expense for the first quarter
of 1996 was $267.1 million. Noninterest expenses fell more
than 8 percent in the first quarter of 1997 compared with
the year-ago first quarter.
The decline in first quarter 1997 noninterest expense
(excluding the impact of the merger-related charge) from the
first quarter 1996 resulted from reduced salaries and
benefits of $11.1 million as the benefits of the comprehensive
program to reengineer the company s mortgage origination
business and other efficiency initiatives are realized, and
a lower FDIC insurance premium of $11.6 million due to the
signing of the Deposit Insurance Funds Act of 1996.
Merger-related transaction costs of $33.7 million
include investment banking, legal, consulting fees and
additional severance costs related to 1996 fourth quarter
restructuring charges that were triggered effective February
25, 1997 upon the adoption of a broad-based, change-in-control
severance plan for Great Western employees. This increase to
the restructuring accrual recorded in the 1996 fourth quarter is
for incremental severance charges which employees terminated
after February 24, 1997 are entitled to receive under
provisions of the change-in-control severance plan adopted
on that date.
Nonperforming assets were $547.8 million, or 1.28
percent of total assets at March 31, 1997, compared with
$546 million, or 1.27 percent of total assets at December
31, 1996. Nonperforming assets were $791.3 million, or 1.81
percent of total assets at March 31, 1996. Total
nonperforming assets remained relatively unchanged compared
with the previous quarter. An increase in nonperforming
single family residential loans was offset by a decrease in
real estate owned.
The provision for loan and lease losses was $40.4
million in the 1997 first quarter, compared with $85.9
million in the fourth quarter of 1996 and $42.1 million for
the year-ago first quarter. The decrease was due to reduced
credit costs as a result of the bulk sale of nonperforming
assets in the fourth quarter of 1996. Although the
provision decreased, the company strengthened its reserve
from 1.01 percent of total loans receivable at December 31,
1996 to 1.02 percent at March 31, 1997.
The company s Consumer Finance Group produced net
income of $10.7 million in the first quarter of 1997,
compared with $14 million for the first quarter of 1996.
The reduction in income from the year-ago first quarter is
due primarily to a decline in net interest income from $67.2
million in the 1996 first quarter to $61.8 million in the
1997 first quarter as a result of a shift to a lower-yielding
product mix. New loan volume in the first quarter of 1997 for
the Consumer Finance Group increased to $463.9 million
from $404.7 in the year-ago first quarter. Based in Tampa,
Fla., the Consumer Finance Group primarily originates retail
consumer loans through a network of more than 500 offices in
23 states.
The increase in the effective tax rate during the first
quarter of 1997 to 42.7 percent from 40 percent in the first
quarter of 1996 was due to the non-deductibility of certain
merger-related costs.
With assets of $42.9 billion, Great Western Financial
Corporation is a diversified financial services company
operating more than 1,150 mortgage lending, retail banking,
and consumer finance offices nationwide. The company s
principal subsidiary, Great Western Bank, is a mortgage-
oriented consumer bank with banking branch networks in
California and Florida.
Great Western Financial Corporation ("Great Western")
and the persons named below may be deemed to be participants
in the solicitation of proxies in connection with the merger
of Great Western and Washington Mutual, Inc. ("Washington
Mutual") pursuant to which each outstanding share of Great
Western common stock would be converted into 0.9 shares of
Washington Mutual common stock (the "Merger"). Participants
in this solicitation may include the directors of Great
Western (J. F. Montgomery, J. F. Maher, Dr. D. Alexander, H.
F. Christie, S. E. Frank, J. V. Giovenco, F. A. Gryp, E.
Hernandez, Jr., C. D. Miller, Dr. A. E. Siegel and W. B.
Wood, Jr.); the following executive officers of Great
Western: J. L. Erikson, C. F. Geuther, M. M. Pappas, A. W.
Schenck III, R. W. Sims and J. M. Studenmund; and the
following other members of management of Great Western: S.
