we bought a load of this stock at 32.6
I hope the market likes it.
biz.yahoo.com
Press Release
SOURCE: Washington Mutual
Washington Mutual Announces Record Quarterly Earnings
Board of Directors Increases Cash Dividend
SEATTLE--(BUSINESS WIRE)--April 16, 2002--Washington Mutual, Inc. (NYSE:WM - news) today announced record quarterly earnings of $950 million, or 98 cents per diluted share, for the quarter ended March 31, 2002, up 29 percent on a per share basis from $641 million, or 76 cents per diluted share for the same period a year ago.
Earnings for the first quarter of 2002 included results of the former Dime Bancorp, Inc. (Dime), which the company acquired on Jan. 4, and results of the former operations of HomeSide Lending, Inc. (HomeSide), the U.S. mortgage unit of the National Australia Bank Limited, which Washington Mutual acquired in an asset acquisition on March 1. Both acquisitions were accounted for as purchase transactions. In 2002, new accounting rules under generally accepted accounting principles (GAAP) eliminated the amortization of goodwill. The impact of goodwill amortization to net income in the first quarter of 2001 was $29 million, or 3 cents per diluted share. (Year-over-year comparisons reflect the three acquisitions completed in 2001.)
In addition to the exceptional earnings growth, highlights of the recently completed quarter include:
A net interest margin of 3.74 percent and a higher average earning asset base combined to produce a 76 percent increase in net interest income over last year;
A return on common equity of 20.68 percent;
Record quarterly checking account growth of 327,598, excluding accounts acquired from Dime;
Record depositor and other retail banking fees of $361 million, up 29 percent from last year;
Record loan volume of $65.27 billion, including a 187 percent increase in total single-family residential (SFR) loan volume and a 39 percent increase in non-SFR loan volume from the first quarter of 2001.
``Washington Mutual has entered 2002 on a very solid note,'' said Kerry Killinger, the company's chairman, president and CEO. ``We are extremely proud of our first quarter results and everything that our employees have accomplished. We look forward to continuing to profitably grow our national franchises while creating value for our shareholders over the long term.''
BOARD OF DIRECTORS INCREASES DIVIDEND
Based on the company's continued strong operating fundamentals and financial performance, Washington Mutual's Board of Directors declared a cash dividend of 26 cents per share on the company's common stock, up from 25 cents per share in the previous quarter. Dividends on the common stock are payable May 15, 2002 to shareholders of record as of April 30, 2002. The board also declared a $0.90625 dividend on Washington Mutual's Series H Preferred Stock which, together with a related purchase contract adjustment payment of $0.09375, will result in an aggregate payment of $1.00 on each unit of the company's Premium Income Equity Securities (PIES). These amounts are payable on May 16, 2002, to shareholders of record as of May 15, 2002.
FIRST QUARTER RESULTS
Net Interest and Noninterest Income
A favorable net interest margin and the addition of the previously mentioned acquisitions helped fuel an increase in net interest income of 76 percent to $2.40 billion in the first quarter of 2002 versus $1.36 billion a year earlier.
The net interest spread for the quarter was 3.60 percent, compared with 2.29 percent for the same period last year. The margin was 3.74 percent in the most recent quarter versus 2.65 percent in the first quarter of 2001.
Depositor and other retail banking fees were a record $361 million, up 29 percent from $279 million a year earlier. Much of this increase in banking fees was the result of a much higher base of retail checking accounts year over year. During the most recent quarter, retail checking accounts grew on a net basis by 686,444, which included 358,846 checking accounts acquired from Dime. Additionally, Washington Mutual's new Platinum Checking accounts added significantly to the net increase in the number of retail checking accounts.
Although mortgage rates trended slightly upward as the first quarter progressed, fixed-rate SFR loan volume remained strong. This led to a strong gain from SFR mortgage loans of $231 million, compared with fourth quarter's record gain of $287 million.
During the quarter, the company recorded an increase in mortgage servicing rights (MSR) of $1.71 billion, reflecting the acquisition of Dime, strong loan origination volume and slightly lower loan pay-off volume.
