Printer Friendly

ANCHOR BANCORP REPORTS INCREASED SECOND QUARTER CORE EARNINGS AND THE RETROACTIVE ADOPTION OF SFAS NO. 109

 HEWLETT, N.Y., Jan. 21 /PRNewswire/ -- Anchor Bancorp, Inc. (NASDAQ: ABKR), parent company of Anchor Savings Bank FSB, today reported that Anchor has adopted the provisions of the Statement of Financial Accounting Standards SFAS No. 109, Accounting for Income Taxes, on a retroactive basis by restating its prior-period financial statements.
 The retroactive adoption resulted in a $100 million reduction of goodwill and the establishment of $28.1 million in net deferred tax assets -- the net difference of which reduced stockholders' equity by $71.9 million. SFAS No. 109 must be adopted in 1993; however, early adoption, which is permitted, would appear to allow Anchor to achieve capital compliance at Dec. 31, 1992.
 Anchor also reported, on the new accounting basis which restated prior-year results, net income for the second fiscal quarter ended Dec. 31, 1992, of $16.6 million before the accumulation of $2.9 million of preferred stock dividends or primary earnings per common share of 76 cents as compared to $9 million before the accumulation of $3.2 million of preferred stock dividends or primary earnings per common share of 33 cents in the prior-year quarter.
 James M. Large, Jr., chairman and chief executive officer, noted, "Net income for the current quarter included core pretax earnings of $22.9 million, up from $14.4 million in the comparable prior-year quarter and the highest in Anchor's history." He continued, "While this marks the 13th consecutive increase in core income, the rate of growth has slowed due to pressure on asset yields from downward repricing and the continued high prepayment levels experienced in the bank's loan and mortgage-backed securities portfolio. Core pretax income for the quarter ended Sept. 30, 1992, was $22.5 million." The net yield on average interest earning assets, which amounted to 2.84 percent during the current quarter, was up from the 2.41 percent in the comparable prior-year quarter but declined from the 2.94 percent posted in the immediately preceding quarter.
 On Dec. 19, 1992, the prompt corrective action provisions of the Federal Deposit Insurance Corporation Improvement Act became effective. Prior to the adoption of SFAS No. 109, as described above, Anchor was notified that it was deemed "undercapitalized" because it did not have 4 percent leverage capital as of Sept. 30, 1992. Being undercapitalized would require Anchor to file a capital restoration plan, limit its growth, and be subject to certain other restrictions.
 On Dec. 23, 1992, the Federal Financial Institutions Examination Counsel (FFIEC), including the OTS, announced that deferred tax assets resulting from the implementation of SFAS No. 109 could be included for regulatory capital purposes, with some limitations. Prior to this announcement, deferred tax assets were excluded from regulatory capital. If, as is expected, the OTS adopts regulations conforming to the FFIEC guidelines, Anchor's operating results and the effect of adopting SFAS No. 109 would cause Anchor to exceed the 4 percent leverage capital test and to have over 11 percent risk-based capital at Dec. 31, 1992.
 Due to the phaseout of approximately $20 million in qualifying supervisory goodwill on Jan. 1, 1993, Anchor would again fall below the 4 percent leverage capital level by approximately $11 million. Anchor has advised the OTS that it expects to exceed the 4 percent leverage capital requirement by March 31, 1993. As required, Anchor has also notified the OTS of these developments and is awaiting OTS decision as to whether this will cause it to be treated as "undercapitalized" and required to file a capital restoration plan. It should be noted that notwithstanding the phaseout of supervisory goodwill, Anchor's risk- based capital ratio would continue to warrant a "well capitalized" designation. In making the announcement, Mr. Large stated, "We are delighted that Anchor has achieved another regulatory capital hurdle at Dec. 31, 1992, and hope that the OTS will conclude that it is not necessary to require another capital plan."
 Anchor's asset quality also improved as non-performing assets dropped $3.3 million during the quarter to $58.7 million or 0.74 percent of assets at Dec. 31, 1992, well below peer averages. Its allowance for credit losses grew to $31.2 million and now approximates 77 percent of total non-performing loans.
 Second Quarter Fiscal 1993 Operating Statistics
 Net interest income amounted to $55.5 million in the second quarter of fiscal 1993 as compared to $45.5 million in the comparable prior year period, an increase of 22.1 percent. The net yield on average earning assets amounted to 2.84 percent, an improvement from the 2.41 percent reported in the second quarter of last year. The sharp decline of short-term rates and an aggressive approach to liability pricing were the principal factors underlying the improvement. The cost of liabilities declined to 4.02 percent in the current quarter from 6.00 percent in the second quarter of fiscal 1992.
 The growth in net interest income has slowed and shows signs of reversing. Net interest income for the current quarter improved by only $1.0 million of 1.7 percent from the first quarter of this year as the net yield declined slightly from the 2.94 percent achieved in the first quarter. The reversal is largely due to downward asset repricing and accelerated asset prepayments that more than offset the benefits of liability repricing during the current quarter.
 The total provision for credit losses amounted to $5.1 million for the current quarter, the same as in the comparable prior year quarter. Net loans charged off to the allowance for credit losses were $3.8 million in the second quarter of fiscal 1992. Anchor's allowance for credit losses amounted to $31.2 million with nonaccrual loans and real estate owned of $58.7 million or 0.74 percent of total assets at Dec. 31, 1992, as compared to the allowance for credit losses of $23.9 million and nonaccrual loans and real estate owned of $78.3 million or 0.96 percent of total assets at Dec. 31, 1991.
 Gains on the sale of assets amounted to $5.8 million in the current quarter up from $.6 million in the prior year quarter. The current quarter gains were primarily the result of the securitization and sale of approximately $83 million of adjustable-rate mortgages and $90 million of five-year balloon mortgage-backed securities.
 Mortgage banking and other fee income totaled $10.0 million for the quarter, up $1.3 million or 14.5 percent from the prior year quarter, as annuity and mutual fund sales commissions increased as did the mortgage- servicing portfolio and the resulting fee income.