F. Adams, B. F. Antenberg, B. R. Barkley, I. D. Campbell, C.
E. Coleman, A. D. Meadows and J. A. Trotter (collectively,
the "Great Western Participants"). Messrs. Montgomery and
Maher beneficially own 680,488 shares and 611,762 shares of
Great Western common stock, respectively (including shares
subject to stock options exercisable within 60 days). The
remaining Great Western Participants do not beneficially
own, individually or in the aggregate, in excess of 1% of
Great Western's equity securities.
Great Western has retained Goldman, Sachs & Co.
("Goldman Sachs") and Merrill Lynch & Co. ("Merrill Lynch")
to act as its financial advisors in connection with the
Merger, as well as the merger proposal by H.F. Ahmanson &
Company, for which they received and may receive substantial
fees, as well as reimbursement of reasonable out-of-pocket
expenses. In addition, Great Western has agreed to
indemnify Goldman Sachs and Merrill Lynch and certain
related persons against certain liabilities, Merrill Lynch
is an investment banking firm that provides a full range of
financial services for institutional and individual clients.
Neither Goldman Sachs nor Merrill Lynch admits that it or
any of its directors, officers or employees is a
"participant" as defined in Schedule 14A promulgated under
the Securities Exchange Act of 1934, as amended, in the
solicitation, or that Schedule 14A requires the disclosure
of certain information concerning Goldman Sachs and Merrill
Lynch. In connection with Goldman Sachs s role as financial
advisor to Great Western, Goldman Sachs and the following
investment banking employees of Goldman Sachs may
communicate in person, by telephone or otherwise with a
limited number of institutions, brokers or other persons who
are stockholders of Great Western: J. Wender, J. Mahoney,
A. Gordon, T. Owens and A. Vittorelli. In connection with
Merrill Lynch's role as financial advisor to Great Western,
Merrill Lynch and the following investment banking employees
of Merrill Lynch may communicate in person, by telephone or
otherwise with a limited number of institutions, brokers or
other persons who are stockholders of Great Western: H.
Lurie, L. S. Wolfe, P. Wetzel, F. V. McMahon, J. Esposito,
A. Sun, C. Del-Moral Niles and K. Gupta. In the normal
course of their respective businesses Goldman Sachs and
Merrill Lynch regularly buy and sell securities issued by
Great Western and its affiliates ("Great Western Securities")
and Washington Mutual and its affiliates ("Washington Mutual
Securities") for its own account and for the accounts of its
customers, which transactions may result in Goldman Sachs
and its associates and Merrill Lynch and its associates
having a net "long" or net "short" position in Great Western
Securities, Washington Mutual Securities, or option
contracts with other derivatives in or relating to Great
Western Securities or Washington Mutual Securities. As of
April 7, 1997, Goldman Sachs had positions in Great Western
Securities and Washington Mutual Securities as principal as
follows: (i) net "long" 8,973 of Great Western's common
shares; (ii) net "long" $1 million of Great Western's
deposit notes; and (iii) net "long" 1,098 of Washington
Mutual s common shares. As of April 7, 1997, Merrill Lynch
had positions in Great Western Securities and Washington
Mutual Securities as principal as follows: (i) net "long"
7,125 of Great Western's common shares; (ii) net "long''
1,526 of Washington Mutual s common shares.
Other participants include Washington Mutual and may
include the directors of Washington Mutual (D. P. Beighle,
D. Bonderman, H. M. Bridge, J.T. Crandall, R. H. Eigsti, J.
W. Ellis, D. J. Evans, A. V. Farrell, W.P. Gerberding, K. K.
Killinger, S. B. McKinney, M. K. Murphy, L. H. Pepper, W. G.
Reed, Jr. and J. H. Stever); the following executive
officers of Washington Mutual: C. S. Davis, S. P. Freimuth,
L. D. Lannoye, W. A. Longbrake, D. W. Oppenheimer, C. E.
Tall and S. L. Wilson; and the following other members of
management of Washington Mutual: K. Christensen, J.
DeGrande, W. Ehrlich, J. B. Fitzgerald, M. Kittner and D. G.
Wisdorf (collectively, the "Washington Mutual Participants").
