Anchor Bancorp Reports First Quarter Fiscal 2013 Earnings
LACEY, Wash., Oct 24, 2012 (Menafn - GlobeNewswire via COMTEX) --Anchor Bancorp ANCB ("Company"), the holding company for Anchor Bank ("Bank"), today reported first quarter earnings for the fiscal year ending June 30, 2013. For the quarter ended September 30, 2012, the Company reported net income of 278,000 or 0.11 per diluted share, compared to a net loss of 1.7 million for the same period last year.
"Our year-over-year earnings improved as a result of the continued improvement in our credit quality. Non-performing assets decreased 8.5 million from September 30, 2011 and decreased 1.4 million from June 30, 2012. Our total non-interest expenses decreased 2.1 million during the current quarter as compared to the quarter ended September 30, 2011 which reflects the decline in non-performing assets as well as technology expenses while we take advantage of efficiencies from our new core processing system that was completed last year. While rates have been low for a protracted period, our net interest margin has remained virtually unchanged from September 30, 2011 at 3.68%. We continue to maintain higher liquidity which will provide opportunity when the economy recovers", stated Jerald L. Shaw, President and Chief Executive Officer.
Fiscal First Quarter Highlights
--Total loan delinquencies (those loans 30 days or more past payment due
date) including non-performing loans increased to 18.9 million at
September 30, 2012, compared to 14.2 million at June 30, 2012;
--Provision for loan losses was 300,000 for the quarter ended September
30, 2012 compared to 525,000 for the quarter ended September 30, 2011;
--Net loan charge-offs increased to 677,000 for the quarter ended
September 30, 2012 from 398,000 for the quarter ended September 30,
2011;
--Non-performing assets decreased 1.4 million to 14.0 million or 3.0% of
total assets at September 30, 2012 from 15.4 million at June 30, 2012
which represented 3.3% of total assets. At September 30, 2011,
non-performing assets were 22.5 million or 4.6% of total assets;
--Net interest margin decreased one basis point to 3.68% for the quarter
ended September 30, 2012 as compared to 3.69% for the quarter ended
September 30, 2011. Net interest margin decreased eight basis points
from 3.76% for the quarter ended June 30, 2012.
Credit Quality
Total delinquent and non-accrual loans increased 4.7 million to 18.9 million at September 30, 2012 from 14.2 million at June 30, 2012. The increase was primarily due to one commercial loan with an unpaid principal balance of 5.5 million that was current in its interest payments yet adversely reported due to being outstanding beyond its maturity date . The ratio of non-accrual and 90 days or more past due loans to total loans decreased to 2.9% at September 30, 2012 from 3.0% at June 30, 2012. The Company recorded a 300,000 provision for loan losses for the current quarter compared to 525,000 for the quarter ended September 30, 2011. The allowance for loan losses of 6.7 million at September 30, 2012 represented 2.3% of loans receivable and 78.4% of non-performing loans.
Non-performing loans decreased by 197,000 to 8.5 million at September 30, 2012 from 8.7 million at June 30, 2012 and 11.2 million at September 30, 2011. Non-performing loans consisted of the following at the dates indicated:
June
September30,September
30, 2012201230, 2011
-------------------------
(In thousands)
Real estate:
One-to-four
family1,6841,8782,680
Multi-family102----
Commercial----2,978
Construction3,4443,3694,316
Land7110973
-------------------------
Total real
estate5,3015,35610,047
Consumer:
Home equity260159322
Automobile6866151
Credit cards1916176
Other12110
-------------------------
Total consumer359242659
Business:
Commercial
business2,8653,124518
-------------------------
Total8,5258,72211,224
=========================
As of September 30, 2012, June 30, 2012, and September 30, 2011 there were 33, 30, and 32 loans, respectively, with aggregate net principal balances of 15.4 million, 15.1 million, and 17.3 million, respectively, that we have identified as "troubled debt restructures." At September 30, 2012, June 30, 2012, and September 30, 2011 there were 695,000, 1.2 million, and 2.8 million, respectively of "troubled debt restructures" included in the non-performing loans above.