Lending
Washington Mutual's substantial loan origination capacity, enhanced by recent acquisitions produced total loan volume of $65.27 billion for the quarter, up 10 percent from $59.12 billion in the fourth quarter of 2001.
Total SFR loan volume was $59.16 billion, up 8 percent from $54.83 billion in the fourth quarter of 2001. The increase was a result of a 29 percent increase in adjustable-rate mortgage volume over the fourth quarter. Non-SFR volume totaled a record $6.11 billion for the most recent quarter, up 42 percent from the fourth quarter volume of $4.29 billion.
Efficiency Ratio
The efficiency ratio (defined as total noninterest expense, excluding amortization of goodwill in prior periods and other intangible assets, as a percentage of net interest income, noninterest income and the extraordinary item) was 46.96 percent in the most recent quarter compared with 46.33 percent in the first quarter of last year. The efficiency ratio, while up slightly from the previous quarter's 44.99 percent, reflected the additions of the former Dime and HomeSide operations, which are in the early stages of their integrations into Washington Mutual.
Noninterest expense totaled $1.53 billion in the first quarter of 2002, which is higher than $1.01 billion in the previous year principally because of the company's acquisitions.
Credit Quality Remains Steady
Killinger said that credit quality, a key focus for Washington Mutual, remains solid and in line with the company's expectations. Although nonperforming assets (NPAs) increased from the previous quarter, the rate of growth in NPAs appears to be decreasing from its high during the second half of 2001 due to the recovering national economy and continued strong housing demand.
During the quarter, NPAs increased by $399 million to $2.78 billion at March 31, 2002, but reflected the addition of $108 million of NPAs from the former Dime. Excluding Dime, the increase in NPAs was $291 million in the first quarter of 2002, down from the increase of $349 million in fourth quarter of 2001. NPAs represented 1.01 percent of total assets at March 31, 2002.
Reflecting the company's current view that growth in the NPAs may have peaked in previous quarters, the provision for loan and lease losses was $175 million, versus $200 million in the fourth quarter of 2001. Net loan charge offs for the first quarter were $99 million, holding steady with the fourth quarter level of $97 million. However, net loan charge offs as a percentage of average loans improved from 0.25 percent in the fourth quarter of 2001 to 0.23 percent at March 31, 2002.
``Given Washington Mutual's credit risk profile, which is heavily weighted toward single-family residential mortgages, management believes it is adequately reserved,'' Killinger added.
Balance Sheet and Capital Management
Consolidated assets at March 31, 2002 were $275.22 billion, compared with $242.51 billion at Dec. 31, 2001. The acquisitions during the first quarter added approximately $32.60 billion of assets to Washington Mutual's balance sheet.
At March 31, 2002, balances of transaction deposits, including checking, savings and money market deposits, represented 68 percent of total deposits, compared with 66 percent at Dec. 31, 2001. Total deposits were $129.01 billion at the end of the first quarter, up from $107.18 billion at Dec. 31, 2001. The company's recent acquisitions contributed approximately 70 percent of this growth, while organic growth contributed 30 percent.
Stockholders' equity at March 31, 2002 was $18.13 billion, or 6.6 percent of consolidated assets at March 31, 2002. In addition, the capital ratios of the company's banking subsidiaries continued to exceed federal regulatory requirements for classification as ``well-capitalized'' institutions, the highest regulatory standard.
Company Updates
The company announced today that Denver, Colorado has been selected as the newest site for its innovative Occasio financial stores. Washington Mutual will complement its existing mortgage lending presence in the Greater Denver area with up to 30 financial stores. The first 20 stores are scheduled to open this year.
Earlier, Washington Mutual announced plans to open up to 40 Occasio financial stores in the Greater New York area over the next year, extending its existing branch network of more than 120 retail financial centers in the market and complementing its strong mortgage position in New York/New Jersey.
The company recently converted the loan servicing records of the former mortgage operations of Fleet Financial, Inc. While a few post-conversion activities remain to be completed, the company said it anticipates a successful integration.
Outlook
``We expect to deliver another year of strong profitability in 2002,'' Killinger said. ``While it appears that the net interest margin will likely trend toward a more normalized level as the year progresses, we anticipate that the solid business fundamentals that exist in all of our key businesses will produce another successful year.'' |
