LOS ANGELES - Washington Mutual Savings Bank is planning an offering of common and preferred shares soon to raise the $150 million to $200 million it for its planned acquisition of Pacific First Bank, the thrift's chairman and chief executive, Kerry Killinger, said in an interview.
"We want to raise the money sooner rather than later and definitely not just before the closing," he said. Washington Mutual, based in Seattle, agreed in October to acquire $6.9 billion in Pacific First assets for $663 million from RT Holdings Inc., a subsidiary of Royal Trustco Ltd.
Many analysts have observed that Washington Mutual gets a valuable franchise without having to take on problem assets.
Cost Reductions Expected
"That's the only way we would have done it," Mr. Killinger said of the company's determination to satisfy its hunger for acquisitions without sacrificing its strong asset quality.
Mr. Killinger expects substantial cost reductions from the acquisition of Pacific First Bank, also based in Seattle. "This will materially add to our franchise and be accretive to earnings," he said.
Some analysts had estimated that the acquisition of Pacific First and Pioneer Savings Bank could eventually increase earnings by 80 cents to $1 a share, he added. The total expected savings could be $45 million to $60 million by 1995.
Structure of Financing
He said the company had not yet decided on the exact composition of its planned financing, but said it would include preferred stock, convertible preferred, and common.
Mr. Killinger noted that the company planned to reduce combined assets by some $2 billion, to $13.6 billion, before the closing.
The bank hopes eventually to increase its dividend payout ratio to between 25% and 30%, from about 18%, the CEO said.