 General and administrative expenses for the second quarter amounted to $32.7 million, up $2.1 million from the comparable prior year quarter. The increase related primarily to a net gain on the sale of repossessed properties in the prior year quarter, which did not repeat this year, and an increase in pension expense.
 The amortization and write-down of loan servicing rights totaled $2.9 million in the second quarter of fiscal 1993, up $1.5 million from the comparable prior year quarter. This increase was due to a larger purchased servicing portfolio and a charge associated with a lower valuation being placed on the portfolio due to increased prepayment activity. The method of accounting used for valuing PMSRs is somewhat similar to the "lower of cost or market" theory.
 Anchor Savings Bank is among the 15 largest U.S. thrifts with deposits of $6.2 billion as of Dec. 31, 1992. It operates branches in three market areas: Metropolitan New York/New Jersey, Western New York and Florida.
 ANCHOR BANCORP, INC. AND SUBSIDIARIES
 Consolidated Statements of Income
 (Unaudited, in thousands, except per share amounts
 Periods ended Three months Six months
 Dec. 31: 1992 1991 1992 1991
 Interest income:
 Loans receivable and loans
 held for sales:
 First mortgage loans $ 23,813 $ 30,648 $ 49,163 $ 63,693
 Cooperate apartment loans 7,656 10,349 15,946 21,325
 Consumer and commercial loans 14,118 17,973 28,899 37,679
 Mortgage-backed securities
 and mortgage-backed
 securities held for sale 83,758 92,060 169,218 189,953
 Money market investments 2,008 5,411 3,966 13,357
 Investment securities and
 investment securities
 held for sale 3,311 3,435 5,449 7,029
 Total interest income 134,659 160,776 272,641 333,036
 Interest expense:
 Deposits 62,170 98,631 130,710 204,930
 Borrowed funds and preferred
 stock of finance
 subsidiaries 16,961 16,669 31,821 36,833
 Total interest expense 79,131 115,300 162,531 241,763
 Net interest income 55,528 45,476 110,110 91,273
 Provision for credit losses (5,100) (5,100) (10,200) (10,200)
 Net interest income after
 provision for credit
 losses 50,428 40,376 99,910 81,073
 Non-interest income:
 Gain on sales and
 revaluations of
 earning assets, net 5,828 591 6,870 8,620
 Mortgage banking income 4,791 4,350 9,361 8,188
 Other 5,171 4,438 10,271 9,116
 Total non-interest income 15,790 9,289 26,502 25,924
 Non-interest expense:
 General and administrative:
 Compensation and benefits 14,355 14,176 28,207 28,366
 Occupancy and equipment 4,626 4,828 9,208 9,819
 Federal deposit insurance
 premiums 3,564 3,853 7,127 7,706
 Other 10,201 7,833 18,767 16,041
 Total 32,746 30,690 63,309 61,932
 Amortization of excess of
 cost over fair value of
 net assets acquired 1,795 2,538 3,600 5,185
 Amortization and write-down
 of cost of loan servicing
 rights acquired 2,891 1,421 7,149 2,928
 Restructuring charges -- 324 -- 672
 Total non-interest expenses 37,432 34,973 74,058 70,717
 Income before income tax
 expense and cumulative
 effect of a change in
 accounting principle 28,786 14,692 52,354 36,280
 Income tax expense 12,203 5,723 23,027 13,704
 Income before cumulative
 effect of a change in
 accounting principle 16,583 8,969 29,327 22,576
 Cumulative effect on prior
 years of a change in
 accounting principle,
 net of income tax benefit
 of $5,055 -- -- (7,066) --
 Net income 16,583 8,969 22,261 22,576
 Dividends on Class A
 cumulative preferred stock 2,865 3,159 5,946 6,477
 Net income applicable to
 common stock 13,718 5,810 16,315 16,099
 Earnings (loss) per
 share amounts:
 Primary earnings (loss)
 per share:
 Income before cumulative
 effect of a change in
 accounting principle $0.76 $0.33 $1.29 $0.92
 Cumulative effect on prior
 years of a change in
 accounting principle,
 net of income tax effect -- -- (0.39) --
 Net income $0.76 $0.33 $0.90 $0.92
 Fully diluted earnings
 (loss) per share:
 Income before cumulative
 effect of a change in
 accounting principle $0.75 $0.33 $1.29 $0.92
 Cumulative effect on prior
 years of a change in
 accounting principle,
 net of income tax effect -- -- (0.39) --
 Net income $0.75 $0.33 $ .90 $0.92
 Fully diluted earnings
 (loss) per share:
 Income before cumulative
 effect of a change in
 accounting principle $0.75 $0.33 $1.29 $0.92
 Cumulative effect on prior
 years of a change in
 accounting principle,
 net of income tax effect -- -- (0.39) --
 Net income 0.75 0.33 0.90 0.92
 Pro forma amounts
 assuming the change
 in accounting principle
 is applied retroactively:
 Net income 16,583 6,457 29,327 20,064
 Primary earnings per share 0.76 0.19 1.29 0.78
 Fully diluted earnings
 per share 0.75 0.19 1.29 0.78
 ANCHOR BANCORP, INC. AND SUBSIDIARIES
 Consolidated Statements of Financial Condition
 (Unaudited, dollars in thousands)
 12/31/92 6/30/92
 ASSETS
 Cash and due from banks $ 86,534 $ 71,835
 Money market investments 19,062 277,187
 Loans, mortgage-backed securities
 and investments held for sale 416,052 314,608
 Investment securities 131,151 117,942
 Mortgage-backed securities 5,068,315 4,635,240
 Loans receivable:
 First mortgage loans 892,655 1,090,574
 Cooperative apartment loans 384,021 408,527
 Consumer and commercial loans 669,823 706,139
 Less allowance for credit losses (31,167) (28,011)
 Loans receivable, net 1,915,332 2,177,229
 Accrued interest receivable 44,879 48,636
 Premises and equipment 38,636 40,381
 Excess of cost over fair
 value of net assets acquired 105,027 108,827
 Cost of loan servicing rights acquired 34,405 38,010
 Other assets 83,060 108,690
 Total 7,942,453 7,938,585
 LIABILITIES, PREFERRED STOCK OF FINANCE SUBSIDIARIES AND
 STOCKHOLDERS' EQUITY
 Liabilities:
 Deposits 6,227,136 6,239,025
 Borrowed funds 1,253,608 1,180,681
 Mortgage escrow funds 57,702 59,591
 Accrued expenses and other liabilities 54,170 56,775
 Total 7,592,616 7,536,072
 Preferred stock of fiancee subsidiaries -- 75,000
 Stockholders' equity:
 Preferred stock:
 Class A cumulative preferred
 stock, $1 par value;
 3,140,000 shares authorized,
 issued and outstanding 3,140 3,140
 Additional paid-in capital 153,860 153,860
 Total preferred stock 157,000 157,000
 Common stock:
 $.01 par value, 70 million
 shares authorized: 17,644,164
 and 17,623,331 shares issued
 and outstanding at Dec. 31, 1992
 and June 30, 1992, respectively 176 176
 Additional paid-in capital 192,078 192,015
 Total common stock 192,254 192,191
 Retained income (deficit) 1,130 (21,131)
 Less treasury stock at cost
 (119,000 common shares) (547) (547)
 Total 349,837 327,513
 Total $7,942,453 $7,938,585
 NOTE: Prior periods restated for the retroactive adoption of SFAS No. 109.
 -0- 1/21/93
 /CONTACT: Thomas K. Hernly of Anchor Bancorp, 516-596-3902/
 (ABKR)


