MADISON, Wis., Nov. 7, 2011 (GLOBE NEWSWIRE) -- Anchor BanCorp Wisconsin Inc. (the "Corporation") today announced a net loss available to common equity of $19.6 million, or $0.92 per common share, for the three months ended September 30, 2011. This compares to a net loss available to common equity of $1.9 million, or $0.09 per common share, and $8.2 million, or $0.38 per common share, for the three months ended September 30, 2010 and June 30, 2011, respectively. Results include an increase in the provision for loan loss over both comparative periods, and a continued elevated level of non-performing assets. For the six months ended September 30, 2011, net loss available to common equity was $27.7 million, compared to $17.4 million for the same period in the prior year.
Financial results for the second quarter ended September 30, 2011, include:
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Total Risk-Based Capital Ratio for the Bank was at 8.15 percent as of September 30, 2011, compared to 8.32 percent at June 30, 2011. Under regulatory requirements, a bank must have a total Risk-Based Capital Ratio of 8.0 percent or greater to be considered adequately capitalized; though the Bank is considered adequately capitalized, the Bank's capital ratios continue to remain below the 12 percent level required under the terms of the Cease and Desist Order issued by the Office of Thrift Supervision ("OTS") on June 26, 2009 (now administered by the Federal Reserve with respect to the Corporation and the Office of the Comptroller of the Currency ("OCC") with respect to the Bank).
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Total assets decreased by $43.4 million, or 1.3% to $3.2 billion at September 30, 2011, compared to June 30, 2011.
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Net interest margin increased to 2.48% for the three months ended September 30, 2011, compared to 2.46% for the same period in the previous year. Yield on earning assets declined by 38 basis points to 4.42% compared to the same period a year ago due to lower yields on loans and investments as well as increased holdings of cash and cash equivalents. Cost of funds declined by 39 basis points to 1.84% during the quarter ending September 30, 2011, compared to the same period in the prior year, primarily due to lower rates of interest paid on deposits and a shift in deposit mix from certificates of deposit to checking and money market accounts.
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Provision for credit losses of $17.1 million increased $6.4 million, or 60.3% from the same period in the previous year (see Credit Quality discussion that follows).
- Total non-interest expense decreased by $1.8 million or 5.2%, compared to the same period in the previous year due to reductions in foreclosed properties and repossessed assets-net expense of $2.6 million, federal deposit insurance premiums of $1.8 million, and legal services of $1.4 million. These reductions were partially offset by a $3.8 million increase in mortgage servicing rights impairment.
Capital Ratios
The Tier 1 (Core) Capital Ratio for the Bank was 4.16 percent at September 30, 2011, compared to 4.44 percent at June 30, 2011. Total Risk-Based Capital Ratio for the Bank was 8.15 percent and 8.32 percent, respectively, for the same periods. Under regulatory requirements, a bank must have a Tier 1 (Core) Capital ratio of 4.0 percent or greater and a total Risk-Based Capital Ratio of 8.0 percent or greater to be considered adequately capitalized. The Bank continues to work toward the requirements of the previously issued Cease and Desist Order that requires Tier 1 (Core) Capital ratio of 8.0 percent and total Risk-Based Capital Ratio of 12.0 percent.
"Although the Bank's capital ratios decreased from the previous quarter, we have continued to make progress on reducing the size of the balance sheet, enhancing asset/liability management, improving asset quality and creating a more efficient operating platform," stated Chris Bauer, President and Chief Executive Officer of the Corporation and the Bank.
The Corporation, as the holding company of the Bank, continues to be burdened with significant senior debt and preferred stock obligations. The Corporation currently owes $116.3 million to various lenders led by U.S. Bank under its credit agreement that matures November 30, 2011. The Corporation also has accrued but unpaid interest and fees totaling $31.7 million associated with this obligation that is due and payable at maturity. The Corporation is currently in the process of negotiating an extension of this agreement with U.S. Bank. In addition, the Corporation issued $110 million in preferred stock in 2009 to the United States Treasury pursuant to the Treasury's Capital Purchase Program ("CPP"). While the Bank has substantial liquidity, it is currently precluded by its regulators from paying dividends to the Corporation. As a result, and as permitted under the CPP program, the Corporation has deferred ten quarterly preferred stock dividend payments to the Treasury totaling $15.6 million. As a result of those deferrals the Treasury had the right to appoint two additional persons to the Corporation's board of directors and, as announced on September 30, 2011, the Treasury has appointed Messrs. Duane Morse and Leonard Rush to the Corporation's Board.
