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Anchor BanCorp Wisconsin, Inc. Announces Fourth Quarter and Fiscal Year Results
Bank and Holding Company Also Announce Agreement With Office of Thrift Supervision
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| ABCW | 1.16 | +0.04 |
MADISON, Wis., June 26, 2009 (GLOBE NEWSWIRE) -- Anchor BanCorp Wisconsin, Inc. (Nasdaq:ABCW - News) today announced a net loss of $43.3 million for the quarter ended March 31, 2009, and net loss of $228.3 million for the twelve-month period ended March 31, 2009, a loss of $10.83 per share. This compares with net income of $5.6 million for the same quarter in 2008 and $31.1 million for the twelve-month period ended March 31, 2008.
Specific Charges Drive Loss
Losses for the fiscal year were driven primarily by increases in the provision for loan losses, which were $205.7 million during the fiscal year and the decision in the third fiscal quarter to write off accumulated goodwill in its entirety, resulting in a $72.2 million non-cash charge against income. For the quarter ended March 31, 2009, loan loss provisions were $56.4 million, as compared with $10.4 million for the same period a year ago, and $93.0 million in our 2009 third fiscal quarter.
Mark D. Timmerman, Executive Vice President of Anchor BanCorp Wisconsin, Inc. and President and COO of AnchorBank, fsb, a wholly owned subsidiary of Anchor BanCorp Wisconsin, Inc. stated, "We continue to see the effects of the recession on our customers, particularly those in the residential real estate development space, hence our need to continue to add to our loan loss reserves. However, we do believe that at this point the worst of the situation is behind us."
AnchorBank Benefits from Lower Interest Rate Environment
Benefitting from lower interest rates, the Bank's cost of funds decreased to 2.94 percent for the fiscal year ending March 31, 2009, from 3.65 percent the previous year. Interest rate spread also improved during the year to 2.69 percent from 2.60 percent for the previous fiscal year.
Customer Base Continues to Grow
"Despite the challenges of today's economic realities, we continue to grow -- serving more customers and more of their financial needs than ever before," added Timmerman. Total deposits grew to $3.9 billion, up 10.8 percent, during the 2009 fiscal year. AnchorBank, fsb now serves nearly 172,000 households and businesses across 62 Wisconsin communities.
Lower Residential Mortgage rates also spurred growth. During the December through May period (which overlaps between the end of fiscal year 2009 and the beginning of Fiscal year 2010), the declining interest rate environment helped AnchorBank generate approximately $1.2 billion in residential loan production, a significant portion of which came from new customers.
Cost Cutting Measures
"Given the current environment, management has been actively implementing cost cutting measures as part of our fiscal year 2010 planning," said Timmerman.
So far the company has identified cost reductions of nearly $6 million, or approximately 6 percent, in the operating expense budget for the 2010 fiscal year. The actions taken or in process to achieve these savings include:
* Closing our Atwood Avenue branch in Madison, Neenah Center branch in Neenah and Park Avenue branch in Oshkosh, all of which experience significant geographical overlap with other branches in the same communities. * Staff reductions through job elimination, retirement and normal attrition. * Strict review of any new or replacement positions. * Exiting non-strategic business lines, such as indirect auto lending. * Increasing our implementation of electronic document capture and storage.
In addition, the salaries of the Senior and Executive Management teams have been frozen since January 2008 and no bonuses, stock options or new stock awards were granted during the 2009 fiscal year. A freeze has also been placed on fees paid to the Board of Directors.
"I know the AnchorBank management team has been working very hard to streamline the organization and budget in line with the realities of today's marketplace," said Chris Bauer, newly named President and CEO of Anchor BanCorp Wisconsin, Inc. and CEO of AnchorBank. "This will be an ongoing process as we develop our operating plans and focus our strategy," added Bauer.
Agreement with Office of Thrift Supervision
Separately, Anchor BanCorp Wisconsin, Inc. announced today that it had voluntarily entered into a Cease and Desist (C&D) agreement with the Office of Thrift Supervision (OTS). "The agreement is a formalization and regulatory acknowledgement of the challenges we have been addressing since last fall," said Timmerman.
Among other things, the order stipulates that the Bank and Anchor BanCorp Wisconsin, Inc. must provide to the OTS a revised three-year business plan including detailed plans for increasing capital and improving asset quality. The agreement also places certain restrictions on the Bank and Anchor BanCorp Wisconsin, Inc. with respect to payment of dividends, use of debt financing and certain commercial lending activities. Quarterly reports to the OTS are also provided for under the agreement. Details of the agreements are contained in the 10K filing with the Securities and Exchange Commission.
