Current Report

Table of Contents

 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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): February 5, 2007
Wauwatosa Holdings, Inc.
(Exact name of registrant as specified in its charter)
         
Wisconsin   000-51507   20-3598485
         
(State or other jurisdiction   (Commission   (I.R.S. Employer
of incorporation)   File Number)   Identification No.)
         
       
11200 W Plank Ct, Wauwatosa, Wisconsin       53226
         
(Address of principal executive offices)       (Zip Code)
Registrant’s telephone number, including area code: 414-761-1000
Not Applicable
Former name or former address, if changed since last report
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:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

TABLE OF CONTENTS

Item 2.02 Results of Operations and Financial Condition
Item 9.01 Financial Statements and Exhibits
SIGNATURES
Exhibit Index
Press Release

Table of Contents

Item 2.02 Results of Operations and Financial Condition.
On February 5, 2007, Wauwatosa Holdings, Inc. issued a press release announcing its results of operations for the quarter and year ended December 31, 2006. A copy of the press release is being furnished to the Commission as Exhibit 99.1 attached to this report and incorporated by reference.
Item 9.01 Financial Statements and Exhibits.
The following is furnished as an Exhibit to this report.
Exhibit No. 99.1
Press Release of Wauwatosa Holdings, Inc., dated February 5, 2007.

 

Table of Contents

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.
         
  Wauwatosa Holdings, Inc.
  		 
February 5, 2007   By:   Richard C. Larson    
    Name:   Richard C. Larson    
    Title:   Chief Financial Officer    

 

Table of Contents

         
Exhibit Index
     
Exhibit No.   Description
99.1
  Press Release of Wauwatosa Holdings, Inc., dated February 5, 2007.

 


 

Exhibit 99.1
Wauwatosa Holdings, Inc. Announces Results of Operations for the Fourth Quarter and Year Ended December 31, 2006.
WAUWATOSA, WI – 02/05/2007– Wauwatosa Holdings, Inc. (NASDAQ: WAUW) reported 2006 fourth quarter net income of $2.3 million, or $0.07 per share, as compared to a loss of $709,000, or a loss of $0.02 per share in the fourth quarter of 2005. Net income for the year ended December 31, 2006 was $8.1 million, or $0.24 per share, as compared to $6.0 million for the 12 months ended December 31, 2005.
Effective October 4, 2005, Wauwatosa Savings Bank completed its reorganization into a mutual holding company and concurrently Wauwatosa Holdings, Inc. completed its initial public offering of common stock. On November 15, 2005, Wauwatosa Holdings announced that it had changed its fiscal year-end from June 30 to December 31. As a result, operating data for the 12 months ended December 31, 2005 has not been previously reported and per share data for the period is not applicable.
The single most significant difference between fourth quarter 2006 and fourth quarter 2005 operating results is the contribution of 556,442 shares of Wauwatosa Holdings, Inc. common stock to the Waukesha County Community Foundation, Inc. in connection with the October 2005 reorganization. This charitable contribution totaled $5.6 million and was expensed in the fourth quarter of 2005. There was no contribution expense in 2006.
Net interest income decreased $1.3 million, or 12.2% for the three months ended December 31, 2006 compared to the same three months in 2005. This is in spite of a 9.1% increase in average earning assets for the fourth quarter of 2006 versus 2005. The interest rate spread for the fourth quarter of 2006 was 1.85% compared to 2.34% for the fourth quarter of 2005. It is anticipated that the interest rate spread will continue to decline during 2007 as our cost of funding continues to increase more rapidly than the yield on our interest-earning assets. As Wauwatosa Holdings is dependent upon net interest income for approximately 85% of its total revenue, a continued decline in the interest rate spread will significantly impact net income.