Messrs. Bonderman, Crandall and Killinger beneficially own
1,894,141 shares, 6,549,755 shares and 1,044,224 shares of
Washington Mutual common stock, respectively. The remaining
Washington Mutual Participants do not beneficially own,
individually or in the aggregate, in excess of 1% of Washington
Mutual's equity securities. The Washington Mutual Participants
do not beneficially own, individually or in the aggregate, in
excess of 1% of Great Western's equity securities.
Washington Mutual has retained Lehman Brothers Inc.
("Lehman Brothers") to act as its financial advisor in
connection with the Merger for which it received and may
receive substantial fees as well as reimbursement of
reasonable out-of-pocket expenses. In addition, Washington
Mutual has agreed to indemnify Lehman Brothers and certain
related persons against certain liabilities, including
certain liabilities under the federal securities laws,
arising out of its engagement. Lehman Brothers is an
investment banking firm that provides a full range of
financial services for institutional and individual clients.
Lehman Brothers does not admit that it or any of its
directors, officers or employees is a "participant" as
defined in Schedule 14A promulgated under the Securities
Exchange Act of 1934, as amended, in the solicitation, or
that Schedule 14A requires the disclosure of certain
information concerning Lehman Brothers. In connection with
Lehman Brothers' role as financial advisor to Washington
Mutual, Lehman Brothers and the following investment banking
employees of Lehman Brothers may communicate in person, by
telephone or otherwise with a limited number of
institutions, brokers or other persons who are stockholders
of Washington Mutual and Great Western: S. B. Wolitzer, P.
R. Erlanger, S. Sobti, D. J. Kim, C. P. Sweeney and D. A.
Trznadel. In the normal course of its business Lehman
Brothers regularly buys and sells Washington Mutual
Securities and Great Western Securities for its own account
and for the accounts of its customers, which transactions
may result in Lehman Brothers and its associates having a
net "long" or net "short" position in Washington Mutual
Securities, Great Western Securities or option contracts
with other derivatives in or relating to Washington Mutual
Securities or Great Western Securities. As of April 7,
1997, Lehman Brothers had positions in Washington Mutual
Securities and Great Western Securities as principal as
follows: (i) net "short" 224 of Washington Mutual s common
shares; (ii) net "long" 27,434 shares of Washington
Mutual s 9.12% preferred stock; (iii) net "long" 124,964
shares of Washington Mutual s 7.60% preferred stock; (iv)
net "short" 3,509 of Great Western's common shares; and (v)
net "long" 160,000 shares of Great Western's 8.30% preferred
stock.
# # #
This news release includes the attached consolidating
statement of operations, consolidated statement of financial
condition and consolidated statement of changes in
stockholders equity for the three months ended March 31,
1997, and March 31, 1996, and selected financial information
for the same periods.
GREAT WESTERN FINANCIAL CORPORATION
CONSOLIDATING STATEMENT OF OPERATIONS
(Dollars in thousands)
Unaudited
Banking Consumer
For the three months ended March 31 Operations Finance Group 1997 1996
- ----------------------------------- ------------- ------------- ------------- -------------
INTEREST INCOME
Securities available-for-sale $ 12,284 $ 2,453 $ 14,737 $ 14,631
Morgage-backed securities 138,577 - 138,577 174,026
Loans
Real estate 521,689 - 521,689 521,110
Consumer Finance - 91,205 91,205 93,888
Other 4,178 - 4,178 10,852
