ANCHOR BANCORP ANNOUNCES FISCAL 1992 EARNINGS
ANCHOR BANCORP ANNOUNCES FISCAL 1992 EARNINGS HEWLETT, N.Y., July 22 /PRNewswire/ -- Anchor Bancorp, Inc.
(NASDAQ: ABKR), parent company of Anchor Savings Bank FSB, today reported net income for the fiscal year ended June 30, 1992, of $50.9 million before the accumulation of $12.7 million in preferred stock dividends as compared to $65.8 million before the accumulation of $13.3 million in preferred stock dividends for the prior fiscal year. This amounted to net income per common share of $2.19 for fiscal 1992 as compared to $3.00 per common share in the prior year. Fiscal 1991 results benefited from $60.4 million in non-core pretax gains from capital raising sales as compared to only $6.8 million in the current year.
Although net income in fiscal 1992 was lower than the prior year, Anchor's expectations were met as significant capital raising sales were not planned in 1992. On a core pretax earnings basis, which excludes gains and losses on the sale or revaluation of earning assets and other nonrecurring one-time transactions, fiscal 1992 results of $60.0 million almost tripled the core pretax income of $22.0 million generated in the prior year. As expected, fourth quarter fiscal 1992 net income declined substantially as the $28.2 million in capital raising gains on the sale of earning assets and mortgage servicing rights in the fourth quarter of 1991 was not repeated in the current quarter. In addition, the current quarter's results were burdened by a $9.0 million downward revaluation of Anchor's interest-only segment of its securities portfolio. This loss resulted from the unexpectedly high prepayment activity associated with the decline in interest rates. As a result, for the fourth quarter of fiscal 1992, Anchor's net income amounted to $3.4 million before the accumulation of $3.1 million in preferred dividends or $0.02 per common share. These results were down from net income of $31.8 million before the accumulation of $3.2 million in preferred dividends or $1.62 per common share reported in the comparable prior year quarter. Core pretax income grew to $17.8 million in the fourth quarter of fiscal 1992, up from $9.5 million in the comparable prior year period. James M. Large Jr., chairman and chief executive officer, stated, "Even with the dampening impact of the $9.0 million write-down of the interest-only securities portfolio, the quarter has been particularly satisfying as the OTS has released Anchor from its 1990 capital plan with all of its restrictions. In addition, our core pretax income has continued to grow for the ninth consecutive quarter and our nonperforming assets have declined to 0.91 percent of assets." Large noted that the interest-only portfolio is now down to $19.5 million and, hopefully, future prepayments will align with current Wall Street estimates. If actual prepayments significantly exceed current estimates, further write-downs may be necessary. He also noted that the interest rate environment that underlies the high prepayment activity has also increased the net unrealized gain in Anchor's securities portfolio to over $50 million. The continued growth in core pretax income is primarily attributable to an increasing net yield on average earning assets which amounted to 2.75 percent in the fourth quarter, up from 2.63 percent in the third quarter of this year. The net yield averaged 2.10 percent in the comparable prior year period. With the continued drop in market interest rates, Anchor maintained its aggressive practice of repricing its liabilities downward. The resulting reduction in the cost of deposits exceeded the drop in yields on adjustable-rate mortgage repricing as, generally, adjustable-rate mortgages are limited to a contractual maximum annual adjustment of 2 percent. As the year ended, Anchor's general and administrative expenses remained tightly controlled, and its loan portfolio continued to perform well. Its allowance for credit losses now approximates 54 percent of total nonperforming loans. Anchor's regulatory tangible capital amounted to $166.1 million or 2.1 percent of assets while regulatory leverage capital amounted to $243.9 million or 3.1 percent of assets at June 30, 1992. Risk-based regulatory capital amounted to $274 million or 8.5 percent of risk-weighted assets at that date. All ratios were in excess of currently applicable regulatory capital requirements. Large noted that increased capital requirements for the thrift industry are probable in the future, possibly by year-end. Anchor would probably not immediately comply with the new requirements, if imposed. If this should occur, Anchor is prepared to submit a capital plan detailing how it could achieve capital compliance with the new targets within a reasonable period of time. Fourth Quarter Fiscal 1992 Operating Statistics Net interest income amounted to $51.7 million in the fourth quarter of fiscal 1992 as compared to $42.7 million in the comparable prior year period, an increase of 21.1 percent. The net yield on average earning assets amounted to 2.75 percent, a significant improvement from the 2.10 percent reported in the fourth quarter of last year. The sharp decline of short-term rates and an aggressive approach to liability pricing continue to be principal factors underlying the improvement throughout the year. The cost of interest-bearing liabilities declined to 4.93 percent in the current quarter from 6.88 percent in the fourth quarter of fiscal 1991. The total provision for credit losses amounted to $5.1 million for the current quarter as compared to $7.8 million in the comparable prior year quarter. Net loans charged off to the allowance for credit losses were $3.2 million in the current quarter as compared to $5.5 million in the fourth quarter of fiscal 1991. Anchor's allowance for credit losses amounted to $28.0 million with non-accrual loans and real estate owned of $73.2 million or 0.91 percent of total assets at June 30, 1992, as compared to the allowance for credit losses of $24.0 million and nonaccrual loans and real estate owned of $80.9 million or 0.96 percent of total assets at June 30, 1991. Mortgage banking income amounted to $3.9 million, down from the $17.3 million earned in the comparable prior year quarter primarily due to a $13.1 million gain on the sale of mortgage servicing rights in order to raise capital in the fourth quarter of 1991. General and administrative expenses for the fourth quarter, exclusive of restructuring charges, amounted to $32.3 million or $1.7 million more than that in the comparable prior year quarter. The increase in expense related primarily to growth in the mortgage origination staff and the development of a wholesale mortgage operation. The extraordinary item for federal income tax benefits associated with the utilization of net operating loss carryforwards (NOL's) has declined in the fourth quarter of 1992 to 23.5 percent of income tax expense or $1.3 million as compared to 67.4 percent or $7.9 million in the prior year quarter. During the current quarter, Anchor began utilizing NOL's that were acquired in connection with acquisitions that gave rise to goodwill. Accordingly, $3.2 million in NOL benefits were credited to goodwill in the current quarter rather than as an extraordinary item in the Statement of Income. The utilization of Anchor's remaining NOL's will be accounted for in this manner pending the adoption of Statement of Financial Accounting Standards "SFAS" 109. Anchor Savings Bank is among the 15 largest U.S. thrifts with deposits of over $6.2 billion as of June 30, 1992. It operates branches in three market areas: Metropolitan New York/New Jersey, Western New York and Florida. -0- 7/22/92 /CONTACT: Thomas K. Hernly of Anchor Bancorp, 516-596-3902/ /FIRST AND FINAL ADD -- TABULAR MATERIAL -- TO FOLLOW/ (ABKR) CO: Anchor Bancorp, Inc. ST: New York IN: FIN SU: ERN
GK-LR -- NY068 -- 1959 07/22/92 13:28 EDT
|Printer friendly Cite/link Email Feedback|
|Date:||Jul 22, 1992|
|Previous Article:||CASH AMERICA ANNOUNCES QUARTERLY DIVIDEND|
|Next Article:||SOUTHERN COMPANY ANNOUNCES EARNINGS|