 

 

Wauwatosa Savings Bank acquired Waterstone Mortgage Corporation, a mortgage broker, in the first quarter of 2006. As a result, other income for the fourth quarter includes $357,000 in mortgage banking income, while there was no comparable income in 2005. In addition, the Wauwatosa Holdings, Inc. 2006 fourth quarter loan loss provision was $468,000 less than that of the fourth quarter of 2005, a 56.7% decline. This is in contrast to an increase in the loan loss provision for the year ended December 31, 2006 to $2.2 million from $1.9 million for the 12 months ended December 31, 2005, a 15.3% increase. Net charge-offs for the fourth quarter of 2006 were $255,000, or 0.02% of total average loans outstanding during the quarter and $381,000 in 2005, or 0.03% of total average loans in the comparable prior period. At December 31, 2006, the allowance for loan losses was 0.52% of total loans compared to 0.40% at December 31, 2005. Nonperforming loans were 2.10% of total loans at December 31, 2006 and 1.39% at December 31, 2005.
Assets at year-end totaled $1.6 billion compared to $1.5 billion at December 31, 2005. Book value per share was $7.29 on December 31, 2006 compared to $7.01 on the same date in 2005. Total net loans receivable were $1.4 billion at the end of 2006 and $1.3 billion on December 31, 2005.
Cautionary Statements
The discussions in this news release which are not historical statements contain forward-looking statements that involve risk and uncertainties. Statements which are not historical statements include those in the future tense or which use terms such as “believe,” “expect,” and “anticipate.” Wauwatosa Holdings, Inc. actual future results could differ in important and material ways from those discussed. Many factors could cause or contribute to such differences. These factors include changing interest rates and related yield curves, changes in demand for loans or other services, competition from other institutions, actual verses estimated loan loss experience, other general economic and political developments, plus factors discussed in our filings with the Securities and Exchange Commission.

 

 

WAUWATOSA HOLDINGS, INC.
FINANCIAL HIGHLIGHTS
                                 
    Three months ended   Years ended
    December 31,   December 31,
    2006   2005   2006   2005
    (Unaudited)   (Unaudited)
    (In thousands except ratios and per share data)
Operations Data:
                               
Net interest income
  $ 9,623     $ 10,959     $ 38,449     $ 40,199  
Provision for loan losses
    358       826       2,201       1,909  
Noninterest income
    1,289       1,267       5,202       3,526  
Noninterest expense
    6,944       12,578       28,698       29,646  
Income (loss) before income taxes
    3,610       (1,178 )     12,752       12,170  
Income tax expense (benefit)
    1,326       (469 )     4,699       6,127  
Net income (loss)
    2,284       (709 )     8,053       6,043  
 
                               
Selected Financial Ratios:
                               
Yield on earning assets
    6.12 %     5.81 %     6.03 %     5.84 %
Cost of funds
    4.27       3.47       4.03       3.28  
Interest rate spread
    1.85       2.34       2.00       2.56  
Return (loss) on average assets
    0.54       (0.18 )     0.50       0.43  
Return (loss) on average equity
    3.77       (1.39 )     3.41       4.52  
Average equity to average assets
    14.35       13.27       14.79       9.41  
Non-interest expense to average assets
    1.65       3.27       1.80       2.09  
Allowance for loan losses to total loans outstanding
    0.52       0.40       0.52       0.40  
 
                               
Per Share:
                               
Basic earnings (loss) per share
  $ 0.07     $ (0.02 )   $ 0.24       n/a  
Diluted earnings (loss) per share
    0.07       (0.02 )     0.24       n/a  
Book value per share
    7.29       7.01       7.29     $ 7.01  
Weighted average shares outstanding
    33,105,046       33,135,424       33,076,565       n/a  
Shares outstanding at December 31
    33,114,539       33,038,385       33,114,539       33,038,385  
                         
    December 31,   Percent
    2006   2005   Change
    (Unaudited)    
    (Dollars in thousands)
Financial Condition:
                       
Total assets
  $ 1,648,470     $ 1,511,209       9.1 %
Loans receivable, net
    1,365,712       1,300,768       5.0  
Securities available for sale
    117,330       121,955       (3.8 )
Deposits
    1,036,218       1,045,593       (0.9 )
Borrowings
    334,003       201,212       66.0  
Total equity
    241,272       231,696       4.1  
Allowance for loan losses
    7,195       5,250       37.0  
Non-performing assets
    29,408       18,280       60.9  

 

 

WAUWATOSA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
                                 
    Three months ended     Years ended  
    December 31,     December 31,  
    2006     2005     2006     2005  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  
    (In thousands except per share data)  
Interest income:
                               
Loans
  $ 21,509     $ 19,599     $ 83,822     $ 74,020  
Mortgage-related securities
    1,207       913       4,263       2,466  
Debt securities, federal funds sold and short-term investments
    1,971       974       4,143       3,250  
 
