The Washington Savings Bank, F.S.B. Announces Unfavorable
Operating Trends and an Increase in Loan Losses Reserves
BOWIE, Md., May 6 /PRNewswire-FirstCall/ -- The Washington Savings Bank,
F.S.B. (AMEX:WSB), a federally chartered, FDIC insured savings bank, with
principal executive offices in Bowie, Maryland, today announced a number of
developments in anticipation of reporting its results of operations for the
third fiscal quarter ended April 30, 2005. During the quarter, in February the
Bank announced a plan to reduce its concentration in residential construction
lending, primarily through a reduction of non-owner occupied residential
construction. Also during the quarter, in March, the Bank appointed a new
Chief Executive Officer. Under the new management structure, the Bank is in
the midst of a thorough review of its business and operations. Much of this
review and anticipated changes result from regulatory criticism of the Bank's
compliance with the previously announced 2004 supervisory agreement between the
Bank and the Office of Thrift Supervision.
Among the changes management is implementing are changes in the Bank's lending
practices and lending operations. For the quarter ended April 30, 2005,
management intends to take a $2.8MM charge to provision for loan losses due to
unfavorable trends including an increase in internally criticized loans and to
reflect the changes in lending policies and procedures.
The Bank does not provide financial forecasts, however, it expects, in light of
these circumstances, that as it decreases certain categories of construction
lending in its continuing plan of diversification within the loan portfolio as
well as the tightening of credit standards, loan volume may decrease.
Management expects that the Bank's operating performance in the quarter ended
April 30, 2005 and subsequent quarters may compare unfavorably to operating
performance in recent quarters, and that the Bank may not be able to maintain
the growth and profitability experienced in recent quarters. The Bank also
anticipates that operations may be further affected depending on regulatory
actions taken in response to performance to date under the Supervisory
Agreement.
The Board is also evaluating its capital management plan including its dividend
policy. While the Company remains "Well Capitalized" by regulatory standards,
WSB's recent growth rates has resulted in a decline in its capital ratios.
This release contains forward-looking statements within the meaning of and
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. A forward-looking statement encompasses any estimate,
prediction, opinion or statement of belief contained in this release, and the
underlying management assumptions. Forward-looking statements are based on
current expectations and assessments of potential developments affecting market
conditions, interest rates and other economic conditions, and results may
ultimately vary from the statements made in this release. DATASOURCE: The Washington Savings Bank, F.S.B.
CONTACT: Phillip C. Bowman, CEO of The Washington Savings Bank, F.S.B., +1-301-352-3120 Web site: http://www.twsb.com/
|