[X]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the transition period from _____ to
_____
|
Washington | 26-3356075 |
(State or other jurisdiction of incorporation | (I.R.S. Employer |
or organization) | I.D. Number) |
601 Woodland Square Loop SE, Lacey, Washington | 98530 |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: | (360) 491-2250 |
Large accelerated filer | [ ] | Accelerated filer | [ ] | |
Non-accelerated filer | [ ] | Smaller reporting company | [X]* |
Item 1 - Financial Statements | Page |
Consolidated
Statement of Financial Position (unaudited)
|
1 | ||
Consolidated
Statement of Operations (unaudited)
|
2 | ||
Consolidated
Statement of Comprehensive Income (Loss)
(unaudited)
|
3 | ||
Consolidated
Statement of Equity (unaudited)
|
4 | ||
Consolidated
Statement of Cash Flows (unaudited)
|
4 | ||
Selected
notes to Consolidated Financial Statements (unaudited)
|
7 |
Item
2 - Management’s Discussion and Analysis of Financial
Condition
and Results of
Operations
|
17 | ||
Item 3 - Quantitative and Qualitative Disclosures About Market Risk | 27 | ||
Item 4 - Controls and Procedures | 28 | ||
PART II - OTHER INFORMATION | |||
Item 1 - Legal Proceedings | 29 | ||
Item 1A - Risk Factors | 29 | ||
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds | 29 | ||
Item 3 - Defaults Upon Senior Securities | 29 | ||
Item 4 – [Removed and Reserved] |
29
|
||
Item 5 - Other Information | 29 | ||
Item 6 - Exhibits | 29 | ||
SIGNATURES | 30 |
ANCHOR
BANCORP AND SUBSIDIARY
CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
(In
thousands, except share data) (Unaudited)
|
September
30,
2010
|
June
30,
2010
|
||||||
ASSETS
|
||||||||
Cash
and due from banks
|
$ | 30,216 | $ | 32,831 | ||||
Securities
available-for-sale, at fair value, amortized cost of
|
||||||||
$43,519
and $45,811
|
46,215 | 48,779 | ||||||
Securities
held to maturity, at amortized cost, fair value of
|
||||||||
$10,057
and $10,710
|
9,461 | 10,035 | ||||||
Loans
held for sale
|
1,879 | 3,947 | ||||||
Loans
receivable, net of allowance for loan losses
of $10,997
|
||||||||
and
$16,788
|
371,619 | 389,411 | ||||||
Life
insurance investment, net of surrender charges
|
17,095 | 16,920 | ||||||
Mortgage
servicing rights
|
868 | 924 | ||||||
Accrued
interest receivable
|
2,225 | 2,158 | ||||||
Real
estate owned
|
17,695 | 14,570 | ||||||
Federal
Home Loan Bank of Seattle (“FHLB”) stock, at cost
|
6,510 | 6,510 | ||||||
Property,
premises, and equipment, at cost, less
|
||||||||
accumulated
depreciation of $14,772 and $14,489
|
14,264 | 14,435 | ||||||
Deferred
tax asset, net
|
489 | 373 | ||||||
Prepaid
expenses and other assets
|
1,333 | 1,600 | ||||||
Federal
income tax receivable
|
2,312 | 2,336 | ||||||
Total
Assets
|
$ | 522,181 | $ | 544,829 | ||||
LIABILITIES
AND EQUITY
|
||||||||
LIABILITIES
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing
|
$ | 29,872 | $ | 28,718 | ||||
Interest
bearing
|
329,638 | 327,070 | ||||||
Total
deposits
|
359,510 | 355,788 | ||||||
Accounts
payable and other liabilities
|
3,752 | 4,109 | ||||||
FHLB
advances
|
110,900 | 136,900 | ||||||
Supplemental
Executive Plan retirement liability
|
1,930 | 1,939 | ||||||
Advance
payments by borrowers for
|
||||||||
taxes
and insurance
|
2,247 | 1,423 | ||||||
Total
liabilities
|
478,339 | 500,159 | ||||||
EQUITY
|
||||||||
Retained
earnings
|
41,630 | 42,278 | ||||||
Accumulated
other comprehensive income, net of tax
|
2,212 | 2,392 | ||||||
Total
equity
|
43,842 | 44,670 | ||||||
TOTAL