The Corporation has engaged and continues to work with Sandler O'Neill & Partners, L.P. as its financial advisor to assist in capital raising efforts to address its capital needs.
Credit Quality Improvement Efforts Continue
Provision for credit losses for the three months ended September 30, 2011, was $17.1 million, as compared to $10.7 million for the same period in 2010. The increase in provision for credit losses was primarily due to net charge-offs in excess of the provision for loan losses in the prior year period, partially offset by lower levels of non-performing loans which decreased from $350.1 million as of September 30, 2010 to $283.1 million at the end of the current quarter.
Early stage and overall delinquencies began to decline in the third quarter of fiscal 2011. This trend has continued through the second quarter of fiscal 2012. In addition, total non-performing assets decreased $20.9 million, or 5.3 percent, to $376.0 million as of September 30, 2011, from $397.0 million as of March 31, 2011.
Bauer added, "We are encouraged by a favorable trend in early stage and overall delinquencies that began in the third quarter of fiscal 2011. This, coupled with the Bank's ongoing efforts to aggressively work out troubled loans, has led to a steady decline in the level of non-performing assets during the calendar year."
However, this positive trend has been somewhat offset by an elevated level of foreclosed properties on the consolidated balance sheet. The increased level of foreclosed properties compared to this time last year has a direct negative impact on the expenses related to foreclosed properties and repossessed assets due to the high cost of carrying these assets. Total foreclosed properties and repossessed assets were $93.0 million at September 30, 2011, up from $90.7 million at March 31, 2011, and an increase of $32.7 million compared to $60.2 million at September 30, 2010.
About Anchor Bancorp Wisconsin, Inc.
Anchor BanCorp Wisconsin Inc.'s stock is traded on the NASDAQ exchange under the symbol ABCW. AnchorBank fsb (the "Bank"), the wholly owned subsidiary, has 57 offices. All are located in Wisconsin.
Forward-Looking Statements
This news release contains certain forward-looking statements, as that term is defined in the U.S. federal securities laws. In the normal course of business, we, in an effort to help keep our shareholders and the public informed about our operations, may from time to time issue or make certain statements, either in writing or orally, that are or contain forward-looking statements. Generally, these statements relate to business plans or strategies, projected or anticipated benefits from acquisitions or dispositions made by or to be made by us, projections involving anticipated revenues, earnings, liquidity, profitability or other aspects of operating results or other future developments in our affairs or the industry in which we conduct business. Although we believe that the anticipated results or other expectations reflected in our forward-looking statements are based on reasonable assumptions, we can give no assurance that those results or expectations will be attained. You should not put undue reliance on any forward-looking statements. Forward-looking statements speak only as of the date they are made and we undertake no obligation to update them in light of new information or future events, except to the extent required by federal securities laws. Please refer to our Annual Report for the fiscal year ending March 31, 2011 on Form 10-K, as filed with the Securities and Exchange Commission, for a more comprehensive discussion of forward-looking statements and the risks and uncertainties associated with our business.
| ANCHOR BANCORP WISCONSIN INC. | ||||
| FINANCIAL HIGHLIGHTS | ||||
| (Dollars in thousands - except per share amounts) | ||||
| (Unaudited) | ||||
| Three Months Ended | Six Months Ended | |||
| September 30, | September 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Operations Data: | ||||