As of September 30, 2012, the Company had 42 properties in real estate owned ("REO") with an aggregate book value of 5.5 million compared to 71 properties with an aggregate book value of 6.7 million at June 30, 2012, and 123 properties in REO with an aggregate book value of 11.2 million at September 30, 2011. The decrease in number of properties during the quarter ended September 30, 2012 was attributable to ongoing sales. During the quarter ended September 30, 2012 the Bank sold 12 residential real estate properties and one commercial real estate property in Washington and Oregon. Of that amount three were vacant lots for residential homes, eight were single family residential properties, one was a condominium unit, and one was a commercial real estate property. The largest of the current foreclosed properties at September 30, 2012 had an aggregate book value of 708,000 and consisted of a commercial real estate property located in Bremerton, Washington. At September 30, 2012, the Bank owned 13 one-to-four family residential properties with an aggregate book value of 3.1 million, 24 residential building lots with an aggregate book value of 1.1 million, two vacant land parcels with an aggregate book value of 83,000, and three parcels of commercial real estate with an aggregate book value of 1.1 million. Our REO is located in southwest Washington and the greater Portland area of northwest Oregon, with 36 of the parcels in Washington and the remaining six in Oregon.
Capital
As of September 30, 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 11.3%, 17.1% and 18.4%, respectively. As of September 30, 2011, these ratios were 10.5%, 15.9%, and 17.2%, respectively.
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 11.7%, 17.7%, and 18.9% as of September 30, 2012.
Balance Sheet Review
Total assets decreased by 4.7 million, or 1.0%, to 466.1 million at September 30, 2012, from 470.8 million at June 30, 2012. Cash and due from banks decreased 4.9 million or 6.2%, loans receivable decreased 255,000, or 0.1%, and securities available-for-sale increased, 1.8 million, or 3.7%.
Mortgage-backed securities available for sale increased 1.8 million, or 3.8%, to 48.9 million at September 30, 2012 from 47.1 million at June 30, 2012. The increase in this portfolio was primarily the result of purchases of five FHLMC mortgage-backed securities totaling 5.6 million, contractual payments of 4.0 million, and an increase of 200,000 for mark-to-market adjustments.
Loans receivable, net, decreased 255,000 or 0.1% to 287.5 million at September 30, 2012 from 287.8 million at June 30, 2012. Commercial real estate loans increased 4.9 million or 5.1% to 102.2 million from 97.3 million at June 30, 2012 and one-to-four family residential loans decreased 2.7 million or 3.3% to 80.0 million from 82.7 million at June 30, 2012.
Loans receivable consisted of the following at the dates indicated:
SeptemberJune 30,September
Real Estate:30, 2012201230, 2011
---------------------------
(In thousands)
One-to-four
family79,97682,70993,336
Multi-family41,80042,03245,190
Commercial102,22897,306104,399
Construction8,1156,6968,230
Land loans6,0637,0626,320
---------------------------
Total real
estate238,182235,805257,475
Consumer:
Home equity29,51731,50434,674
Credit cards5,1845,1806,921
Automobile2,7693,3424,887
Other consumer2,9602,9683,319
---------------------------
Total consumer40,43042,99449,801
Business:
Commercial
business loans16,37016,61816,064
---------------------------
Total Loans294,982295,417323,340
Less:
Deferred loan
fees802605593
Allowance for
loan losses6,6807,0577,366
---------------------------
Loans receivable,
net287,500287,755315,381
===========================
Total liabilities decreased 5.1 million between June 30, 2012 and September 30, 2012, primarily as the result of an 8.2 million or 2.4% decrease in deposits. Our core deposits, which consist of all deposits other than certificates of deposit, decreased slightly by 1.4 million or 0.8% to 173.2 million from 174.6 million at June 30, 2012.
Deposits consisted of the following at the dates indicated:
September 30, 2012June 30, 2012September 30, 2011
------------------------------------------------------
AmountPercentAmountPercentAmountPercent
(Dollars in thousands)
Noninterest-bearing demand
deposits38,18411.3%37,94111.0%31,6699.0%
Interest-bearing demand
deposits17,1995.1%16,4344.8%19,9515.7%
Savings deposits36,36410.8%36,47510.5%34,7059.9%
Money market accounts81,47624.1%83,75024.2%81,69923.2%
Certificates of deposit164,34648.7%171,19849.5%183,58852.2%
------------------------------------------------
Total deposits337,569100.0%345,798100.0%351,612100.0%
================================================
FHLB advances remained at 64.9 million at September 30, 2012 and June 30, 2012.