liabilities and equity
|
$ | 522,181 | $ | 544,829 | ||||
ANCHOR
BANCORP AND SUBSIDIARY
CONSOLIDATED
STATEMENT OF OPERATIONS
(In
thousands, except share data) (Unaudited)
|
Three
Months Ended
September
30,
|
|||||||
2010
|
2009
|
|||||||
Interest
income:
|
||||||||
Loans
receivable, including fees
|
$ | 6,435 | $ | 7,674 | ||||
Investments
|
88 | 123 | ||||||
Mortgage-backed
securities
|
606 | 887 | ||||||
Total
interest income
|
7,129 | 8,684 | ||||||
Interest
expense:
|
||||||||
Deposits
|
1,761 | 2,991 | ||||||
FHLB
advances
|
905 | 1,478 | ||||||
Total
interest expense
|
2,666 | 4,469 | ||||||
Net
interest income before provision for loan losses
|
4,463 | 4,215 | ||||||
Provision
for loan losses
|
1,180 | 366 | ||||||
Net
interest income after provision for loan losses
|
3,283 | 3,849 | ||||||
Noninterest
income:
|
||||||||
Deposit
service fees
|
670 | 732 | ||||||
Other
deposit fees
|
219 | 198 | ||||||
Loan
fees
|
231 | 263 | ||||||
Gain
on sale of mortgages
|
93 | 598 | ||||||
Other
income
|
384 | 284 | ||||||
Total
noninterest income
|
1,597 | 2,075 | ||||||
Noninterest
expense:
|
||||||||
Compensation
and benefits
|
2,168 | 2,192 | ||||||
General
and administrative expenses
|
1,204 | 1,235 | ||||||
Real
estate owned reserve
|
493 | - | ||||||
FDIC
insurance premiums
|
313 | 450 | ||||||
Information
technology
|
487 | 469 | ||||||
Occupancy
and equipment
|
573 | 620 | ||||||
Deposit
services
|
181 | 239 | ||||||
Marketing
|
129 | 107 | ||||||
Loss
on sale of property, premises, and equipment
|
- | 1 | ||||||
Gain
(Loss) on sale of real estate owned
|
(20 | ) | 16 | |||||
Total
noninterest expense
|
5,528 | 5,329 | ||||||
Income(loss)
before provision (benefit) for income tax
|
(648 | ) | 595 | |||||
Provision
(Benefit) for Income Tax
|
||||||||
Current
|
(17 | ) | (75 | ) | ||||
Deferred
|
17 | 75 | ||||||
Total
provision (benefit) for income tax
|
- | -- | ||||||
Net
Income (Loss)
|
$ | (648 | ) | $ | 595 | |||
ANCHOR
BANCORP AND SUBSIDIARY
CONSOLIDATED
STATEMENT OF
COMPREHENSIVE
INCOME (LOSS)
(dollars
in thousands) (Unaudited)
|
Three
Months Ended
September
30,
|
|||||||
2010
|
2009
|
|||||||
Net
Income (Loss)
|
$ | (648 | ) | $ | 595 | |||
Other
Comprehensive Income (loss), net of income tax
|
||||||||
Unrealized
holding (loss) gain on available-for-sale securities
|
||||||||
Net
of income tax expense (benefit) of
|
||||||||
$(97)
and $334, respectively
|
(148 | ) | 648 | |||||
Adjustment
for realized gains included in net
|
||||||||
income
(loss), net of income tax provision of
|
||||||||
$22
and $0, respectively
|
(32 | ) | 0 | |||||
Other
comprehensive income (loss), net of income tax
|
(180 | ) | 648 | |||||
Comprehensive
income (loss)
|
$ | (828 | ) | $ | 1,243 |
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income
(Loss),
Net
of Income
Tax
|
Total
|
||||||||||
Balance
at June 30, 2010
|
$ | 42,278 | $ | 2,392 | $ | 44,670 | ||||||
Net
loss
|
(648 | ) | (648 | ) | ||||||||
Other
comprehensive loss net
|
||||||||||||
of
income tax
|
- | (180 | ) | (180 | ) | |||||||
Balance,
September 30, 2010
|
$ | 41,630 | $ | 2,212 | $ | 43.842 |
ANCHOR
BANCORP AND SUBSIDIARY
CONSOLIDATED
STATEMENT OF CASH FLOWS
(dollars
in thousands) (Unaudited)
|
Three
Months Ended
September
30,
|
|||||||
2010
|
2009
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income (loss)
|
$ | (648 | ) | $ | 595 | |||
Adjustments
to reconcile net income (loss) to net cash from operating
activities:
|
||||||||
Depreciation
and amortization
|
