Anchor Bancorp Wisconsin, Inc. Announces Improved First Quarter Results

MADISON, Wis., Aug. 6, 2010 (GLOBE NEWSWIRE) -- Anchor BanCorp Wisconsin, Inc. (Nasdaq:ABCW) today announced a net loss of $15.5 million, or $0.73 per common share, for the three months ended June 30, 2010. This compares to a net loss of $29.8 million for the previous quarter and $68.3 million for the three months ended June 30, 2009. These represent improvements of 48.0 percent and 77.3 percent, respectively. The net loss figures include $3.4 million for the three months ended June 30, 2010, and $3.2 million for the three months ended June 30, 2009, in dividends accrued and discount accreted on the Corporation's Senior Preferred Stock owned by the U.S. Treasury under the Capital Purchase Program.

Key First Quarter Results
  • Provisions for loan losses during the quarter declined to $8.9 million from $20.2 million in the previous quarter, and from $70.4 million for the three months ended June 30, 2009.
  • Net loan-charge offs declined by 67.8 percent to $21.9 million from $68.1 million for the three months ended June 30, 2009.
  • Total interest expense declined 27.3 percent versus the three months ended June 30, 2009, to $25.6 million.
  • Non-interest expense declined 9.1 percent versus the three months ended June 30, 2009.
  • Total assets declined to $4.0 billion as of June 30, 2010, versus $5.2 billion on June 30, 2009.
  • Bank Capital Ratios improved and liquidity remained strong.

Provisions for Loan Losses and Net Charge Offs Improved

Provisions for loan losses during the quarter declined to $8.9 million, from $20.2 million in the previous quarter, and from $70.4 million for the three months ended June 30, 2009. "Our efforts to aggressively address problem loan situations over the past year are beginning to reflect positively in our financial results," said Chris Bauer, President and Chief Executive Officer of Anchor BanCorp Wisconsin, Inc.

Net charge-offs also declined to $21.9 million for the quarter, a 67.8 percent decline from the three months ended June 30, 2009. 

Expenses Declined

Total interest expense declined 27.3 percent for the quarter to $25.6 million versus the three months ended June 30, 2009, based on declines in interest bearing deposits and accrued interest of 20.0 percent and improvements in the Company's cost of funds of 37 basis points to 2.42 percent, both versus the three months ended June 30, 2009.

Non-interest expense declined 9.1 percent versus the three months ended June 30, 2009, to $35.7 million based on decreases in both core and non-core expenses. Core operating expenses declined by nearly 13 percent.

"Core operating expenses have benefited from focused cost cutting efforts, including our comprehensive strategic business review completed in May 2010, which is still in the process of being fully implemented," commented Bauer. Declines of 17.6 percent in compensation expenses, 18.6 percent in data processing expenses, 17.7 percent in marketing expenses and 7.5 percent in occupancy, furniture and equipment costs helped drive core operating expenses downward during the quarter compared to the three months ended June 30, 2009. "We expect to see continued reductions in core operating expenses based on our sale of 15 branches, completed in June and July of this year, and the full implementation of the results of our strategic business review process," added Bauer.

Non-core expenses, those expenses related primarily to the costs of loan work outs and additional FDIC premiums and excluding loan loss provisions, also declined substantially, down 45 percent versus the three months ended June 30, 2009. "Our ability to reduce our non-core operating expenses this quarter versus last year is also another indicator that our aggressive approach to dealing with problem loans is beginning to show results," said Bauer.

Total Assets Declined

Total assets declined to $4.0 billion as of June 30, 2010, versus $5.2 billion on June 30, 2009, due to sales of loan assets during the year of $158.2 million, three branch closures and the sale of 11 branches in the Northwest region of Wisconsin. "The actions we have taken to reduce the size of Anchor's balance sheet, and thereby reduce our capital needs, are moving forward, and resulted in a nearly 24 percent reduction in our asset size when comparing this quarter to last year. We'll see additional reductions next quarter when the completed sale of our four Green Bay locations are reflected in our results," commented Bauer.

Capital Ratios Improved, Liquidity Remained Strong

As a result of these actions, capital ratios at the Bank have improved. As of June 30, 2010, Tier 1 capital stood at 4.08 percent versus 3.73 percent for the previous quarter end; total risk-based capital stood at 7.63 percent versus 7.32 percent for the previous quarter end. "Improving our capital position is our number one focus. The actions undertaken are focused on supporting this objective and are starting to show results," concluded Bauer.

The Bank's liquidity position continues to be strong, exceeding $464 million as of June 30, 2010. 

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 57 offices. All are located in Wisconsin.

For More Information

For more information, contact Chris Bauer, Chief Executive Officer, at (608) 252-1810.

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, 2010 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  
  June 30,  
  2010 2009  
Operations Data:      
Net interest income  $ 18,808  $ 24,915  
Provision for loan losses  8,934  70,400  
Net gain on sale of loans  1,347  11,403  
Other non-interest income  12,320  8,217  
Non-interest expense  35,695  39,272  
Loss before income taxes  (12,154)  (65,137)  
Income taxes  --  --  
Net loss  (12,154)  (65,137)  
Income attributable to non-controlling interest in real estate partnerships  --  (85)  
Preferred stock dividends and discount accretion  (3,368)  (3,244)  
Net loss available to common equity of Anchor BanCorp  (15,522)  (68,296)  
       
Selected Financial Ratios (1):      
Yield on earning assets 4.37% 4.80%  
Cost of funds 2.42  2.79   
Interest rate spread 1.95  2.01   
Net interest margin 1.85  1.99   
Return on average assets   (1.13)  (4.92)  
Return on average equity   (184.75)  (132.26)  
Average equity to average assets  0.61  3.72   
Non-interest expense to average assets 3.33  2.97   
       