------------- ------------- ------------- -------------
Total loan interest income 525,867 91,205 617,072 625,850
Other 13,872 - 13,872 10,421
------------- ------------- ------------- -------------
Total interest income 690,600 93,658 784,258 824,928
INTEREST EXPENSE
Deposits 277,656 2,120 279,776 303,004
Borrowings
Short-term borrowings 94,277 5,756 100,033 116,338
Long-term borrowings 42,332 23,953 66,285 53,300
------------- ------------- ------------- -------------
Total interest expense 414,265 31,829 446,094 472,642
NET INTEREST INCOME 276,335 61,829 338,164 352,286
Provision for loan and lease losses 24,990 15,400 40,390 42,100
------------- ------------- ------------- -------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN AND LEASE LOSSES 251,345 46,429 297,774 310,186
NONINTEREST INCOME
Retail banking fees 54,033 - 54,033 41,664
Servicing fees 12,317 - 12,317 11,453
Securities operations 7,776 - 7,776 6,210
Real estate fees 7,989 - 7,989 6,460
Net insurance operations 1,660 5,178 6,838 7,365
Net gain on sale of mortgages 1,732 - 1,732 2,332
Other 3,751 888 4,639 224
------------- ------------- ------------- --------------
Total noninterest income 89,258 6,066 95,324 75,708
NONINTEREST EXPENSE
Salaries and benefits 85,807 18,253 104,060 115,123
Transaction costs 33,721 - 33,721 -
Premises and occupancy 27,546 2,837 30,383 31,843
Data processing 17,337 17,337 17,513
Operating losses and settlements 9,837 - 9,837 7,173
Outside data processing 9,199 - 9,199 11,591
Professional fees 9,162 - 9,162 6,123
Telecommunications 9,078 - 9,078 8,749
Other 42,043 13,575 55,618 68,985
------------- ------------- ------------- --------------
Total noninterest expense 243,730 34,665 278,395 267,100
------------- ------------- ------------- --------------
EARNINGS BEFORE TAXES 96,873 17,830 114,703 118,794
Income tax expense 41,900 7,100 49,000 47,500
------------- ------------- ------------- --------------
NET EARNINGS $ 54,973 $ 10,730 $ 65,703 $ 71,294
============= ============= ============= ==============
Average common shares outstanding
Without dilution 141,305,122 139,142,551
Fully diluted 141,595,846 145,531,904
Earnings per share based on average common
shares outstanding
Primary $ 0.44 $ 0.47
Fully diluted 0.44 0.47
Cash dividends per common share 0.25 0.23
GREAT WESTERN FINANCIAL CORPORATION
SELECTED FINANCIAL INFORMATION
(Dollars in thousands)
Unaudited
Banking Consumer
For the three months ended March 30 Operations Finance Group 1997 1996
- ----------------------------------- ------------- ------------- ------------- -------------
OTHER NONINTEREST INCOME
Gain (loss) on sale of premises $ 6,931 $ - $ 6,931 $ (205)
Gain on sale of leases 716 - 716 539
Net gain on sale of student loan 669 - 669 109
Loss on affordable housing investment (605) (605) (965)
Write-downs of mortgage-backed securities (4,200) - (4,200) -
Other 240 888 1,128 746
------------- ------------- ------------- -------------
Total other noninterest income $ 3,751 $ 888 $ 4,639 $ 224
------------- ------------- ------------- -------------
OTHER NONINTEREST EXPENSE
Amortization of intangibles $ 7,014 $ 1,961 $ 8,975 $ 9,429
Postage 6,772 - 6,772 4,805
Advertising and promotion 4,042 1,052 5,094 9,159
FDIC insurance premium 4,577 - 4,577 16,146
Contract services 4,336 - 4,336 1,617
Office supplies 4,306 - 4,306 4,353
Net real estate operations 3,999 - 3,999 5,701
Insurance 2,164 - 2,164 2,233
Other 4,833 10,562 15,395 15,542
------------- ------------- ------------- -------------
Total other noninterest expense $ 42,043 $ 13,575 $ 55,618 $ 68,985
NET REAL ESTATE OPERATIONS
Net operating losses and holding costs $ 4,361 $ - $ 4,361 $ 7,951
