LACEY, Wash., April 23, 2012 (GLOBE NEWSWIRE) -- Anchor Bancorp (Nasdaq:ANCB) ("Company"), the holding company for Anchor Bank ("Bank"), today reported net income of $223,000 or $0.09 per diluted share, for the third fiscal quarter ended March 31, 2012 compared to a net loss of $3.4 million or $(1.36) per diluted share for the same period last year. The Company completed its initial public offering on January 25, 2011 with the issuance of 2,550,000 shares of its common stock, which generated net proceeds of $23.2 million. Therefore, operating results before that date pertain to the Bank only.
"While earnings have not returned to normalized levels we are pleased to report a profit for the second consecutive quarter, as we continue to remain focused on reducing our non-performing assets and increasing our profitability. While the local economy remains sluggish loan demand is beginning to increase. We continue to minimize our interest rate risk by reallocating assets and structuring our liabilities by maintaining higher than normal cash balances to provide us more flexibility as the economy recovers," stated Jerald L. Shaw, President and Chief Executive Officer.
Fiscal Third Quarter Highlights (at or for the period ended March 31, 2012, compared to March 31, 2011, or June 30, 2011):
- Total loan delinquencies (those loans 30 days or more past due date) including non-accrual loans decreased to $16.4 million at March 31, 2012, compared to $26.0 million at June 30, 2011;
- Provision for loan losses was $300,000 for the quarter ended March 31, 2012 compared to $3.6 million for the quarter ended March 31, 2011;
- Net loan charge-offs decreased to $966,000 for the quarter ended March 31, 2012 from $6.7 million for the quarter ended March 31, 2011;
- Non-performing assets decreased $14.4 million to $19.2 million or 3.9% of total assets at March 31, 2012 compared to $33.6 million, or 6.6% of total assets at March 31, 2011. At June 30, 2011 non-performing assets were $26.9 million, or 5.5% of total assets;
- Net interest margin decreased 40 basis points to 3.47% for the quarter ended March 31, 2012 compared to 3.87% for the quarter ended March 31, 2011. Net interest margin decreased 22 basis points from 3.69% for the quarter ended December 31, 2011.
Total delinquent and non-accrual loans decreased $9.6 million or 37.0% to $16.4 million at March 31, 2012 from $26.0 million at June 30, 2011. The non-accrual loans to total loans ratio decreased to 3.7% at March 31, 2012 from 5.4% at March 31, 2011 and 4.3% at June 30, 2011. The Company recorded a $300,000 provision for loan losses for the current quarter compared to $3.6 million for the quarter ended March 31, 2011. The allowance for loan losses of $5.8 million at March 31, 2012 represented 1.9% of loans receivable and 52.6% of non-performing loans, compared to $7.2 million at June 30, 2011 which represented 2.2% of the loans receivable and 51.1% of non-performing loans. The Company continues to reduce its exposure to construction and land loans. The total construction and land loan portfolios declined to $13.6 million or 4.5% of the total loan portfolio at March 31, 2012 compared to $18.4 million or 5.5 % of the total loan portfolio at June 30, 2011.
Non-performing loans decreased to $11.0 million at March 31, 2012 from $14.2 million at June 30, 2011. Non-performing loans consisted of the following at the dates indicated:
March 31, |
|June 30, 2011||
March 31, |
|One-to-four family residential||$ 2,654||$ 3,157||$ 4,727|
|Total real estate||10,164||12,427||15,820|
|Total||$ 11,028||$ 14,169||$ 18,753|
As of March 31, 2012, June 30, 2011, and March 31, 2011 there were 30, 31, and 32 loans, respectively, with aggregate net principal balances of $15.3 million, $15.0 million, and $12.6 million, respectively that we have identified as "troubled debt restructures." At March 31, 2012, June 30, 2011, and March 31, 2011 there were $1.4 million, $2.8 million, and $1.9 million, respectively, of "troubled debt restructures" included in the non-performing loans above.