                       
Total interest income
    24,687       21,486       92,228       79,736  
 
                       
Interest expense:
                               
Deposits
    11,281       8,975       42,038       35,468  
Borrowings
    3,783       1,552       11,741       4,069  
 
                       
Total interest expense
    15,064       10,527       53,779       39,537  
 
                       
Net interest income
    9,623       10,959       38,449       40,199  
Provision for loan losses
    358       826       2,201       1,909  
 
                       
 
                               
Net interest income after provision for loan losses
    9,265       10,133       36,248       38,290  
 
                       
Noninterest income:
                               
Service charges on loans and deposits
    520       629       2,021       1,745  
Increase in cash surrender value of life insurance
    180       151       1,055       805  
Gain (loss) on sale of securities
    (35 )     —       (819 )     12  
Mortgage banking income
    357       —       2,109       —  
Other
    267       487       836       964  
 
                       
Total noninterest income
    1,289       1,267       5,202       3,526  
 
                       
Noninterest expenses:
                               
Compensation, payroll taxes, and other employee benefits
    3,715       4,376       16,209       13,133  
Occupancy, office furniture, and equipment
    1,168       966       4,304       3,571  
Advertising
    423       353       1,369       1,355  
Data processing
    229       490       1,730       1,412  
Charitable contributions
    —       5,122       —       5,685  
Communications expense
    232       142       700       619  
Professional Fees
    450       409       1,243       926  
Other
    727       720       3,143       2,945  
 
                       
Total noninterest expenses
    6,944       12,578       28,698       29,646  
 
                       
Income (loss) before income taxes
    3,610       (1,178 )     12,752       12,170  
Income tax expense (benefit)
    1,326       (469 )     4,699       6,127  
 
                       
Net income (loss)
  $ 2,284     $ (709 )   $ 8,053     $ 6,043  
 
                       
Basic earnings (loss) per share
  $ 0.07     $ (0.02 )     0.24       n/a  
Diluted earnings (loss) per share
  $ 0.07     $ (0.02 )     0.24       n/a  

 

 

WAUWATOSA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                 
    December 31,  
    2006     2005  
    (Dollars in thousands)  
    (Unaudited)          
Assets
               
Cash
  $ 26,745     $ 8,761  
Federal funds sold
    19,458       5,388  
Short term investments
    27,604       2,349  
 
           
Cash and cash equivalents
    73,807       16,498  
 
               
Securities available-for-sale (at fair value):
    117,330       121,955  
Loans held for sale
    5,387       —  
Loans receivable
    1,372,907       1,306,018  
Allowance for loan losses
    (7,195 )     (5,250 )
 
           
Loans receivable, net
    1,365,712       1,300,768  
 
               
Office properties and equipment, net
    32,625       25,022  
Federal Home Loan Bank stock, at cost
    17,213       14,406  
Cash surrender value of life insurance
    24,152       22,792  
Prepaid expenses and other assets
    12,244       9,768  
 
           
Total assets
  $ 1,648,470       1,511,209  
 
           
 
               
Liabilities and Shareholders’ Equity
               
Liabilities:
               
Demand deposits
  $ 58,407     $ 82,290  
Money market and savings deposits
    94,472       33,565  
Time deposits
    883,339       929,738  
 
           
Total deposits
    1,036,218       1,045,593  
Federal Home Loan Bank advances short-term
    41,224       87,209  
Federal Home Loan Bank advances long-term
    292,779       114,003  
Advance payments by borrowers for taxes
    190       181  
Other liabilities
    36,787       32,527  
 
           
Total liabilities
    1,407,198       1,279,513  
Shareholders’ equity:
               
Common Stock (par value — $.01; 200,000,000 shares authorized; 33,723,750 shares issued; 33,076,565 and 33,038,385 shares outstanding 2006 and 2005)
    337       337  
Additional Paid-In Capital
    104,182       103,859  
Accumulated other comprehensive loss (net of taxes)
    (1,225 )     (1,571 )
Retained earnings, substantially restricted
    144,809       136,756  
Unearned ESOP shares
    (6,831 )     (7,685 )
 
           
Total shareholders’ equity
    241,272       231,696  
 
           
Total liabilities and shareholders’ equity
  $ 1,648,470       1,511,209