MADISON, Wis., Feb. 17, 2009 (GLOBE NEWSWIRE) -- Anchor BanCorp Wisconsin Inc. (Nasdaq:ABCW) today announced a net loss of $167.3 million, or $7.96 per share, for the three months ended December 31, 2008. This compares to net income for the same quarter of the previous fiscal year of $6.3 million, or $0.30 per share. The decrease primarily results from a combination of a $72.2 million goodwill impairment, a $93.3 million provision for loan losses and a $36.5 million non-cash valuation allowance against deferred tax assets. For the nine months ended December 31, 2008, the net loss is $185.0 million versus income of $25.5 million for the same period last year.
Specific Charges Drive Increase in Non-Interest Expenses
Non-interest expenses increased to $118.2 million for the third fiscal quarter, up from $25.1 million the previous year, an increase of $93.1 million. Approximately 78 percent of this increase was due to a non-cash, non-tax charge of $72.2 million of goodwill impairment. Tangible capital levels, tangible book value per share, regulatory capital ratios and liquidity were unaffected by this adjustment.
Net expenses from Other Real Estate Owned operations increased by $7.8 million as a result of additional carrying costs and an additional decline in the value of certain properties. An impairment expense of $4.6 million was recorded to decrease the carrying value of certain development property held. Combined, these two factors accounted for approximately 13.3 percent of the increase in non-interest expenses.
Income Tax Provision (Credit)
The Company reported a third quarter 2008 income tax credit of $1.9 million against a pre-tax loss of $169.2 million. This relatively small income tax benefit results from a combination of the non-deductible nature of the goodwill impairment charge and a $36.5 million non-cash valuation allowance against deferred tax assets.
Loan Loss Provisions Increased
Loan loss provisions were $93.0 million during the quarter ended December 31, 2008, compared with $7.8 million for the same period a year ago. Charge-offs amounted to $35.2 million during the third fiscal quarter versus $1.1 million for the same period a year ago.
Total non-performing assets (nonaccrual loans, loans past due more than ninety days and other real estate) increased $56.9 million, or 52.0 percent, to $166.4 million at December 31, 2008 from $109.5 million at March 31, 2008, and total non-accrual loans increased $19.1 million, or 18.9 percent to $120.4 million at December 31, 2008 from $101.2 million at March 31, 2008.
"We continue to be impacted by the deteriorating real estate environment, in particular the construction, land and development sectors, and are acting accordingly by increasing reserves," said Douglas J. Timmerman, President and CEO. "Our significant increase in reserves against potential loan losses is indicative of both the depth of the current recession across the economy and the impact being felt by us and many other financial institutions," said Timmerman. "We continue to dedicate substantial time, effort and staff resources to working with our customers who have troubled assets to resolve their situation," added Timmerman.
"As a result of these changes in the market, we continue to scale back on the real estate development front and have restructured our commercial credit division to provide additional analysis and controls into the commercial loan approval process. We have also refocused our efforts toward AnchorBank's robust owner-occupied residential lending portfolio, which given our community banking roots, has always been a cornerstone of our business," said Timmerman.
Other Key Third Quarter Results
* Cost of funds continued to improve, down 120 basis points for the quarter versus the same period last year and down 105 basis points fiscal year to date versus the first nine months of fiscal year 2008. * Interest rate spread increased 21 basis points for the quarter versus the same period last year. * Total assets increased 1.5 percent to $4.8 billion as of December 31, 2008, versus 2007. * Deposits increased 8.5 percent to $3.4 billion as of December 31, 2008, versus 2007. * Deposit account based fee income rose 24.3 percent to $4.0 million for the quarter ended December 31, 2008, versus 2007.
About Anchor BanCorp Wisconsin, Inc.
Anchor BanCorp's stock is traded on the NASDAQ exchange under the symbol ABCW. AnchorBank fsb, the wholly-owned subsidiary, has 74 full service offices and two loan origination only offices. All are located in Wisconsin.
For More Information
For more information, contact Dale Ringgenberg, CFO, at (608) 252-1810, Mark D. Timmerman, President and CEO of AnchorBank at (608) 252-8784, or Douglas J. Timmerman, President, Chairman and CEO of Anchor BanCorp Wisconsin, at (608) 252-8782.