| Net interest income | $ 18,500 | $ 22,418 | $ 40,020 | $ 41,306 |
| Provision for credit losses | 17,115 | 10,674 | 20,597 | 19,608 |
| Net gain on sale of loans | 3,994 | 9,216 | 5,167 | 10,563 |
| Net gain on sale of investment securities | 5,206 | 6,653 | 6,342 | 6,765 |
| Net gain on sale of branches | -- | 2,318 | -- | 7,248 |
| Other non-interest income | 5,579 | 5,533 | 11,197 | 12,811 |
| Non-interest expense | 32,325 | 34,112 | 63,035 | 69,807 |
| Income (loss) before income taxes | (16,161) | 1,352 | (20,906) | (10,722) |
| Income taxes | -- | 14 | 10 | 14 |
| Net income (loss) | (16,161) | 1,338 | (20,916) | (10,736) |
| Preferred stock dividends in arrears | (1,579) | (1,352) | (3,115) | (2,937) |
| Preferred stock discount accretion | (1,853) | (1,853) | (3,716) | (3,716) |
| Net loss available to common equity | (19,593) | (1,867) | (27,747) | (17,389) |
| Selected Financial Ratios (1): | ||||
| Yield on earning assets | 4.42% | 4.80% | 4.54% | 4.58% |
| Cost of funds | 1.84 | 2.23 | 1.81 | 2.33 |
| Interest rate spread | 2.58 | 2.57 | 2.73 | 2.25 |
| Net interest margin | 2.48 | 2.46 | 2.63 | 2.15 |
| Return on average assets | (2.02) | 0.14 | (1.28) | (0.53) |
| Return on average equity | N/M | 21.94 | N/M | (84.22) |
| Average equity to average assets | (0.20) | 0.63 | (0.28) | 0.62 |
| Non-interest expense to average assets | 4.04 | 3.51 | 3.86 | 3.42 |
| Per Share: | ||||
| Basic loss per common share | $ (0.92) | $ (0.09) | $ (1.31) | $ (0.82) |
| Diluted loss per common share | (0.92) | (0.09) | (1.31) | (0.82) |
| Dividends per common share | 0.00 | 0.00 | 0.00 | 0.00 |
| Book value per common share | (5.69) | (3.25) | (5.69) | (3.25) |
| September 30, | Percent | |||
| 2011 | 2010 | Change | ||
| Financial Condition: | ||||
| Total assets | $ 3,197,441 | $ 3,803,853 | -15.9% | |
| Loans receivable, net | ||||
| Held for sale | 45,199 | 28,744 | 57.2 | |
| Held for investment | 2,257,905 | 2,839,217 | (20.5) | |
| Investment securities available for sale, at fair value | 195,212 | 561,086 | (65.2) | |
| Investment securities held to maturity, at amortized cost | 21 | 33 | (36.4) | |
| Deposits and accrued interest | 2,599,793 | 3,027,735 | (14.1) | |
| Other borrowed funds | 533,800 | 696,429 | (23.4) | |
| Stockholders' (deficit) equity | (13,391) | 39,611 | (133.8) | |
| Allowance for loan losses | 138,347 | 156,186 | (11.4) | |
| Non-performing loans | 283,073 | 350,125 | (19.2) | |
| Non-performing assets | 376,043 | 410,347 | (8.4) | |
| Quarterly net charge-offs | (17,608) | (20,051) | (12.2) | |
| (1) Annualized when appropriate. | ||||
| N/M - Not meaningful | ||||
| ANCHOR BANCORP WISCONSIN INC. | ||
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | ||
| (Unaudited) | ||
|
September 30, 2011 |
March 31, 2011 |
|
| (In Thousands) | ||
| Assets | ||
| Cash and cash equivalents | $ 354,845 | $ 107,015 |
| Investment securities available for sale, at fair value | 195,212 | 523,289 |
| Investment securities held to maturity, at amortized cost | 21 | 27 |
| Loans receivable, net | ||
| Held for sale | 45,199 | 7,538 |
| Held for investment | 2,257,905 | 2,520,367 |
| Foreclosed properties and repossessed assets, net | 92,970 | 90,707 |
| Real estate held for development and sale | 544 | 717 |
| Office properties and equipment | 28,065 | 29,127 |
| Federal Home Loan Bank stock---at cost | 54,829 | 54,829 |
| Mortgage servicing rights, net | 18,791 | 24,961 |
| Unsettled securities sales receivable | 115,013 | -- |
| Accrued interest receivable and other assets | 34,047 | 36,248 |
| Total assets | $ 3,197,441 | $ 3,394,825 |
| Liabilities and Stockholders' Deficit | ||
| Deposits | ||
| Non-interest bearing | $ 295,685 | $ 240,671 |
| Interest bearing deposits and accrued interest payable | 2,304,108 | 2,466,489 |
| Total deposits and accrued interest | 2,599,793 | 2,707,160 |
| Other borrowed funds | 533,800 | 654,779 |