Net charge-offs for the quarters ended consisted of the following:
|June 30, 2011||March 31, 2011|
|Real estate :|
|One-to-four family residential||$ 379||$ 1,581||$ 878|
|Total real estate||740||1,954||4,098|
|Net charge-offs||$ 966||$ 3,495||$ 6,735|
As of March 31, 2012, the Company had 59 properties in real estate owned ("REO") with an aggregate book value of $8.4 million compared to 109 properties with an aggregate book value of $8.2 million at December 31, 2011, and 104 properties in REO with an aggregate book value of $14.9 million at March 31, 2011. The decrease in number of properties during the quarter ended March 31, 2012 was attributable to ongoing sales. During the third quarter the Bank sold 73 residential real estate properties in Washington, of that 66 were vacant lots for residential homes. The largest of the current foreclosed properties at March 31, 2012 had an aggregate book value of $746,000 and consisted of a commercial real estate property located in Bremerton, Washington. At March 31, 2012, the Bank owned 21 one-to-four family residential properties with an aggregate book value of $3.9 million, two one-to-four family residential condominium units with an aggregate book value of $480,000, 25 residential building lots with an aggregate book value of $1.8 million, four vacant land parcels with an aggregate book value of $110,000, and seven parcels of commercial real estate with an aggregate book value of $2.1 million. The geographic distribution of our REO is limited to southwest Washington and the greater Portland area of northwest Oregon, with 49 of the parcels in Washington and the remaining 10 in Oregon.
As of March 31, 2012 the Bank exceeded all regulatory capital requirements with Tier 1 Leverage-Based Capital, Tier 1 Risk-Based Capital and Total Risk-Based Capital ratios of 10.8%, 16.7%, and 18.0%, respectively. As of March 31, 2011 these ratios were 11.6%, 16.3%, and 17.6%, respectively. Although the Bank was "well capitalized" at March 31, 2012, based on financial statements prepared in accordance with Generally Accepted Accounting Principles in the United States and the minimum percentages in the regulatory guidelines, because of the deficiencies cited in the Cease and Desist Order, the Bank is not regarded as "well capitalized" for federal regulatory purposes.
Anchor Bancorp exceeded all regulatory capital requirements with Tier 1 Leverage-Based Capital, Tier 1 Risk- Based Capital and Total Risk-Based Capital ratios of 11.2%, 17.3%, and 18.6%, respectively, as of March 31, 2012.
Balance Sheet Review
Total assets decreased by $890,000, or 0.2%, to $488.0 million at March 31, 2012, from $488.9 million at June 30, 2011. We increased our liquidity during this period as cash and due from banks increased $19.7 million, or 30.9%, loans receivable decreased $29.8 million, or 9.1%, and securities available for sale increased, $14.2 million, or 37.2%.
Mortgage-backed securities available for sale increased $17.6 million or 53.9% to $50.3 million at March 31, 2012 from $32.7 million at June 30, 2011. The increase in this portfolio was primarily the result of purchases of 36 FHLMC mortgage- backed securities totaling $48.0 million, sales of 40 FHLMC mortgage-backed securities totaling $24.1 million, and contractual payments of $6.3 million. The sales were due to rebalancing the investment portfolio to shorten the duration of the portfolio from 30 year to 15 year mortgage-backed securities.
Loans receivable, net, decreased $29.8 million or 9.1% to $295.7 million at March 31, 2012 from $325.5 million at June 30, 2011. The decline in the loan portfolio was the result of the current economic conditions, weak loan demand from creditworthy borrowers, and the transfer of $6.6 million from loans to REO properties. The total construction and land loan portfolios decreased $4.8 million to $13.6 million from $18.4 million at June 30, 2011 as a result of loan repayments.
Loans receivable consisted of the following at the dates indicated:
|March 31, 2012||June 30, 2011||March 31, 2011|
|One-to-four family residential||$ 86,861||$ 97,133||$ 101,782|
|Total real estate||240,297||264,111||276,095|
|Deferred loan fees||572||648||712|
|Allowance for loan losses||5,803||7,239||7,775|
|Loans receivable, net||$ 295,703||$ 325,464||$ 341,488|
Total liabilities increased $2.2 million between June 30, 2011 and March 31, 2012, primarily as the result of a $12.1 million, or 3.6%, increase in deposits offset by an $11.0 million or 12.8%, decrease in FHLB advances. Deposits increased as a result of the Bank's continued emphasis on generating core deposits by strategically pricing its deposit products to the market. Core deposits, which consist of all deposits other than certificates of deposits, increased $16.2 million or 10.3% during the nine months ended March 31, 2012.
