WaMu Reports Fourth Quarter Net Loss Per Share of $2.19, Reflecting Previously Announced After-Tax Charge to Writedown Home Loans Goodwill of $1.6 Billion and Elevated Loan Loss Provisioning
Published January 20th, 2008
WaMu (NYSE:WM) today announced a fourth quarter 2007 net loss of $1.87 billion, or $2.19 per diluted share. The company attributed the loss to the $1.6 billion after-tax charge to writedown Home Loans goodwill and the higher level of provisioning stemming from the housing market weakness. Due to fourth quarter results, the company recorded a net loss of $67 million, or $0.12 per diluted share, for all of 2007.
“We announced in December a series of proactive steps being taken to manage through the unprecedented market conditions that this company and others in the financial services industry face,” said WaMu Chairman and Chief Executive Officer Kerry Killinger.
“These actions included:
The raising of $2.9 billion in net proceeds through the issuance of convertible preferred stock that increased the year-end tangible capital to tangible asset ratio to 6.67 percent, $3.7 billion above the company’s targeted ratio of 5.50 percent.
A reduction in the quarterly cash dividend rate on the company’s common stock to 15 cents per share.
A major expense reduction initiative projected to reduce 2008 noninterest expense by $500 million to $8.0 billion or less.
A significant acceleration in the strategic focus of our Home Loans business that emphasizes mortgage lending through our retail banking stores and other retail distribution channels.
The substantial infusion of new capital, dividend reduction, significant expense reductions, and the major change in our home loans business all combine to further fortify WaMu’s strong capital and liquidity position.”
Killinger added that the Retail Banking, Card Services and Commercial businesses delivered steady performance in 2007. In particular, the Retail Bank, which is the cornerstone of the franchise, continued its strong growth opening more than 1.1 million net new checking accounts for the year. The company plans to continue to leverage the Retail Bank’s distribution network by opening additional stores and adding more than 1 million net new checking accounts in 2008.
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