Total stockholders' equity increased 426,000 or 0.8% to 54.5 million at September 30, 2012 from 54.0 million at June 30, 2012. The increase was primarily due to the 278,000 in net income during the three months ended September 30, 2012. Accumulated other comprehensive income increased 128,000 to 103,000 at September 30, 2012 from a loss of (25,000) at June 30, 2012.
Operating Results
Anchor Bancorp had net income of 278,000 or 0.11 per diluted share, for the three months ended September 30, 2012 compared to a net loss of 1.7 million or 0.70 per diluted share for the same period in 2011.
Net interest income. Net interest income before the provision for loan losses decreased 203,000, or 4.9%, to 4.0 million for the quarter ended September 30, 2012 from 4.2 million for the quarter ended September 30, 2011.
The Company's net interest margin decreased one basis point to 3.68% for the quarter ended September 30, 2012, from 3.69% for the comparable period in 2011. The average yield on interest-earning assets decreased 24 basis points to 4.89% for the quarter ended September 30, 2012 compared to 5.13% for the same period in the prior year. The decline in the yield on interest-earnings assets was primarily attributable to the downward repricing of investment securities, and a higher level of liquidity. The decrease was primarily due to a 45 basis point decrease in the average cost of money market accounts and a 19 basis point decrease in the cost of certificates of deposit. The average cost of interest-bearing liabilities decreased 25 basis points to 1.41% for the quarter ended September 30, 2012 compared to 1.66% for the same period in the prior year.
Provision for loan losses. In connection with its analysis of the loan portfolio at September 30, 2012, management determined that a provision for loan losses of 300,000 was required for the quarter ended September 30, 2012 compared to 525,000 for the same period of the prior year.
Noninterest income. Noninterest income decreased 128,000, or 8.5%, to 1.4 million for the quarter ended September 30, 2012, compared to 1.5 million for the same quarter a year ago. The decrease in noninterest income was attributable to a combination of several factors: there was no gain on sale of investments for the quarter ended September 30, 2012 as compared to 193,000 for quarter ended September 30, 2011 and deposit service fees declined 138,000. The decreases are partially offset by an increase of 189,000 for gain on sale of loans for the quarter ended September 30, 2012. The increase in the amount of gain on sale of loans was the result of a greater volume of loans sold into the secondary market during the three months ended September 30, 2012 compared to the three months ended September 30, 2011, which was attributable to increased demand for one-to-four family loans as a result of refinancing activity.
Noninterest expense. Noninterest expense decreased 2.1 million, or 30.6%, to 4.8 million for the three months ended September 30, 2012 from 6.9 million for the three months ended September 30, 2011. The decrease was primarily due to expenses related to information technology which decreased 920,000. Real estate owned impairment expense decreased 884,000 from 1.1 million to 235,000 during the first fiscal quarter 2012 from the same period in 2011, which is attributable to the stabilization in the real estate market and a decrease in our real estate owned portfolio.
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) within Grays Harbor, Thurston, Lewis, Pierce and Mason counties, Washington. In addition we have one loan production office located in Grays Harbor County. 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.
Forward-Looking Statements:
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 increased 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 Supervisory Directive the Bank entered into with the FDIC and the Washington DFI and the possibility that the Bank will be unable to fully comply with the provisions of the Directive 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 changes in regulatory policies and principles, or the interpretations of regulatory capital or the other rules, including changes to the Basel III requirements, the impact of the effect of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the implementing regulations, 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), (unaudited)
SeptemberJune 30,
30, 20122012
-----------------
ASSETS
Cash and due from banks73,78578,673
Securities available for sale, at fair
value50,49848,717
Securities held to maturity, at amortized
cost7,9287,179
Loans held for sale387312
Loans receivable, net of allowance for
loan losses of 6,680 and 7,057287,500287,755
Life insurance investment, net of
surrender charges18,42118,257
Accrued interest receivable1,7101,532
Real estate owned, net5,4826,708