Deposits consisted of the following at the dates indicated:
|March 31, 2012||June 30, 2011||March 31, 2011|
|(Dollars in thousands)|
|Noninterest-bearing demand deposits||$ 33,939||9.7%||$ 30,288||8.9%||$ 31,241||9.1%|
|Interest-bearing demand deposits||19,980||5.7%||17,387||5.1%||19,139||5.6%|
|Money market accounts||83,364||23.7%||78,017||23.0%||78,424||22.9%|
|Certificates of deposit||177,384||50.4%||181,519||53.5%||182,223||53.2%|
|Total deposits||$ 351,556||100.0%||$ 339,474||100.0%||$ 342,459||100.0%|
FHLB advances decreased $11.0 million or 12.8% to $74.9 million at March 31, 2012 from $85.9 million at June 30, 2011. The decrease was related to the Bank's continued focus on reducing its reliance on outside borrowings and continued emphasis on core deposits.
Total stockholders' equity decreased $3.1 million or 5.4% to $54.4 million at March 31, 2012 from $57.5 million at June 30, 2011. The decrease was primarily attributable to the $1.4 million loss during the nine months ended March 31, 2012. Other comprehensive income decreased $1.8 million at June 30, 2011 to $31,000 at March 31, 2012 which was a result of sales of investments during the past three quarters.
Anchor Bancorp had a net income of $223,000 or $0.09 per diluted share, for the three months ended March 31, 2012 compared to a net loss of $3.4 million or $(1.36) per diluted share for the same period in 2011. For the nine months ended March 31, 2012 the net loss was $1.4 million compared to a net loss of $4.1 million for the comparable period in 2011.
Net interest income. Net interest income before the provision for loan losses decreased $588,000 or 13.0%, to $3.9 million for the quarter ended March 31, 2012 from $4.5 million for the quarter ended March 31, 2011. For the nine months ended March 31, 2012, net interest income before the provision for loan losses decreased $1.3 million or 9.4% to $12.3 million from $13.5 million for the same period in 2011.
The Company's net interest margin decreased 40 basis points to 3.47% for the three months ended March 31, 2012, from 3.87% for the comparable period in 2011. The average cost of interest-bearing liabilities decreased 13 basis points to 1.52% for the three months ended March 31, 2012 compared to 1.65% for the same period in the prior year. This decrease was primarily due to a 22 basis point decrease in the average cost of deposits.
Provision for loan losses. In connection with its analysis of the loan portfolio at March 31, 2012, management determined that a provision for loan losses of $300,000 was required for the quarter ended March 31, 2012 compared to $3.6 million for the same period of the prior year. The provision for loan losses decreased by $3.8 million to $1.3 million for the nine months ended March 31, 2012 from $5.1 million for the same period last year.
Noninterest income. Noninterest income increased $637,000, or 52.0%, to $1.9 million for the quarter ended March 31, 2012, compared to $1.2 million for the same quarter a year ago. The majority of the increase in income was from gain on sale of investments of $609,000 compared to $0 for the same quarter a year ago. The $60,000 decrease in deposit services fees related to the Bank's two Wal-Mart branches which were closed in 2010 and one in December, 2011. Gain on sale of loans increased $69,000 during the quarter ended March 31, 2012 to $55,000 from a loss of $14,000 for the same quarter a year ago. Noninterest income increased $827,000 or 18.6% during the nine months ended March 31, 2012 for the same period in 2011. The increase was primarily a result of $1.4 million increase in gains on sales of investments offset by a decrease in deposit fees due to three Wal-Mart branch closures.
Noninterest expense. Noninterest expense decreased $216,000, or 3.9%, to $5.3 million for the three months ended March 31, 2012 from $5.5 million for the three months ended March 31, 2011. The decrease was primarily due to expenses related to REO impairment charges which decreased $472,000. The decrease in impairment charges during the third fiscal quarter ended March 31, 2012 from the same period in 2011 is due to incremental stabilization in the real estate market. The occupancy and equipment expense decreased $109,000 or 17.8% which reflects the closure of three Wal-Mart branches. Noninterest expense increased $643,000 in the nine months ended March 31, 2012 to $17.6 million from $17.0 million for the nine months ended March 31, 2011. The increase was primarily due to an increase of $1.2 million in information technology expense, of which $1.1 million is related to the core systems conversion scheduled for April, 2012.