Write-downs 1,753 - 1,753 -
Interest recognized on advances (834) - (834) (9)
Net gain on sale of real estate (1,281) - (1,281) (2,241)
------------ ------------- ------------- -------------
$ 3,999 $ - $ 3,999 $ 5,701
------------ ------------- ------------- -------------
GREAT WESTERN FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(Dollars in thousands)
Unaudited
March 31 December 31 March 31
1997 1996 1996
------------- -------------- -------------
ASSETS
Cash $ 339,256 $ 534,192 $ 773,418
Certificates of deposit, repurchase agreements and federal fund 550,830 300,100 257,125
Securities available-for-sale 1,173,993 1,279,283 1,152,256
Mortgage-backed securities held-to-maturity (fair value
$1,572,046, $1,622,573 and $1,843,391) 1,554,197 1,618,709 1,827,150
Mortgage-backed securities available-for-sale 5,981,604 6,169,842 7,549,632
------------- -------------- ------------
7,535,801 7,788,551 9,376,782
Loans receivable, net of allowance for loan and lease losses 30,999,178 30,717,320 29,277,567
Loans available-for-sale 211,675 105,872 527,016
------------- -------------- -------------
Net loans 31,210,853 30,823,192 29,804,583
Investment in FHLB 384,231 377,946 360,414
Real estate available-for-sale or development, net 115,149 159,997 225,119
Interest receivable 238,849 245,539 266,777
Premises and equipment, net 525,178 552,422 592,651
Intangibles arising from acquisitions 277,016 285,991 314,284
Company owned life insurance 182,643 180,319 165,722
Other assets 344,104 347,040 492,800
------------- -------------- -------------
Total assets 42,877,903 42,874,572 43,781,931
============= ============== ============
LIABILITIES
Deposits 28,158,331 28,586,773 29,341,730
Short-term borrowings from FHLB 1,798,298 2,011,733 1,388,111
Securities sold under agreements to repurchase 4,483,584 4,197,666 5,734,501
Short-term borrowings 1,286,942 1,101,506 947,416
Long-term borrowings 3,092,335 3,190,908 2,420,615
Accrued interest payable 141,687 172,324 101,155
Taxes on income, principally deferred 297,404 226,075 325,971
Other liabilities and accrued expenses 634,252 692,387 600,300
Total liabilities 39,892,833 40,179,372 40,859,799
Guaranteed preferred beneficial interest in Company subordinated notes 400,000 100,000 100,000
STOCKHOLDERS' EQUITY
Preferred stock, par value $1.00 per share; Authorized 10,000,000 shares;
Cumulative Convertible issued none, none and 517,500;
Cumulative issued 660,000, 660,000 and 660,000 165,000 165,000 294,375
Common stock, par value $1.00 per share; Authorized 200,000,000 shares;
Issued 137,885,310, 137,875,955 and 137,204,953 137,885 137,876 137,205
Additional paid-in-capital 677,250 680,428 711,770
Retained earnings-substantially restricted 1,563,139 1,535,264 1,606,287
Unearned compensation - (327) (3,294)
Securities valuation allowance 41,796 76,959 75,789
Total stockholders' equity 2,585,070 2,595,200 2,822,132
------------- ------------- -------------
Total liabilities and stockholders' equity $ 42,877,903 $ 42,874,572 $ 43,781,931
============= ============= =============
GREAT WESTERN FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Dollars in thousands)
Unaudited
For the three months ended March 31
----------------------------------- 1997 1996
PREFERRED STOCK
Balance, beginning of period $ 165,000 $ 294,375
Balance, end of period 165,000 294,375
COMMON STOCK
Balance, beginning of period 137,876 137,279
Common stock issued upon exercise of stock options 988 136
Common stock issued under dividend reinvestment plan 22 17
Common stock acquired (1,001) (223)
Restricted stock awards granted, net of cancellations -- (4)
Balance, end of period 137,885 137,205
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of period 680,428 713,889
Common stock issued upon exercise of stock options 27,004 2,554
Common stock issued under dividend reinvestment plan 825 380
Common stock acquired (31,007) (4,996)
Restricted stock awards granted, net of cancellations -- (57)
Balance, end of period 677,250 711,770
RETAINED EARNINGS
Balance, beginning of period 1,535,264 1,572,782
Net earnings 65,703 71,294
Preferred stock dividends (3,424) (31,535)
Common stock dividends (34,404) (6,254)
Balance, end of period 1,563,139 1,606,287
UNEARNED COMPENSATION
Balance, beginning of period (327) (4,282)
Amortization of restricted stock 327 988
Balance, end of period --- (3,294)
SECURITIES VALUATION ALLOWANCE
Balance, beginning of period 76,959 108,433
Change in unrealized net gain, net of taxes (35,163) (32,644)
Balance, end of period 41,796 75,789
Total stockholders' equity $2,585,070 $2,822,132
GREAT WESTERN FINANCIAL CORPORATION
SELECTED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
UNAUDITED
March 31 December 31 March 31
At period ended 1997 1996 1996
---------------
NONPERFORMING ASSETS AND TROUBLED DEBT RESTRUCTURINGS
Delinquent loans (more than 90 days delinquent)
Real estate $ 377,361 $303,180 $ 463,056
Consumer Finance 44,879 45,622 26,044
Other 1,361 3,200 1,035
Troubled debt restructurings 47,068 74,196 111,983
Real estate owned 77,102 119,799 189,155
$ 547,771 $545,997 $ 791,273
Percent to total assets 1.28% 1.27% 1.81%
At or for the three months ended
ALLOWANCE FOR LOAN AND LEASE LOSSES
Beginning Balance $ 313,699 $ 321,630 $362,849
Provision for loan losses
Real estate loans
Single-family 33,710 83,876 26,932
Commercial and other (10,184) (14,993) --
Consumer Finance 15,400 15,400 14,500
Other 1,464 1,617 668
Total provision for loan losses 40,390 85,900 42,100
Net charge-offs
Real estate loans
Single-family (14,057) (83,586) (40,825)
Commercial and other (2,321) (4,399) (2,808)
Consumer Finance (15,100) (3,940) (13,453)
Other (1,796) (1,906) (285)
Total net charge-offs (33,274) (93,831) (57,371)
Other (15) --- --
Ending balance 320,800 313,699 347,578
Total net loan charge-offs as a percentage of average
loans (annualized) 0.43% 1.20% 0.76%
Allowance for loan and lease losses as a percentage of
total loans receivable (1) 1.02% 1.01% 1.15%
For the three months ended
LOANS ORIGINATED
Real estate $ 1,665,089 $1,632,143 $ 1,239,694
Consumer Finance 463,914 601,787 404,693
Other 91,309 98,187 93,498
Total new loans $ 2,220,312 $2,332,117 $ 1,737,885
REAL ESTATE LOANS SOLD $ 421,637 $ 475,528 $ 415,750
LOANS SERVICED FOR OTHERS $11,523,560 $11,686,932 $11,106,036
(1) Total loans receivable exclude loans held for sale
GREAT WESTERN FINANCIAL CORPORATION
NET INTEREST INCOME
(Dollars in thousands)
Unaudited
Three Months Ended
-----------------------------------------------------------------------------------------------
March 31, 1997 December 31, 1996 March 31, 1996
-----------------------------------------------------------------------------------------------
Average Average Average
Average Average Yield/ Average Yield/ Average Yield
Balance Interest Rate Balance Interest Rate Balance Interest Rate
------- --------- ------- ------- -------- ------ -------- -------- -------
Earning Assets
Repurchase agreements and
federal funds $ 451,154 $ 5,983 5.30% $ 321,186 $ 4,570 5.69% $ 350,984 $ 4,777 5.44%
Securities available-for-sale 965,101 14,737 6.11 1,058,937 16,325 6.17 951,735 14,631 6.15
Mortgage-backed securitities 7,624,849 138,577 7.27 8,058,016 143,369 7.12 9,610,728 174,026 7.24
Loans
Real estate 28,825,042 521,689 7.24 28,696,621 522,365 7.28 27,662,772 521,110 7.54%