308 | 343 | ||||||
Net
amortization of premiums on securities
|
25 | 30 | ||||||
Amortization,
payoffs, and provision for mortgage servicing rights
|
23 | 82 | ||||||
Provision
for loan losses
|
1,180 | 366 | ||||||
Real
estate owned impairments
|
493 | - | ||||||
Deferred
income taxes, net of valuation allowance
|
18 | 75 | ||||||
Income
from life insurance investment
|
(175 | ) | (176 | ) | ||||
(Gain)
loss on sale of loans
|
(93 | ) | (598 | ) | ||||
Gain
on sale of investments
|
(54 | ) | -- | |||||
Loss
on sale of property, premises, and equipment
|
-- | 1 | ||||||
Loss
on sale of real estate owned
|
(20 | ) | 16 | |||||
Change
in operating assets and liabilities:
|
||||||||
Accrued
interest receivable
|
70 | (21 | ) | |||||
Originations
of loans held-for-sale
|
(1,364 | ) | (9,236 | ) | ||||
Proceeds
from sale of loans held-for-sale
|
3,524 | 7,318 | ||||||
Prepaid
expenses, other assets, and federal income tax receivable
|
(272 | ) | (166 | ) | ||||
Change
in Supplemental Executive Retirement Plan liability
|
9 | 10 | ||||||
Accounts
payable and other liabilities
|
227 | 232 | ||||||
Net
cash from operating activities
|
3,251 | (1,129 | ) | |||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds
from sales and maturities of available-for-sale securities
|
1,191 | 161 | ||||||
Principal
payments on mortgage-backed securities available-for-sale
|
1,130 | 1,700 | ||||||
Principal
payments on mortgage-backed securities held-to-maturity
|
570 | 781 | ||||||
Loan
originations, net of undisbursed loan proceeds and principal
repayments
|
10,356 | 14,291 | ||||||
Proceeds
from sale of real estate owned
|
2,490 | 1,106 | ||||||
Capital
improvements on real estate owned
|
(129 | ) | (33 | ) | ||||
Purchase
of property, premises, and equipment
|
(19 | ) | (8 | ) | ||||
Net
cash from activities
|
15,589 | 17,998 | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Net
change in advances by borrowers for taxes and insurance
|
824 | 740 | ||||||
Net
increase (decrease) in deposits
|
3,721 | (46,260 | ) | |||||
Proceeds
from FHLB advances
|
47,400 | 27,400 | ||||||
Repayment
of FHLB advances
|
(73,400 | ) | (20,000 | ) | ||||
Net
cash from financing activities
|
(21,455 | ) | (38,120 | ) | ||||
ANCHOR
BANCORP AND SUBSIDIARY
CONSOLIDATED
STATEMENT OF CASH FLOWS (Continued)
(dollars
in thousands) (Unaudited)
|
Three
Months Ended
September
30,
|
|||||||
2010
|
2009
|
|||||||
Net
Change in Cash and Due From Banks
|
(2,615 | ) | (21,251 | ) | ||||
Cash
and Due From Banks, beginning of period
|
32,831 | 42,388 | ||||||
Cash
and Due From Banks, end of period
|
$ | 30,216 | $ | 21,137 | ||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||
Noncash
investing activities
|
||||||||
Net
loans transferred to real estate owned
|
$ | 5,964 | $ | 13,568 | ||||
Originations
of mortgage servicing rights
|
$ | 23 | $ | 169 | ||||
Loans
securitized into mortgage-backed securities
|
$ | -- | $ | 5,016 | ||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ | 2,858 | $ | 4,617 | ||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
(dollars
in thousands)
|
||||||||||||||||
September 30, 2010
|
||||||||||||||||
Securities
available-for-sale
|
||||||||||||||||
Debt
securities
|
||||||||||||||||
Municipal
bonds
|
$ | 1,010 | $ | 9 | $ | - | $ | 1,019 | ||||||||
Within
1 year
|
820 | 32 | - | 852 | ||||||||||||
After
1 through 5 yr
|
675 | 23 | - | 698 | ||||||||||||
After
5 through 10 yr
|
865 | 6 | - | 871 | ||||||||||||
After
10 yr
|
- | - | - | - | ||||||||||||
U.S.