About the Company
Anchor Bancorp is headquartered in Lacey, Washington and is the parent company of Anchor Bank, a community-based savings bank primarily serving Western Washington through its 13 full-service banking offices (including three Wal-Mart store locations) and one loan production office located within Grays Harbor, Thurston, Lewis, Pierce and Mason counties, Washington. The Company's common stock is traded on the NASDAQ Global Select Market under the symbol "ANCB" and is included in the Russell 2000 Index. For more information, visit the Company's web site www.anchornetbank.com.
Certain matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, expectations of the business environment in which we operate, projections of future performance, perceived opportunities in the market, potential future credit experience, and statements regarding our mission and vision. These forward-looking statements are based upon current management expectations and may, therefore, involve risks and uncertainties. Our actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements as a result of a wide variety or range of factors including, but not limited to: the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs that may be impacted by deterioration in the housing and commercial real estate markets and may lead to losses and non-performing assets in our loan portfolio, and may result in our allowance for loan losses not being adequate to cover actual losses, and require us to materially increase our reserves; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates, and the relative differences between short and long term interest rates, deposit interest rates, our net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes and other properties and fluctuations in real estate values in our market areas; results of examinations of us by the Federal Reserve Bank of San Francisco and our bank subsidiary by the Federal Deposit Insurance Corporation ("FDIC"), the Washington State Department of Financial Institutions, Division of Banks ("Washington DFI") or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, institute additional enforcement actions against the Company or the Bank, to take additional corrective action and refrain from unsafe and unsound practices, which may also require us to increase our reserve for loan losses, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits, which could adversely affect our liquidity and earnings; our compliance with regulatory enforcement actions; the requirements and restrictions that have been imposed under the Order to Cease and Desist consent order the Bank entered into with the FDIC and the Washington DFI and the possibility that the Bank will be unable to fully comply with this enforcement action which could result in the imposition of additional requirements or restrictions; our ability to attract and retain deposits; further increases in premiums for deposit insurance; our ability to control operating costs and expenses; the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; difficulties in reducing risk associated with the loans on our balance sheet; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our work force and potential associated charges; computer systems on which we depend could fail or experience a security breach; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; our ability to manage loan delinquency rates; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; legislative or regulatory changes that adversely affect our business including the effect of the Dodd-Frank Wall Street Reform and Consumer Protection Act, changes in regulatory policies and principles, including the interpretation of regulatory capital or other rules; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; the economic impact of war or any terrorist activities; other economic, competitive, governmental, regulatory, and technological factors affecting our operations; pricing, products and services; and other risks detailed in our reports filed with the Securities and Exchange Commission. Any of the forward-looking statements that we make in this Press Release and in the other public statements we make may turn out to be wrong because of the inaccurate assumptions we might make, because of the factors illustrated above or because of other factors that we cannot foresee. Because of these and other uncertainties, our actual future results may be materially different from those expressed in any forward-looking statements made by or on our behalf and the Company's operating and stock price performance may be negatively affected. Therefore, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. We undertake no responsibility to update or revise any forward-looking statements.
