NEWPORT BEACH, Calif., Aug. 15 /PRNewswire-FirstCall/ -- Downey Financial
Corp. (NYSE: DSL) today released monthly selected financial data for the
thirteen months ended July 31, 2008.
Although, as previously reported, Downey experienced elevated levels of
deposit withdrawals in July, deposit flows so far in August have stabilized.
In fact, deposit balances have increased, recovering about 45% of the net
deposit outflow that occurred in July. The bulk of the inflow is in
certificates of deposit with 6 to 18 months duration. This increase was due,
in part, to management's decision to reinstitute deposit advertising following
a long period of not doing so.
Deposits declined by $507 million in July to $9.4 billion at month end,
with the majority of the decline related to uninsured deposit amounts.
Management believes this occurred as a result of depositor concern over
deposit insurance coverage following the failure of a large California
financial institution as well as publicity and speculation regarding Downey
and the performance of its loan portfolio.
'For over 50 years, Downey's number one priority has been to focus on
providing our customers with outstanding service,' said Thomas E. Prince,
interim Chief Executive Officer. 'We are encouraged by our positive
relationships with our valued depositors, and by the stabilization we have
seen in deposit activity this month.'
Borrowings increased by $1.3 billion in July. The increase was
necessitated, in part, by the decline in deposits. The balance of the increase
was used primarily to increase cash and short-term liquid assets to meet
potential liquidity needs, with those assets increasing $653 million in July.
Provided deposit flows remain stable with withdrawals at historic levels,
Downey believes its current sources of funds are adequate to meet its
obligations while maintaining liquidity at appropriate levels.
Non-performing assets increased 3% during July, the lowest monthly
increase this year. Due to an increase in total assets during July, the ratio
of non-performing assets to assets declined from 15.50% at June 30, 2008, to
15.08%. During July, the amount of performing troubled debt restructurings
declined as the amount removed from non-accrual status due to six consecutive
months of timely loan payments exceeded the amount of loans newly modified. In
addition, sales of real estate acquired in the settlement of loans increased
almost 50% from June's level, while the number of new homes obtained from
foreclosure declined 6%.
Downey Financial Corp. is the parent company of Downey Savings and Loan
Association, F.A., with assets of $13.4 billion and 169 branches throughout
California and five in Arizona.
DOWNEY FINANCIAL CORP. AND SUBSIDIARIES
Monthly Selected Financial Data (Unaudited)
(Dollars in Thousands)
Jul. 31, Jun. 30, May 31, Apr.