Federal Home Loan Bank (FHLB) of Seattle
stock, at cost6,4526,510
Property, premises and equipment, net11,99312,213
Deferred tax asset, net489555
Prepaid expenses and other assets1,4872,404
-----------------
Total assets466,132470,815
=================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing38,18437,941
Interest-bearing299,385307,857
-----------------
Total deposits337,569345,798
FHLB advances64,90064,900
Advance payments by borrowers for taxes
and insurance1,130562
Supplemental Executive Retirement Plan
liability1,7231,764
Accounts payable and other liabilities6,3603,767
-----------------
Total liabilities411,682416,791
STOCKHOLDERS' EQUITY
Preferred stock, .01 par value per
share; authorized 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 2,459,333 outstanding at
September 30, 2012 and 2,550,000 shares
issued and 2,457,633 outstanding at June
30, 2012, respectively2525
Additional paid-in capital23,20523,202
Retained earnings, substantially
restricted32,02431,746
Unearned employee stock ownership plan
shares(907)(924)
Accumulated other comprehensive income
(loss), net of tax103(25)
-----------------
Total stockholders' equity54,45054,024
-----------------
Total liabilities and stockholders'
equity466,132470,815
=================
ANCHOR BANCORP AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENTSThree Months Ended
(Dollars in thousands, except
per share data) (unaudited)September 30,
20122011
-----------------
Interest income:
Loans receivable, including
fees4,7455,247
Securities6194
Mortgage-backed securities474463
-----------------
Total interest income5,2805,804
-----------------
Interest expense:
Deposits9901,267
FHLB advances313357
-----------------
Total interest expense1,3031,624
-----------------
Net interest income before
provision for loan losses3,9774,180
Provision for loan losses300525
-----------------
Net interest income after
provision for loan losses3,6773,655
-----------------
Noninterest income
Deposit service fees391529
Other deposit fees189217
Gain on sale of investments--193
Loan fees185229
Gain (loss) on sale of loans177(12)
Gain on sale of premises and
equipment--51
Other income430293
-----------------
Total noninterest income1,3721,500
-----------------
Noninterest expense
Compensation and benefits2,1352,128
General and administrative
expenses8191,108
Real estate owned impairment2351,119
Real estate owned holding
costs185258
Federal Deposit Insurance
Corporation (FDIC) insurance
premiums162250
Information technology3601,280
Occupancy and equipment539527
Deposit services189107
Marketing127152
Loss (gain) on sale of real
estate owned20(59)
-----------------
Total noninterest expense4,7716,870
-----------------
Income (loss) before
provision for income tax278(1,715)
-----------------
Provision for income tax----
-----------------
Net income (loss)278(1,715)
=================
Basic earnings (loss) per
share0.11(.70)
=================
Diluted earnings (loss) per
share0.11(.70)
=================
As of or for the
Quarter Ended
(unaudited)
---------------------------------------
JuneMar
September30,31,September
30, 20122012201230, 2011
---------------------------------
SELECTED PERFORMANCE RATIOS
Return (loss) on average assets (1)0.24%(0.07)%0.18%(1.4)%
Return (loss) on average equity (2)2.12%(.58)%1.63%(12.4)%
Average equity-to-average assets (3)11.28%11.35%11.28%11.5%
Interest rate spread (4)3.48%3.56%3.27%3.46%
Net interest margin (5)3.68%3.76%3.47%3.69%
Efficiency ratio (6)89.2%79.7%91.0%121.1%
Average interest-earning assets to average
interest-bearing liabilities117.0%115.8%115.1%116.0%
Other operating expenses as a percent of
average total assets4.1%3.7%4.3%5.6%
CAPITAL RATIOS (Anchor Bank)
Tier 1 leverage11.3%10.9%10.8%10.5%
Tier 1 risk-based17.1%17.0%16.7%15.9%
Total risk-based18.4%18.2%18.0%17.2%
ASSET QUALITY
Nonaccrual and 90 days or more past due loans
as a percent of total loans2.9%3.0%3.7%3.5%
Allowance for loan losses as a percent of total
loans2.3%2.4%1.9%2.3%
Allowance as a percent of total non-performing
loans78.4%80.9%52.6%65.6%
Non-performing assets as a percent of total
assets3.0%3.3%3.9%4.6%
Net charge-offs to average outstanding loans0.2%0.1%0.3%5.3%
_____________________
(1) Net income (loss) divided by average total assets.
(2) Net income (loss) divided by average equity.
(3) Average equity divided by average total assets.
(4) Difference between weighted average yield on interest-earning assets and weighted
average rate on interest-bearing liabilities.
(5) Net interest income as a percentage of average interest-earning assets.
(6) Noninterest expense divided by the sum of net interest income and noninterest income.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Anchor Bancorp
CONTACT: Jerald L. Shaw, President
Terri L. Degner, EVP and Chief Financial Officer
Anchor Bancorp
(360) 491-2250
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