|ANCHOR BANCORP AND SUBSIDIARY|
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except share data)
|June 30, 2011|
|Cash and due from banks||$ 83,434||$ 76,341||$ 63,757|
|Securities available for sale, at fair value||52,349||43,832||38,163|
|Securities held to maturity, at amortized cost||7,647||8,115||7,587|
|Loans held for sale||408||1,174||225|
|Loans receivable, net of allowance for loan losses of $5,803, $6,469|
|Life insurance investment, net of surrender charges||18,107||17,957||17,612|
|Accrued interest receivable||1,658||1,686||1,810|
|Real estate owned, net||8,402||8,177||12,597|
|Federal Home Loan Bank ("FHLB") of Seattle stock, at cost||6,510||6,510||6,510|
|Property, premises and equipment, net||12,274||12,413||13,076|
|Deferred tax asset, net||555||900||551|
|Prepaid expenses and other assets||998||1,542||1,583|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Noninterest-bearing||$ 33,939||$ 29,966||$ 30,288|
Advance payments by borrowers for|
taxes an taxes and insurance
|Supplemental Executive Retirement Plan liability||1,717||1,757||1,838|
|Accounts payable and other liabilities||3,311||3,340||2,882|
|COMMITMENTS AND CONTINGENCIES|
Preferred stock, $.01 par value per share authorized
5,000, 5,000,000 shares; no shares issued or outstanding
|Common stock, $.01 par value per share; authorized 45,000,000|
|shares; 2,550,000 issued and 2,455,933 outstanding , 2,550,000 issued and|
2,454.233, and 2,550,000 shares issued and 2,450,833 outstanding at |
March 31, 2012, December 31,2011, and June 30, 2011, respectively
|Additional paid-in capital||23,202||23,205||23,187|
|Retained earnings, substantially restricted||32,059||31,836||33,458|
|Unearned employee stock ownership plan shares||(941)||(958)||(992)|
|Accumulated other comprehensive income, net of tax||31||1,096||1,774|
|Total stockholders' equity||54,376||55,204||57,452|
|Total liabilities and stockholders' equity||$488,045||$486,104||$488,935|
|ANCHOR BANCORP AND SUBSIDIARY|
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in thousands, except share data) (Unaudited)
|Three Months Ended|
|Nine Months Ended |
|Loans receivable, including fees||$ 4,838||$ 5,613||$ 15,265||$ 17,963|
|Total interest income||5,413||6,201||16,969||19,881|
|Total interest expense||1,493||1,693||4 ,707||6,343|
|Net interest income before provision for loan losses||3,920||4,508||12,262||13,538|
|Provision for loan losses||300||3,608||1,300||5,118|
|Net interest income after provision for loan losses||3,620||900||10,962||8,420|
|Deposit service fees||443||503||1,479||1,767|
|Other deposit fees||202||211||626||642|
|Gain on sale of investments||609||--||1,487||135|
|Gain (loss) on sale of loans||55||(14)||22||174|
|Total noninterest income||1,862||1,225||5,274||4,447|
|Compensation and benefits||2,075||2,077||6,270||6,406|
|General and administrative expenses||870||824||2,882||2,699|
|Real estate owned impairment||287||759||1,875||2,046|
|Real estate owned holding costs||233||195||688||790|
Federal Deposit Insurance Corporation ("FDIC") insurance|
|Occupancy and equipment||503||612||1,553||1,783|
|Loss on sale of premises and equipment||--||--||107||168|
|Gain on sale of real estate owned||(57)||(52)||(179)||(218)|
|Total noninterest expense||5,259||5,475||17,634||16,991|
Gain (loss) before provision (benefit) for federal income |
|Provision (benefit) for federal income taxes||--||--||--||--|
|Net income (loss)||$ 223||$ (3,350)||$ (1,398)||$ (4,124)|
|Basic earnings (loss) per share||$.09||$(1.36)||$(.57)||$(1.36)|
|Diluted earnings (loss) per share||$.09||$(1.36)||$(.57)||$(1.36)|
December 31, |
|June 30, 2011||Mar 31, 2011|
|SELECTED PERFORMANCE RATIOS|
|Return (loss) on average assets||0.18%||0.08%||(3.8)%||(2.70)%|
|Return (loss) on average equity||1.63%||0.67%||(29.3)%||(22.90)%|
|Average equity-to-average assets||11.28%||11.39%||8.90%||11.60%|
|Interest rate spread||3.27%||3.49%||3.56%||3.67%|
|Net interest margin||3.47%||3.69%||3.79%||3.87%|
|Average interest-earning assets to average|
|Other operating expenses as a percent of average|
|CAPITAL RATIOS (Anchor Bank)|
|Tier 1 leverage||10.8%||10.6%||10.7%||11.6%|
|Tier 1 risk-based||16.7%||16.2%||15.8%||16.3%|
|Non-accrual and 90 days or more past due loans||3.7%||4.1%||4.3%||5.4%|
|as a percent of total loans|
|Allowance for loan losses as a percent of total loans||1.9%||2.1%||2.2%||2.2%|
|Allowance as a percent of total non-performing loans||52.6%||50.2%||51.1%||41.5%|
|Non-performing assets as a percent of total assets||3.9%||4.3%||5.5%||6.6%|
|Net charge-offs to average outstanding loans||0.3%||0.4%||1.0%||2.20%|
CONTACT: Jerald L. Shaw, President Terri L. Degner, EVP and Chief Financial Officer Anchor Bancorp (360) 491-2250
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