government agency securities
|
||||||||||||||||
After
1 through 5 yr
|
2,999 | 131 | - | 3,130 | ||||||||||||
FHLMC
mortgage-backed securities
|
37,150 | 2,495 | - | 39,645 | ||||||||||||
$ | 43,519 | $ | 2,696 | $ | - | $ | 46,215 | |||||||||
Securities held-to-maturity
|
||||||||||||||||
Debt
securities
|
||||||||||||||||
FHLMC
mortgage-backed securities
|
$ | 9,307 | $ | 596 | $ | - | $ | 9,903 | ||||||||
Municipal
bonds
|
||||||||||||||||
After
10 yr
|
154 | - | - | 154 | ||||||||||||
$ | 9,461 | $ | 596 | $ | - | $ | 10,057 |
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
(dollars
in thousands)
|
||||||||||||||||
June30, 2010
|
||||||||||||||||
Securities
available-for-sale
|
||||||||||||||||
Debt
securities
|
||||||||||||||||
Municipal
bonds
|
||||||||||||||||
Within
1 year
|
$ | 1,011 | $ | 16 | $ | -- | $ | 1,027 | ||||||||
After
1 through 5 yr
|
820 | 35 | -- | 855 | ||||||||||||
After
5 through 10 yr
|
675 | 16 | -- | 691 | ||||||||||||
After
10 yr
|
866 | -- | (8 | ) | 858 | |||||||||||
U.S.
government agency securities
|
||||||||||||||||
After
1 through 5 yr
|
2,999 | 152 | -- | 3,151 | ||||||||||||
FHLMC
mortgage-backed securities
|
39,440 | 2,757 | -- | 42,197 | ||||||||||||
$ | 45,811 | $ | 2,976 | $ | (8 | ) | $ | 48,779 | ||||||||
Securities held-to-maturity
|
||||||||||||||||
Debt
securities
|
||||||||||||||||
FHLMC
mortgage-backed securities
|
$ | 9,880 | $ | 675 | $ | -- | $ | 10,555 | ||||||||
Municipal
bonds
|
||||||||||||||||
After
10 yr
|
155 | -- | -- | 155 | ||||||||||||
$ | 10,035 | $ | 675 | $ | -- | $ | 10,710 |
Less
than 12 months
|
12
months or longer
|
Total
|
||||||||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
|||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||
September
30, 2010
|
||||||||||||||||||||||||
Securities
available-for-sale
|
||||||||||||||||||||||||
Debt
securities
|
||||||||||||||||||||||||
Municipal
bonds
|
|
|||||||||||||||||||||||
After
10 years
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
June
30, 2010
|
||||||||||||||||||||||||
Securities
available-for-sale
|
||||||||||||||||||||||||
Debt
securities
|
||||||||||||||||||||||||
Municipal
bonds
|
||||||||||||||||||||||||
After
10 years
|
$ | 636 | $ | 8 | $ | -- | $ | -- | $ | 636 | $ | 8 |
September
30,
2010
|
June
30,
2010
|
|||||||
(dollars in thousands) | ||||||||
Real
estate:
|
||||||||
One-to-four
family residential
|
$ | 110,892 | $ | 112,835 | ||||
Multi-family
residential
|
44,482 | 45,983 | ||||||
Commercial
|
115,887 | 118,492 | ||||||
Construction
|
23,478 | 36,812 | ||||||
Land
loans
|
7,480 | 7,843 | ||||||
Total
real estate
|
302,219 | 321,965 | ||||||
Consumer:
|
||||||||
Home
equity
|
41,601 | 42,446 | ||||||
Credit
cards
|
7,672 | 7,943 | ||||||
Automobile
|
7,953 | 8,884 | ||||||
Other
consumer loans
|
4,021 | 4,160 | ||||||
Total
consumer
|
61,247 | 63,433 | ||||||
Commercial
business loans
|
19,993 | 21,718 | ||||||
Total
loans
|
383,459 | 407,116 | ||||||
Less
|
||||||||
Deferred
loan fees and unamortized
|
||||||||
discount
on purchased loans
|
843 | 917 | ||||||
Allowance
for loan losses
|
10,997 | 16,788 | ||||||
$ | 371,619 | $ | 389,411 |
Fixed
Rate
|
Adjustable
Rate
|
Total
|
||||||||||
(dollars
in thousands)
|
||||||||||||
Less
than one year
|
$ | 31,823 | $ | 32,609 | $ | 64,432 | ||||||
After
one through five years
|
95,372 | 31,031 | 126,403 | |||||||||
After
five through ten years
|
53,786 | 13,747 | 67,533 | |||||||||
After
ten years
|
106,227 | 18,864 | 125,091 | |||||||||
$ | 287,208 | $ | 96,251 | $ | 383,459 |
September
30,
2010
|
September
30,
2009
|
|||||||
(dollars
in thousands)
|
||||||||
Beginning
balance
|
$ | 16,788 | $ | 24,463 | ||||
Provision
for losses
|
1,180 | 366 | ||||||
Charge-offs
|
(7,086 | ) | (3,910 | ) | ||||
Recoveries
|
115 | 35 | ||||||
$ | 10,997 | $ | 20,954 |
September
30,
2010
|
June
30,
2010
|
|||||||
(dollars
in thousands)
|
||||||||
Impaired
loans without a valuation allowance
|
$ | 8,095 | $ | 8,174 | ||||
Impaired
loans with a valuation allowance
|
18,430 | 23,872 | ||||||
Total
impaired loans
|
$ | 26,525 | $ | 32,046 | ||||
Valuation
allowance related to impaired loans
|
$ | 3,714 | $ | 8,491 | ||||
Average
investment in impaired loans
|
$ | 26,524 | $ | 33,640 | ||||
Interest
income recognized on a cash basis
|
||||||||
on
impaired loans
|
$ | 291 | $ | 57 |
September
30, 2010
|
||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
(dollars
in thousands)
|
||||||||||||||||
Securities
available-for-sale
|
$ | -- | $ | 46,215 | $ | -- | $ | 46,215 |
June
30, 2010
|
||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
Securities
available-for-sale
|
$ | -- | $ | 48,779 | $ | -- | $ | 48,779 |
September
30, 2010
|
||||||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
Total
Gains
Losses
|
||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||
Impaired
loans (1)
|
$ | - | $ | - | $ | 13,491 | $ | 13,491 | $ | (3,400 | ) | |||||||||
Real
estate owned
|
$ | - | $ | - | $ | 17,695 | $ | 17,695 | $ | (12,616 | ) | |||||||||
Mortgage
servicing rights
|
$ | - | $ | 868 | $ | - | $ | 868 | $ | - | ||||||||||
Loans
held for sale (2)
|
$ | 1,879 | $ | - | $ | - | $ | 1,879 | $ | - |
June
30, 2010
|
||||||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
Total
Gains
Losses
|
||||||||||||||||
Impaired
loans (1)
|
$ | -- | $ | -- | $ | 16,473 | $ | 16,473 | $ | (8,187 | ) | |||||||||
Real
estate owned
|
$ | -- | $ | -- | $ | 14,570 | $ | 14,570 | $ | (8,047 | ) | |||||||||
Mortgage
servicing rights
|
$ | -- | $ | 924 | $ | -- | $ | 924 | $ | -- | ||||||||||
Loans
held for sale (2)
|
$ | 3,391 | $ | -- | $ | -- | $ | 3,391 | $ | (52 | ) |
September
30, 2010
|
June
30, 2010
|
|||||||||||||||
Carrying
Amount
|
Estimated
Fair
Value
|
Carrying
Amount
|
Estimated
Fair
Value
|
|||||||||||||
(dollars
in thousands)
|
||||||||||||||||
Assets:
|
||||||||||||||||
Cash
and due from banks
|
$ | 30,216 | $ | 30,216 | $ | 32,831 | $ | 32,831 | ||||||||
Securities
available-for-sale
|
46,215 | 46,215 | 48,779 | 48,779 | ||||||||||||
Securities
held-to-maturity
|
9,461 | 10,057 | 10,035 | 10,710 | ||||||||||||
Loans
held-for-sale
|
1,879 | 1,879 | 3,947 | 3,961 | ||||||||||||
Loans
receivable
|
371,619 | 342,347 | 389,411 | 360,697 | ||||||||||||
Life
insurance investment
|
17,095 | 17,095 | 16,920 | 16,920 | ||||||||||||
Mortgage
servicing rights
|
868 | 868 | 924 | 1,183 | ||||||||||||
Accrued
interest receivable
|
2,225 | 2,225 | 2,158 | 2,158 | ||||||||||||
FHLB
stock
|
6,510 | 6,510 | 6,510 | 6,510 | ||||||||||||
Liabilities:
|
||||||||||||||||
Demand
deposits, savings and money
market
|
156,254 | 156,254 | 154,324 | 154,324 | ||||||||||||
Certificates
of deposit
|
203.256 | 202,095 | 201,464 | 200,976 | ||||||||||||
FHLB
advances
|
110,900 | 112,497 | 136,900 | 138,312 | ||||||||||||
Advance
payments by borrowers for taxes and insurance
|
2,247 | 2,247 | 1,423 | 1,423 |
|
•
|
the
credit risks of lending activities, including changes in the level and
trend of loan delinquencies and write offs and changes in our allowance
for loan losses and provision for loan losses that may be impacted by
deterioration in the housing and commercial real estate
markets;
|
|
•
|
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, land and other
properties and fluctuations in real estate values in our market
area;
|
|
•
|
secondary
market conditions for loans and our ability to sell loans in the secondary
market;
|
|
•
|
results
of examinations of us by the FDIC, DFI or other regulatory authorities,
including the possibility that any such regulatory authority may, among
other things, 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 the Order or other regulatory enforcement
actions;
|
|
•
|
legislative
or regulatory changes that adversely affect our business including the
effect of the Dodd-Frank Act, changes in regulatory policies and
principles, or the interpretation of regulatory capital or other
rules;
|
|
•
|
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 risks associated with the loans on our balance
sheet;
|
|
•
|
staffing
fluctuations in response to product demand or the implementation of
corporate strategies that affect our workforce 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 successfully integrate any assets, liabilities, customers,
systems, and management personnel we may in the future acquire into our
operations and out ability to realize related revenue synergies and cost
savings within expected time frames and any goodwill charges related
thereto;
|
|
•
|
increased
competitive pressures among financial services
companies;
|
|
•
|
changes
in consumer spending, borrowing and savings
habits;
|
|
•
|
the
availability of resources to address changes in laws, rules, or
regulations or to respond to regulatory
actions;
|
|
•
|
our
ability to pay dividends on our common
stock;
|
|
•
|
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 including relating to fair value accounting and
loan loss reserve requirements; and
|
|
•
|
other
economic, competitive, governmental, regulatory, and technological factors
affecting our operations, pricing, products and services and the other
risks described elsewhere in this
report.
|
Increase/(Decrease)
|
||||||||||||||||
Balance
at September 30,
2010
|
Balance
at
June
30,
2010
|
Amount
|
Percent
|
|||||||||||||
(dollars
in thousands)
|
||||||||||||||||
Cash
and amounts due from banks
|
$ | 30,216 | $ | 32,831 | $ | (2,615 | ) | (8.0 | )% | |||||||
Mortgage-backed
securities available for
sale
|
39,645 | 42,197 | (2,552 | ) | (6.0 | ) | ||||||||||
Mortgage-backed
securities, held to
maturity
|
9,307 | 9,880 | (573 | ) | (5.8 | ) | ||||||||||
Loans
receivable, net of allowance for loan
losses
|
371,619 | 389,411 | (17,792 | ) | (4.6 | ) |
Increase/(Decrease)
|
||||||||||||||||
Balance
at September 30,
2010
|
Balance
at
June
30,
2010
|
Amount
|
Percent
|
|||||||||||||
(dollars
in thousands)
|
||||||||||||||||
Noninterest-bearing
demand deposits
|
$ | 29,872 | $ | 28,718 | $ | 1,154 | 4.0 | % | ||||||||
Interest-bearing
demand deposits
|
21,047 | 25,483 | (4,436 | ) | (17.4 | ) | ||||||||||
Money
market accounts
|
74,624 | 70,367 | 4,257 | 6.0 | ||||||||||||
Savings
deposits
|
30,711 | 29,756 | 955 | 3.2 | ||||||||||||
Certificates
of deposit
|
||||||||||||||||
Retail
certificates
|
186,517 | 179,739 | 6,778 | 3.8 | ||||||||||||
Brokered
certificates
|
16,739 | 21,725 | (4,986 | ) | (23.0 | ) | ||||||||||
Total
deposit accounts
|
$ | 359,510 | $ | 355,788 | $ | 3,722 | 1.0 | % |
Three
Months Ended September 30, 2010
Compared
to Three Months Ended
September 30,
2009
|
||||||||||||
Increase
(Decrease) Due to
|
||||||||||||
Rate
|
Volume
|
Total
|
||||||||||
(in
thousands)
|
||||||||||||
Interest-earning
assets:
|
||||||||||||
Loans
receivable, net
|
$ | 181 | $ | (1,420 | ) | $ | (1,239 | ) | ||||
Mortgage-backed
securities
|
18 | (299 | ) | (281 | ) | |||||||
Investment
securities, FHLB stock
and
cash and due from banks
|
(25 | ) | (10 | ) | (35 | ) | ||||||
Total
net change in income on interest-earning assets
|
$ | 174 | $ | (1,729 | ) | $ | (1,555 | ) | ||||
|
||||||||||||
Interest-bearing
liabilities:
|
||||||||||||
Savings
deposits
|
$ | -- | $ | 2 | $ | 2 | ||||||
Interest-bearing
demand deposits
|
(16 | ) | (2 | ) | (18 | ) | ||||||
Money
market accounts
|
(194 | ) | (203 | ) | (397 | ) | ||||||
Certificates
of deposit
|
(350 | ) | (467 | ) | (817 | ) | ||||||
FHLB
advances
|
(435 | ) | (138 | ) | (573 | ) | ||||||
Total
net change in expense on interest-bearing liabilities
|
(995 | ) | (808 | ) | (1,803 | ) | ||||||
Total
increase in net interest income
|
$ | 1,169 | $ | (921 | ) | $ | 248 |
Three
Months Ended September 30,
|
||||||||||||||||||||
2010
|
2009
|
Increase/
|
||||||||||||||||||
Average
Balance
|
Yield
|
Average
Balance
|
Yield
|
(Decrease)
in Interest and Dividend Income from 2009
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Loans
receivable, net (1)
|
$ | 394,221 | 6.53 | % | $ | 483,638 | 6.35 | % | $ | (1,239 | ) | |||||||||
Mortgage-backed
securities
|
47,773 | 5.07 | 72,109 | 4.92 | (281 | ) | ||||||||||||||
Investment
securities
|
6,525 | 4.29 | 9,057 | 4.37 | (29 | ) | ||||||||||||||
FHLB
stock
|
6,510 | -- | 6,510 | -- | -- | |||||||||||||||
Cash
and due from banks
|
32,315 | 0.22 | 34,020 | 0.28 | (6 | ) | ||||||||||||||
Total
interest-earning assets
|
$ | 487,344 | 5.85 | % | $ | 605,334 | 5.48 | % | $ | (1,555 | ) |
Three
Months Ended September 30,
|
||||||||||||||||||||
2010
|
2009
|
Increase/
|
||||||||||||||||||
Average
Balance
|
Cost
|
Average
Balance
|
Cost
|
(Decrease)
in Interest Expense from 2008
|
||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||
Savings
deposits
|
$ | 30,264 | 0.77 | % | $ | 29,109 | 0.77 | % | $ | 2 | ||||||||||
Interest-bearing
demand deposits
|
22,352 | 0.30 | 23,847 | 0.59 | (18 | ) | ||||||||||||||
Money
market deposits
|
71,895 | 1.07 | 109,698 | 2.15 | (397 | ) | ||||||||||||||
Certificates
of deposit
|
205,682 | 2.90 | 256,985 | 3.60 | (817 | ) | ||||||||||||||
FHLB
advances
|
120,733 | 3.00 | 133,200 | 4.44 | (573 | ) | ||||||||||||||
Total
interest-bearing liabilities
|
$ | 450,926 | 2.36 | % | $ | 552,839 | 3.23 | % | $ | (1,803 | ) |
Three
Months Ended
September
30,
|
||||||||
2010
|
2009
|
|||||||
(dollars
in thousands)
|
||||||||
Provision
for loan losses
|
$ | 1,180 | $ | 366 | ||||
Net
charge-offs
|
6,971 | 3,875 | ||||||
Allowance
for loan losses
|
10,997 | 20,954 | ||||||
Allowance
for loan losses as a percentage of gross loans receivable at the end
of the period
|
2.9 | % | 4.4 | % | ||||
Nonaccrual
and 90 days or more past due loans
|
$ | 8,924 | $ | 44,339 | ||||
Allowance
for loan losses as a percentage of nonperforming loans at the end of
the period
|
123.2 | % | 47.3 | % | ||||
Nonaccrual
and 90 days or more past due loans as a percentage of loans
receivable at the end of the period
|
2.3 | % | 9.4 | % | ||||
Total
loans
|
$ | 383,459 | $ | 473,016 |
Three
Months Ended
September
30,
|
Increase
(decrease)
|
|||||||||||||||
2010
|
2009
|
Amount
|
Percent
|
|||||||||||||
(dollars
in thousands)
|
||||||||||||||||
Deposit
services fees
|
$ | 670 | $ | 732 | $ | (62 | ) | (8.5 | )% | |||||||
Other
deposit fees
|
219 | 198 | 21 | 10.6 | ||||||||||||
Loan
fees
|
231 | 263 | (32 | ) | (12.2 | ) | ||||||||||
Profit
(loss) on sale of loans
|
93 | 598 | (505 | ) | (84.4 | ) | ||||||||||
Other
income
|
384 | 284 | 100 | 35.2 | ||||||||||||
Total
noninterest income
|
$ | 1,597 | $ | 2,075 | $ | (478 | ) | (23.0 | )% |
Three
Months Ended
September
30,
|
Increase
(decrease)
|
|||||||||||||||
2010
|
2009
|
Amount
|
Percent
|
|||||||||||||
(dollars
in thousands)
|
||||||||||||||||
Compensation
and benefits
|
$ | 2,168 | $ | 2,192 | $ | (24 | ) | (1.1 | )% | |||||||
General
and administrative
expenses
|
1,204 | 1,235 | (31 | ) | (2.5 | ) | ||||||||||
Real
estate owned impairment
|
493 | -- | 493 | N/A | ||||||||||||
FDIC
Insurance premium
|
313 | 450 | (137 | ) | (30.4 | ) | ||||||||||
Information
technology
|
487 | 469 | 18 | 3.8 | ||||||||||||
Occupancy
and equipment
|
573 | 620 | (47 | ) | (7.6 | ) | ||||||||||
Deposit
services
|
181 | 239 | (58 | ) | (24.3 | ) | ||||||||||
Marketing
|
129 | 107 | 22 | 20.6 | ||||||||||||
Net
loss on sale of REO
|
(20 | ) | 16 | (36 | ) | (225.0 | ) | |||||||||
Loss
on sale of property,
premises
and equipment
|
-- | 1 | (1 | ) | N/A | |||||||||||
Total
noninterest expense
|
$ | 5,528 | $ | 5,329 | $ | 199 | 3.7 | % |
Amount
of Commitment
Expiration
Per Period
|
||||||||
Total
Amounts
Committed
|
Due
in
One
Year
|
|||||||
|
(dollars
in thousands)
|
|||||||
Commitments
to originate loans
|
$ | 533 | $ | 533 | ||||
Lines
of Credit (1)
|
||||||||
Fixed
rate (2)
|
$ | 11,570 | $ | 11,570 | ||||
Adjustable
rate
|
$ | 26,803 | $ | 26,803 | ||||
Undisbursed
balance of loans closed
|
$ | 38,906 | $ | 38,906 | ||||
(1)
At September 30, 2010 there were no reserves for unfunded
commitments.
(2) Stand by Letters of Credit included.
|
|
•
|
economic
conditions;
|
|
•
|
interest
rate outlook;
|
|
•
|
asset/liability
mix;
|
|
•
|
interest
rate risk sensitivity;
|
|
•
|
change
in net interest income;
|
|
•
|
current
market opportunities to promote specific
products;
|
|
•
|
historical
financial results;
|
|
•
|
projected
financial results; and
|
|
•
|
capital
position.
|
|
•
|
increased
originations of shorter term loans and particularly, home equity loans and
commercial business loans;
|
|
•
|
structured
certain borrowings with maturities that match fund the loan portfolios;
and
|
|
•
|
securitized
single family loans to available for sale investments which generates cash
flow as well as allows the flexibility of managing interest rate risk as
well as selling the investment when
appropriate.
|
(a)
|
Not
applicable.
|
3.1
|
Articles
of Incorporation of the Registrant (1)
|
3.2
|
Bylaws
of the Registrant (1)
|
10.1
|
Form
of Anchor Bank Employee Severance Compensation Plan (1)
|
10.2
|
Anchor
Mutual Savings Bank Phantom Stock Plan (1)
|
10.3
|
Form
of 401(k) Retirement Plan (1)
|
31.1
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act
|
31.2
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act
|
32
|
Certification
Pursuant to Section 906 of the Sarbanes-Oxley
Act
|
(1)
|
Filed
as an exhibit to the Registrant’s Registration Statement on Form S-1
(333-154734)
|
ANCHOR BANCORP | |
Date: December 20, 2010 | /s/Jerald L. Shaw |
Jerald L. Shaw | |
President and Chief Executive Officer | |
(Principal Executive Officer) | |
Date: December 20, 2010 | /s/Terri L. Degner |
Terri
L. Degner
|
|
Executive
Vice President and
|
|
Chief
Financial Officer
(Principal
Financial and Accounting Officer)
|
31.1
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act
|
31.2
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act
|
32
|
Certification
Pursuant to Section 906 of the Sarbanes-Oxley
Act
|