| Other accrued interest and fees payable | 31,708 | 23,544 |
| Other liabilities | 45,531 | 22,513 |
| Total liabilities | 3,210,832 | 3,407,996 |
| Preferred stock, $.10 par value, 5,000,000 shares authorized, 110,000 shares issued and outstanding; dividends in arrears of $15,622 at September 30, 2011 and $12,507 at March 31, 2011 | 92,724 | 89,008 |
| Common stock, $.10 par value, 100,000,000 shares authorized, 25,363,339 shares issued, 21,677,594 shares outstanding | 2,536 | 2,536 |
| Additional paid-in capital | 111,513 | 111,513 |
| Retained deficit | (127,994) | (103,362) |
| Accumulated other comprehensive income (loss) | 726 | (19,952) |
| Treasury stock (3,685,745 shares), at cost | (90,516) | (90,534) |
| Deferred compensation obligation | (2,380) | (2,380) |
| Total stockholders' deficit | (13,391) | (13,171) |
| Total liabilities and stockholders' deficit | $ 3,197,441 | $ 3,394,825 |
| ANCHOR BANCORP WISCONSIN INC. | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (Unaudited) | ||||
| Three Months Ended | Six Months Ended | |||
| September 30, | September 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| (In Thousands - Except Per Share Data) | ||||
| Interest income: | ||||
| Loans | $ 29,937 | $ 40,149 | $ 62,046 | $ 80,830 |
| Investment securities and Federal Home Loan Bank stock | 2,960 | 3,421 | 6,916 | 6,866 |
| Interest bearing deposits | 98 | 126 | 150 | 376 |
| Total interest income | 32,995 | 43,696 | 69,112 | 88,072 |
| Interest expense: | ||||
| Deposits | 6,734 | 13,240 | 14,061 | 29,055 |
| Other borrowed funds | 7,761 | 8,038 | 15,031 | 17,711 |
| Total interest expense | 14,495 | 21,278 | 29,092 | 46,766 |
| Net interest income | 18,500 | 22,418 | 40,020 | 41,306 |
| Provision for credit losses | 17,115 | 10,674 | 20,597 | 19,608 |
| Net interest income after provision for credit losses | 1,385 | 11,744 | 19,423 | 21,698 |
| Non-interest income: | ||||
| Net impairment losses recognized in earnings | (123) | (113) | (182) | (199) |
| Loan servicing income, net of amortization | 478 | 339 | 1,246 | 1,492 |
| Credit enhancement income on mortgage loans sold | 16 | 236 | 62 | 489 |
| Service charges on deposits | 2,947 | 3,165 | 5,741 | 6,918 |
| Investment and insurance commissions | 917 | 769 | 1,954 | 1,725 |
| Net gain on sale of loans | 3,994 | 9,216 | 5,167 | 10,563 |
| Net gain on sale of investment securities | 5,206 | 6,653 | 6,342 | 6,765 |
| Net gain on sale of branches | -- | 2,318 | -- | 7,248 |
| Revenue from real estate partnership operations | 13 | 1 | 51 | 387 |
| Other | 1,331 | 1,136 | 2,325 | 1,999 |
| Total non-interest income | 14,779 | 23,720 | 22,706 | 37,387 |
| Non-interest expense: | ||||
| Compensation | 9,863 | 9,578 | 20,057 | 21,403 |
| Occupancy | 1,925 | 2,017 | 3,905 | 4,384 |
| Federal deposit insurance premiums | 1,774 | 3,621 | 3,707 | 7,696 |
| Furniture and equipment | 1,611 | 1,741 | 3,155 | 3,503 |
| Data processing | 1,608 | 1,782 | 2,991 | 3,354 |
| Marketing | 427 | 410 | 732 | 717 |
| Expenses from real estate partnership operations | 677 | 13 | 719 | 515 |
| OREO operations - net expense | 4,164 | 6,784 | 11,789 | 12,440 |
| Mortgage servicing rights impairment | 5,069 | 1,272 | 5,290 | 1,462 |
| Legal services | 1,267 | 2,680 | 2,201 | 4,779 |
| Other professional fees | 501 | 315 | 1,076 | 2,109 |
| Other | 3,439 | 3,899 | 7,413 | 7,445 |
| Total non-interest expense | 32,325 | 34,112 | 63,035 | 69,807 |
| Income (loss) before income taxes | (16,161) | 1,352 | (20,906) | (10,722) |
| Income taxes | -- | 14 | 10 | 14 |
| Net income (loss) | (16,161) | 1,338 | (20,916) | (10,736) |
| Preferred stock dividends in arrears | (1,579) | (1,352) | (3,115) | (2,937) |
| Preferred stock discount accretion | (1,853) | (1,853) | (3,716) | (3,716) |
| Net loss available to common equity | $ (19,593) | $ (1,867) | $ (27,747) | $ (17,389) |
| Loss per common share: | ||||
| Basic | $ (0.92) | $ (0.09) | $ (1.31) | $ (0.82) |
| Diluted | (0.92) | (0.09) | (1.31) | (0.82) |