"We have been working closely with the OTS in developing our plans across all of the issues outlined in the C&D, and their input and support have been invaluable," said Timmerman. "In addition, the agreement announced earlier this month extending our line of credit agreement with U.S. Bank and its partners through May 31, 2010 will certainly help us to execute our plans to raise additional capital. At the heart of the matter, it's really all about managing our capital. The liquidity and cash position of the bank has never been stronger," added Timmerman. Federal Deposit Insurance Corporation (FDIC) insurance for customers of the Bank is not affected in any manner by the C&D agreement.
"AnchorBank has been helping Wisconsin families and businesses with their financial needs for the last 90 years. We are confident that the steps we are taking, in cooperation with the OTS, our lenders and our other advisors, will help ensure that we continue to do so for many years to come," added Bauer.
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 more than 70 full-service offices and two loan origination-only offices. All are located in Wisconsin.
This news release contains certain forward-looking statements with respect to the financial condition, 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 Twelve Months Ended
March 31, March 31,
------------------ -------------------
2009 2008 2009 2008
------------------ -------------------
Operations Data:
Net interest income $ 28,708 $ 35,066 $ 124,790 $129,005
Provision for loan losses 56,385 10,393 205,719 22,551
Net gain on sale of loans 7,858 2,984 10,681 6,144
Real estate investment
partnership revenue 310 457 2,130 8,623
Other non-interest income 7,794 10,121 32,720 36,111
Real estate investment
partnership cost of sales 545 548 1,736 8,489
Other non-interest expense 47,399 29,249 221,423 98,463
Minority interest in loss of
real estate partnership
operations (246) (43) (148) (402)
Income (loss) before income
taxes (59,413) 8,481 (258,409) 50,782
Income taxes (16,147) 2,838 (30,098) 19,650
Net income (loss) (43,266) 5,643 (228,311) 31,132
Selected Financial Ratios(1):
Yield on earning assets 5.22% 6.10% 5.63% 6.25%
Cost of funds 2.72 3.31 2.94 3.65
Interest rate spread 2.50 2.79 2.69 2.60
Net interest margin 2.45 2.84 2.70 2.72
Return on average assets (3.44) 0.43 (4.60) 0.63
Return on average equity (79.64) 6.56 (76.22) 9.17
Average equity to average
assets 4.32 6.55 6.04 6.82
Non-interest expense to
average assets 3.81 2.27 4.50 2.15
Per Share:
Basic earnings per share $ (2.05) $ 0.27 $ (10.83) $ 1.48
Diluted earnings per share (2.05) 0.27 (10.83) 1.48
Dividends per common share 0.00 0.18 0.29 0.71
Book value per common share 4.81 16.17 4.81 16.17
March 31,
---------------------- Percent
2009 2008 Change
---------------------- -------
Financial Condition:
Total assets $5,273,055 $5,149,557 2.4%
Loans receivable, net
Held for sale 161,964 9,669 1575.1
Held for investment 3,896,439 4,202,833 (7.3)
Investment securities available for
sale, at fair value 77,684 87,036 (10.7)
Mortgage-related securities available
for sale, at fair value 407,301 269,370 51.2
Mortgage-related securities held to
maturity, at amortized cost 50 59 (15.3)
Deposits 3,923,827 3,539,994 10.8
Borrowings 1,078,392 1,206,761 (10.6)
Stockholders' equity 213,721 345,116 (38.1)
Allowance for loan losses 137,165 38,285 258.3
Non-performing assets 198,714 109,488 81.5
-----------------------------------
(1) Annualized when appropriate.