Forward-Looking Statements
This news release contains certain forward-looking statements based on unaudited financial statements, results of operations and business of Anchor BanCorp. Forward-looking statements are subject to various factors which could cause actual results to differ materially from these estimates. These factors include changes in general economic conditions, deposit flows, loan demand, asset quality, competition, legislation or regulation and accounting principles, policies or guidelines affecting reports filed with the Securities and Exchange Commission for financial and business information regarding Anchor BanCorp, including information which could affect Anchor BanCorp's forward-looking statements.
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ANCHOR BANCORP WISCONSIN INC.
FINANCIAL HIGHLIGHTS
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(Dollars in thousands - except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
------------------ ------------------
2008 2007 2008 2007
------------------ ------------------
Operations Data:
Net interest income $ 32,707 $ 31,338 $ 96,082 $ 93,939
Provision for loan losses 92,970 7,792 149,334 12,158
Net gain (loss) on
sale of loans (228) 1,468 2,823 3,160
Real estate investment
partnership revenue 1,836 1,012 1,836 8,166
Other non-interest income 7,905 9,430 24,910 25,453
Real estate investment
partnership cost of sales 1,191 932 1,191 7,941
Other non-interest expense 117,066 24,180 174,024 68,677
Minority interest in income
(loss) of consolidated real
estate partnership operations 150 (81) 98 (359)
Income (loss) before
income taxes (169,157) 10,425 (198,996) 42,301
Income taxes (1,899) 4,096 (13,951) 16,812
Net income (loss) (167,258) 6,329 (185,045) 25,489
Selected Financial Ratios (1):
Yield on earning assets 5.69% 6.68% 5.78% 6.79%
Cost of funds 2.81 4.01 3.01 4.06
Interest rate spread 2.88 2.67 2.77 2.73
Net interest margin 2.88 2.83 2.79 2.88
Return on average assets (13.72) 0.54 (5.01) 0.74
Return on average equity (242.66) 7.44 (77.80) 10.06
Average equity to
average assets 5.66 7.31 6.44 7.40
Non-interest expense
to average assets 9.70 2.16 4.74 2.24
Per Share:
Basic earnings per share $ (7.96) $ 0.30 $ (8.82) $ 1.22
Diluted earnings per share (7.96) 0.30 (8.82) 1.21
Dividends per share 0.01 0.18 0.29 0.53
Book value per share 6.80 15.98 6.80 15.98
December 31,
---------------------- Percent
2008 2007 Change
---------------------- ----------
Financial Condition:
Total assets $4,798,847 $4,725,773 1.5%
Loans receivable, net
Held for sale 32,139 6,170 420.9
Held for investment 3,948,065 3,941,891 0.2
Investment securities available
for sale, at fair value 75,657 146,496 (48.4)
Mortgage-related securities
available for sale,
at fair value 280,014 270,528 3.5
Mortgage-related securities held
to maturity, at amortized cost 52 62 (16.1)
Deposits 3,413,449 3,145,551 8.5
Borrowings 1,152,112 1,150,914 0.1
Stockholders' equity 146,662 341,084 (57.0)
Allowance for loan losses 122,571 28,761 326.2
Non-performing assets 166,382 87,002 91.2
--------------------------------
(1) Annualized when appropriate.
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ANCHOR BANCORP WISCONSIN INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
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December 31, March 31,
2008 2008
(Unaudited)
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(In Thousands)
Assets
Cash and cash equivalents $ 153,224 $ 257,743
Investment securities available for sale,
at fair value 75,657 87,036
Mortgage-related securities available
for sale, at fair value 280,014 269,370
Mortgage-related securities held to maturity,
at amortized cost 52 59
Loans receivable, net
Held for sale 32,139 9,669
Held for investment 3,948,065 4,202,833
Foreclosed properties and repossessed
assets, net 46,026 8,247
Real estate held for development and sale 54,590 59,002
Office properties and equipment 46,825 47,916
Deferred tax asset, net of valuation allowance 13,218 3,760
Other assets 149,037 203,922
---------- ----------
Total assets $4,798,847 $5,149,557
========== ==========
Liabilities and Stockholders' Equity
Deposits
Non-interest bearing $ 257,946 $ 280,897
Interest bearing 3,155,503 3,259,097
---------- ----------
Total deposits 3,413,449 3,539,994
Short-term borrowings 216,300 232,289
Long-term borrowings 935,812 974,472
Other liabilities 80,446 51,605
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Total liabilities 4,646,007 4,798,360
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Minority interest in real estate partnerships 6,178 6,081
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Preferred stock, $.10 par value,
5,000,000 shares authorized,
none outstanding -- --
Common stock, $.10 par value,
100,000,000 shares authorized,
25,363,339 shares issued 2,536 2,536
Additional paid-in capital 72,265 72,300
Retained earnings, substantially restricted 179,998 374,593
Accumulated other comprehensive income (loss) (7,587) 1,864
Treasury stock (3,806,177 shares and 4,015,169
shares, respectively), at cost (95,090) (100,930)
Deferred compensation obligation (5,460) (5,247)
---------- ----------
Total stockholders' equity 146,662 345,116
---------- ----------
Total liabilities, minority interest
and stockholders' equity $4,798,847 $5,149,557
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ANCHOR BANCORP WISCONSIN INC.
CONSOLIDATED STATEMENTS OF INCOME
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(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
2008 2007 2008 2007
-------------------- --------------------
(In Thousands - except per share amounts)
Interest income:
Loans $ 60,042 $ 68,732 $ 185,203 $ 206,477
Mortgage-related
securities 3,743 3,143 11,099 9,177
Investment securities 818 1,060 2,398 3,619
Interest-bearing deposits 70 1,102 469 2,134
--------- --------- --------- ---------
Total interest income 64,673 74,037 199,169 221,407
Interest expense:
Deposits 21,602 31,036 72,342 93,906
Short-term borrowings 2,471 8,048 6,566 23,180
Long-term borrowings 7,893 3,615 24,179 10,382
--------- --------- --------- ---------
Total interest expense 31,966 42,699 103,087 127,468
--------- --------- --------- ---------
Net interest income 32,707 31,338 96,082 93,939
Provision for loan losses 92,970 7,792 149,334 12,158
--------- --------- --------- ---------
Net interest income
after provision for
loan losses (60,263) 23,546 (53,252) 81,781
Non-interest income:
Real estate investment
partnership revenue 1,836 1,012 1,836 8,166
Loan servicing income 1,244 1,380 3,859 4,235
Credit enhancement income 481 426 1,377 1,271
Service charges on deposits 3,966 3,191 11,959 9,430
Investment and insurance
commissions 971 1,016 3,225 3,056
Net gain (loss) on
sale of loans (228) 1,468 2,823 3,160
Net gain (loss) on sale or
impairment of investments
and mortgage-related
securities (1,396) -- (3,298) 15
Other revenue from real
estate partnership
operations 1,707 2,750 4,212 4,965
Other 932 667 3,576 2,481
--------- --------- --------- ---------
Total non-interest
income 9,513 11,910 29,569 36,779
Non-interest expense:
Compensation 13,755 11,358 41,727 33,929
Real estate investment
partnership cost of sales 1,191 932 1,191 7,941
Occupancy 2,328 1,882 7,302 5,756
Furniture and equipment 2,189 1,626 6,382 4,650
Data processing 1,858 1,510 5,493 4,518
Marketing 727 1,086 2,055 3,256
Other expenses from real
estate partnership
operations 7,170 2,894 11,085 6,776
Net expense -
REO operations 8,038 272 10,179 701
Mortgage servicing rights
impairment 2,535 -- 2,535 (709)
Goodwill impairment 72,181 -- 72,181 --
Other 6,285 3,552 15,085 9,800
--------- --------- --------- ---------
Total non-interest
expense 118,257 25,112 175,215 76,618
--------- --------- --------- ---------
Minority interest in
income (loss) of
consolidated real estate
partnership operations 150 (81) 98 (359)
--------- --------- --------- ---------
Income (loss) before
income taxes (169,157) 10,425 (198,996) 42,301
Income taxes (1,899) 4,096 (13,951) 16,812
--------- --------- --------- ---------
Net income (loss) $(167,258) $ 6,329 $(185,045) $ 25,489
========= ========= ========= =========
Earnings per share:
Basic $ (7.96) $ 0.30 $ (8.82) $ 1.22
Diluted (7.96) 0.30 (8.82) 1.21