Per Share:      
Basic loss per common share   $ (0.73)  $ (3.23)  
Diluted loss per common share   (0.73)  (3.23)  
Dividends per common share 0.00 0.00  
Book value per common share  (3.95) 1.71  
       
  June 30,  Percent
  2010 2009  Change
Financial Condition:      
 Total assets  $ 3,998,929  $ 5,236,909 -23.6%
 Loans receivable, net      
 Held for sale  24,362  115,340 (78.9)
 Held for investment  3,040,398  3,641,708 (16.5)
 Investment securities available for sale, at fair value  485,175  544,607 (10.9)
 Investment securities held to maturity, at amortized cost  36  47 (23.4)
 Deposits and accrued interest  3,225,382  3,987,906 (19.1)
 Other borrowed funds  709,359  1,041,049 (31.9)
 Stockholders' equity  24,348  146,918 (83.4)
 Allowance for loan losses  166,649  139,455 19.5 
 Non-performing assets   422,024  190,381 121.7 
 Net charge-offs  (21,929)  (68,110) (67.8)
       
(1) Annualized when appropriate.      
 
 
 ANCHOR BANCORP WISCONSIN, INC.
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
  (Unaudited)   Percent 
  June 30, March 31,  Change
   2010 2010  
  (In Thousands)  
Assets      
Cash and cash equivalents  $ 234,382  $ 512,162 -54.2%
Investment securities available for sale, at fair value  485,175  416,203 16.6%
Investment securities held to maturity, at amortized cost  36  39 -7.7%
Loans receivable, net      
Held for sale  24,362  19,484 25.0%
Held for investment  3,040,398  3,229,580 -5.9%
Foreclosed properties and repossessed assets, net  49,413  55,436 -10.9%
Real estate held for development and sale  1,251  1,304 -4.1%
Office properties and equipment  32,479  43,558 -25.4%
Federal Home Loan Bank stock---at cost  54,829  54,829 0.0%
Accrued interest and other assets  76,604  83,670 -8.4%
Total assets  $ 3,998,929  $ 4,416,265 -9.4%
       
Liabilities and Stockholders' Equity      
Deposits      
Non-interest bearing  $ 266,626  $ 285,374 -6.6%
Interest bearing deposits and accrued interest  2,958,756  3,267,388 -9.4%
Total deposits and accrued interest  3,225,382  3,552,762 -9.2%
Other borrowed funds  709,359  796,153 -10.9%
Other liabilities  39,840  37,237 7.0%
Total liabilities  3,974,581  4,386,152 -9.4%
       
Preferred stock, $.10 par value, 5,000,000 shares authorized, 110,000 outstanding  83,459  81,596 2.3%
Common stock, $.10 par value, 100,000,000 shares authorized, 25,363,339 shares issued  2,536  2,536 0.0%
Additional paid-in capital  109,133  109,133 0.0%
Retained earnings, (deficit) substantially restricted  (76,867)  (61,249) 25.5%
Accumulated other comprehensive income (loss)  2,473  (5,399) -145.8%
Treasury stock (3,680,035 and 3,677,414 shares, respectively), at cost  (90,852)  (90,975) -0.1%
Deferred compensation obligation  (5,534)  (5,529) 0.1%
Total stockholders' equity  24,348  30,113 -19.1%
Total liabilities and stockholders' equity  $ 3,998,929  $ 4,416,265 -9.4%
 
 
 ANCHOR BANCORP WISCONSIN, INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
  Three Months Ended
  June 30,
  2010 2009
  (In Thousands - except per share amounts)
     
Interest income:    
Loans  $ 40,681  $ 53,790
Investment securities and Federal Home Loan Bank stock  3,445  6,047
Interest-bearing deposits  250  269
Total interest income  44,376  60,106
Interest expense:    
Deposits  15,815  24,133
Other borrowed funds  9,753  11,058
Total interest expense  25,568  35,191
Net interest income  18,808  24,915
Provision for loan losses  8,934  70,400
Net interest income (loss) after provision for loan losses  9,874  (45,485)
Non-interest income:    
Net impairment losses recognized in earnings  (86)  (213)
Loan servicing income (loss)  1,153  (182)
Credit enhancement income  253  377
Service charges on deposits  3,753  3,829
Investment and insurance commissions  956  804
Net gain on sale of loans  1,347  11,403
Net gain on sale of investments securities  112  1,505
Net gain on sale of branches  4,930  --
Other revenue from real estate partnership operations   386  911
Other  863  1,186
Total non-interest income  13,667  19,620
Non-interest expense:    
Compensation  11,825  14,350
Occupancy  2,367  2,413
Federal deposit insurance premiums  4,075  5,578
Furniture and equipment  1,762  2,050
Data processing  1,572  1,932
Marketing   307  373
Other expenses from real estate partnership operations  502  1,451
Foreclosed properties and repossessed assets---net expense  3,644  3,932
Mortgage servicing rights impairment (recovery)  190  (1,344)
Foreclosure cost advance impairment  --  3,708
Other  9,451  4,829
Total non-interest expense   35,695  39,272
Loss before income taxes  (12,154)  (65,137)
Income taxes  --  --
Net loss  (12,154)  (65,137)
Income attributable to non-controlling interest in real estate partnerships  --  (85)
Preferred stock dividends and discount accretion  (3,368)  (3,244)
Net loss available to common equity of Anchor BanCorp  $ (15,522)  $ (68,296)
     
Loss per common share:     
Basic  $ (0.73)  $ (3.23)
Diluted  (0.73)  (3.23)
CONTACT:  Anchor BanCorp Wisconsin, Inc.          Chris Bauer, Chief Executive Officer          (608) 252-1810

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