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ANCHOR BANCORP WISCONSIN INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
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(Unaudited)
March 31, March 31,
2009 2008
----------------------
(In Thousands)
Assets
Cash and cash equivalents $ 433,826 $ 257,743
Investment securities available for sale, at
fair value 77,684 87,036
Mortgage-related securities available for sale,
at fair value 407,301 269,370
Mortgage-related securities held to maturity,
at amortized cost 50 59
Loans receivable, net
Held for sale 161,964 9,669
Held for investment 3,896,439 4,202,833
Foreclosed properties and repossessed assets,
net 52,563 8,247
Real estate held for development and sale 16,120 59,002
Office properties and equipment 48,123 47,916
Deferred tax asset, net of valuation allowance 16,202 3,760
Other assets 162,783 203,922
---------- ----------
Total assets $5,273,055 $5,149,557
========== ==========
Liabilities and Stockholders' Equity
Deposits
Non-interest bearing $ 274,392 $ 280,897
Interest bearing 3,649,435 3,259,097
---------- ----------
Total deposits 3,923,827 3,539,994
Borrowed funds 1,078,392 1,206,761
Other liabilities 56,704 51,605
---------- ----------
Total liabilities 5,058,923 4,798,360
---------- ----------
Minority interest in real estate partnerships 411 6,081
---------- ----------
Preferred stock, $.10 par value, 5,000,000
shares authorized, 110,000 shares issued 74,185 --
Common stock, $.10 par value, 100,000,000
shares authorized, 25,363,339 shares issued 2,536 2,536
Additional paid-in capital 109,327 72,300
Retained earnings, substantially restricted 134,234 374,593
Accumulated other comprehensive income (loss) (6,337) 1,864
Treasury stock (3,793,554 shares and 4,015,169
shares, respectively), at cost (94,744) (100,930)
Deferred compensation obligation (5,480) (5,247)
---------- ----------
Total stockholders' equity 213,721 345,116
---------- ----------
Total liabilities, minority interest and
stockholders' equity $5,273,055 $5,149,557
========== ==========
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ANCHOR BANCORP WISCONSIN INC.
CONSOLIDATED STATEMENTS OF INCOME
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(Unaudited)
Three Months Ended Twelve Months Ended
March 31, March 31,
2009 2008 2009 2008
------------------ -------------------
(In Thousands - except per share amounts)
Interest income:
Loans $ 55,910 $ 70,229 $ 241,113 $276,706
Mortgage-related securities 4,565 3,523 15,664 12,701
Investment securities 553 947 2,951 4,566
Interest-bearing deposits 65 569 534 2,702
-------- -------- --------- --------
Total interest income 61,093 75,268 260,262 296,675
Interest expense:
Deposits 22,515 29,363 94,857 123,269
Borrowed funds 9,870 10,839 40,615 44,401
-------- -------- --------- --------
Total interest expense 32,385 40,202 135,472 167,670
-------- -------- --------- --------
Net interest income 28,708 35,066 124,790 129,005
Provision for loan losses 56,385 10,393 205,719 22,551
-------- -------- --------- --------
Net interest income (loss)
after provision for loan
losses (27,677) 24,673 (80,929) 106,454
Non-interest income:
Real estate investment
partnership revenue 310 457 2,130 8,623
Loan servicing income (loss) (902) 796 2,957 5,031
Credit enhancement income 407 434 1,784 1,705
Service charges on deposits 3,528 3,609 15,487 13,039
Investment and insurance
commissions 708 904 3,933 3,961
Net gain on sale of loans 7,858 2,984 10,681 6,144
Net gain (loss) on sale or
impairment of investments
and mortgage-related
securities (805) 499 (4,103) 514
Other revenue from real
estate partnership
operations 3,966 2,475 8,194 7,440
Other 892 1,404 4,468 4,421
-------- -------- --------- --------
Total non-interest income 15,962 13,562 45,531 50,878
Non-interest expense:
Compensation 14,329 12,921 56,056 46,850
Real estate investment
partnership cost of sales 545 548 1,736 8,489
Occupancy 3,068 2,999 10,370 8,755
Furniture and equipment 2,049 1,980 8,431 6,629
Data processing 1,834 1,756 7,327 6,274
Marketing 971 791 3,026 4,047
Other expenses from real
estate partnership
operations 16,052 3,396 27,137 10,172
Net expense-REO operations 3,336 887 13,515 1,588
Mortgage servicing rights
impairment (128) -- 2,407 (709)
Goodwill impairment -- -- 72,181 --
Other 5,888 4,519 20,973 14,857
-------- -------- --------- --------
Total non-interest expense 47,944 29,797 223,159 106,952
-------- -------- --------- --------
Minority interest in loss of
real estate partnership
operations (246) (43) (148) (402)
-------- -------- --------- --------
Income (loss) before income
taxes (59,413) 8,481 (258,409) 50,782
Income taxes (16,147) 2,838 (30,098) 19,650
-------- -------- --------- --------
Net income (loss) $(43,266) $ 5,643 $(228,311) $ 31,132
======== ======== ========= ========
Earnings per share:
Basic $ (2.05) $ 0.27 $ (10.83) $ 1.48
Diluted (2.05) 0.27 (10.83) 1.48
Contact:
AnchorBank
Dale Ringgenberg, CFO
(608) 252-1810,
Mark D. Timmerman, President and COO
(608) 252-8784
Anchor BanCorp Wisconsin
David Omachinski, Chairman
(608) 252-8788
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