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Golden State Bancorp Announces Third Quarter 1998 Results
SAN FRANCISCO, Oct. 22, 1998--Golden State Bancorp Inc.
(NYSE:GSB), the parent company of California Federal Bank, today
reported operating earnings of $22.2 million, or $0.30 per diluted
share, for the 1998 third quarter ended September 30, 1998. Cash
earnings per diluted share for the 1998 third quarter, which exclude
the expense associated with the amortization of goodwill, were $0.48
on an operating basis.
Before an extraordinary item of $80 million related to the early
reduction of debt in certain refinancing transactions discussed below,
net earnings for the 1998 third quarter were $47.8 million, or $0.62
per diluted share, compared with net earnings of $33.0 million, or
$0.58 per diluted share in the 1997 third quarter. After the
extraordinary item, the net loss for the 1998 third quarter was $32.2
million, or $0.44 per diluted share. The refinancing transactions
completed to date are expected to result in an annual pre-tax interest
and dividend savings in excess of $55 million.
Gerald J. Ford, chairman and chief executive officer of Golden
State, commented, "These results are fully in line with our
expectations. Operating fundamentals in the quarter were strong and
credit quality continued to improve, reflecting a strong economy in
California. Meanwhile, the integration of Glendale Federal is underway
and proceeding according to schedule."
During the 1998 third quarter, Golden State completed several
significant transactions that were designed to enhance shareholder
value. On September 11, 1998, the company completed its merger with
First Nationwide (Parent) Holdings, Inc., to create the largest thrift
based in California and the second-largest thrift in the nation. The
merger was accounted for as a purchase of Golden State and Glendale
Federal by First Nationwide. Pre-tax charges related to the merger in
the 1998 third quarter were $31.1 million. First Nationwide also sold
its Florida deposit franchise in the 1998 third quarter, resulting in
a pre-tax gain of $108.9 million.
In addition, a newly-formed subsidiary of Golden State issued $2
billion in debt securities in the quarter to fund a series of
refinancing transactions that included offers to purchase $473 million
of preferred stock of California Federal Bank and $915 million of
long-term notes, and a redemption of $455 million of senior notes. As
of September 30, 1998, $939.9 million of these instruments had been
purchased or redeemed, resulting in an after-tax charge in the 1998
third quarter of $99.5 million, of which $80.0 million was recorded as
an extraordinary item.
Golden State reported net earnings for the nine months ended
September 30, 1998, of $303.0 million, or $4.87 per diluted share,
compared with $64.3 million, or $1.13 per diluted share, for the same
period last year. In addition to the non-recurring items that were
recorded in the 1998 third quarter, the 1998 nine-month results
included a deferred tax benefit of $250 million resulting from a
reduction in the bank's valuation allowance related to its deferred
tax asset.
Excluding non-recurring items, earnings from operations in the
1998 nine-month period were $108.0 million, or $1.73 per diluted
share. |