Consumer Finance 2,171,358 91,205 16.80 2,144,796 93,973 17.53 2,102,546 93,888 17.86
Other 241,872 4,178 6.91 499,578 12,359 9.90 540,020 10,852 8.04
------------ ---------- ----- ---------- ---------- ----- ------------ --------- -----
Total loans 31,238,272 617,072 7.90 31,340,995 628,697 8.02 30,305,338 625,850 8.26
Other 510,510 7,889 6.18 504,953 8,586 6.80 332,512 5,644 6.79
------------ ---------- ----- ---------- ---------- ----- ----------- -------- -----
Total earning assets 40,789,886 784,258 7.69 41,284,087 801,547 7.77 41,551,297 824,928 7.94
Other assets 2,060,102 2,022,416 2,498,365
------------ ---------- ----------
Total assets 42,849,988 43,306,503 44,049,662
============ ========== ==========
Interest Bearing Liabilities
Deposits
Checking 4,276,095 6,613 0.62 4,395,367 7,875 0.72 4,457,642 8,522 0.76
Money market and other savings 7,103,560 56,723 3.19 6,621,412 52,906 3.20 6,553,877 46,542 2.84
Term 16,685,904 216,139 5.18 17,556,719 231,778 5.28 17,790,521 244,175 5.49
Wholesale 222,059 301 0.54 213,685 628 1.18 446,566 3,765 3.37
------------ ---------- ----- ---------- --------- ----- ---------- ------- -----
Total deposits 28,287,618 279,776 3.96 28,787,183 293,187 4.07 29,248,606 303,004 4.14
Borrowings
Short-term borrowings from FHLB 1,454,875 20,050 5.51 1,441,553 20,773 5.76 1,052,974 14,613 5.55
Securities sold under repurchase
agreements 4,713,046 64,078 5.44 4,815,685 67,234 5.58 6,193,162 84,558 5.46
Short-term borrowings 1,186,580 15,905 5.36 1,320,154 17,731 5.37 1,155,897 17,168 5.94
Long-term borrowings (1) 3,462,799 66,285 7.66 3,210,625 67,611 8.42 2,520,769 53,299 8.46
------------ ---------- ----- ---------- ---------- ----- ------------ -------- -----
Total borrowings 10,817,300 166,318 6.15 10,788,017 173,349 6.43 10,922,802 169,638 6.21
Total interest bearing ------------ ---------- ----- ---------- ---------- ----- ----------- -------- -----
liabilities 39,104,918 446,094 4.56 39,575,200 466,536 4.72 40,171,408 472,642 4.71
Other liabilities 1,133,372 1,095,014 1,058,560
Stockholders' equity 2,611,698 2,636,289 2,819,694
------------ ---------- ----------
Total liabilities and equity 42,849,988 43,306,503 44,049,662
============ ========== ==========
Interest spread 3.13 % 3.05% 3.23%
===== ===== ====
Effective yield
Interest income/total earning
assets $40,789,886 $ 784,258 7.69% $41,284,087 $ 801,547 7.77% $41,551,297 $ 824,928 7.94%
Interest expense/total earning
assets 40,789,886 446,094 4.37 41,284,087 466,536 4.52 41,551,297 472,642 4.55
Net interest income/net interest ---------- ----- ------------ ----- ---------- -------- -----
margin $ 338,164 3.32% 335,011 3.25% $ 352,286 3.39%
========== ===== ============ ===== ========== =====
(1) Includes $316,129 of guaranteed preferred beneficial interest in Company subordinated notes at March 31, 1997 and $100,000 at
December 31, 1996 and March 31, 1996.
GREAT WESTERN FINANCIAL CORPORATION
SELECTED FINANCIAL STATISTICS
(Dollars in thousands)
Unaudited
March 31 December 31 March 31
1997 1996 1996
For the quarter ended
Net earnings (annualized) as a percent of
Average assets 0.61% 0.05% 0.65%
Average equity 10.06% 0.79% 10.11%
Stockholders' equity per
common share $17.55 $17.63 $18.42
Tangible stockholders' equity
per common share 15.54 15.55 16.13
Common shares outstanding 137,885,310 137,875,955 137,204,953
GREAT WESTERN BANK, A FEDERAL SAVINGS BANK
FULLY PHASED-IN CAPITAL RATIOS
Leverage/tangible capital (1) 5.95% 5.85% 5.84%
Tier 1 risk-based capital (1) 9.95% 9.77% 9.77%
Risk-based capital (1) 11.45% 11.23% 12.21%
(1) Amounts at March 31, 1997 are preliminary.