CO: Anchor Bancorp, Inc. ST: New York IN: FIN SU: ERN

SM-CK -- NY053 -- 7492 01/21/93 14:22 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jan 21, 1993
Words:2312
Previous Article:GLOBAL MARINE REPORTS 1992 NET INCOME
Next Article:MASCOTT CORPORATION ANNOUNCES UNIQUE CINNABON VALENTINE GIFT
Topics:


Related Articles
MNC FINANCIAL, INC. REVISES UPWARDS ITS 1992 RESULTS FOLLOWING ADOPTION OF NEW ACCOUNTING STANDARD
NBD BANCORP REPORTS RECORD QUARTERLY EARNINGS
CITIZENS FIRST CONTINUES DRAMATIC EARNINGS INCREASES
NATWEST BANCORP REPORTS RECORD PROFITS, FIFTH QUARTER OF INCREASED EARNINGS
ANCHOR BANCORP ANNOUNCES INCREASED THIRD QUARTER EARNINGS
NATWEST BANCORP REPORTS RECORD PROFITS SIXTH CONSECUTIVE QUARTER OF INCREASED EARNINGS
NBD BANCORP REPORTS RECORD SECOND QUARTER RESULTS
ANCHOR BANCORP ANNOUNCES FISCAL 1993 EARNINGS
NBD BANCORP REPORTS RECORD THIRD QUARTER RESULTS
NBD BANCORP REPORTS FOURTH QUARTER AND YEAR-END RESULTS

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters