MADISON, Wis., May 24, 2013 (GLOBE NEWSWIRE) -- Anchor BanCorp Wisconsin Inc. (OTC Market:ABCW) today announced a net loss available to common equity of $17.5 million, or $0.82 per common share, for the three months ended March 31, 2013. This compares to a net loss available to common equity of $15.1 million, or $0.71 per common share and $7.4 million, or $0.35 per common share, for the three months ended December 31, 2012 and March 31, 2012, respectively. For the fiscal year ended March 31, 2013, net loss available to common equity was $48.1 million, compared to $50.4 million in the prior year.

Financial Highlights

• AnchorBank, fsb (the "Bank) remains adequately capitalized¹ for the eleventh consecutive quarter.
• Tier 1 leverage and total risk-based capital ratios of 4.53 percent and 9.02 percent each decreased by 31 basis points during the quarter but increased 2 and 60 basis points, respectively, over the past twelve months.
• Total assets fell during the past twelve months, decreasing by $421.9 million or 15.1 percent to $2.4 billion at March 31, 2013.
• Non-performing loans decreased 18.8 percent to $118.8 million at March 31, 2013 from $146.4 million at December 31, 2012 and 47.2 percent from $224.9 million at March 31, 2012.
• Net charge-offs decreased by $7.1 million in the current quarter to $4.6 million from $11.7 million in the quarter ending December 31, 2012.
• Gross return on mortgage banking totaled $5.3 million in the current quarter, a decrease of $2.5 million, or 32.1 percent, from $7.8 million in the preceding quarter; and $2.5 million lower than the $7.8 million reported in the same period a year ago.
• Cost of funds declined 4 basis points to 1.35 percent in the quarter ending March 31, 2013 compared to 1.39 percent in the preceding quarter, and declined 37 basis points compared to 1.72 percent in the year ago quarter as the Bank continued to carefully manage deposit pricing.
• Deposit mix improved again this quarter as lower cost checking, savings, money market and escrow funds represent 67.5 percent of total deposits at March 31, 2013, up from 64.7 percent at December 31, 2012 and 57.2 percent at March 31, 2012.

______________

¹ Under standard regulatory requirements, a bank must have a tier 1 leverage ratio of 4.0 percent or greater and a total risk-based capital ratio of 8.0 percent or greater to be considered adequately capitalized.

Bank Capital Ratios

The Bank's tier 1 leverage and total risk-based capital ratios of 4.53 percent and 9.02 percent at March 31, 2013 each decreased by 31 basis points compared to December 31, 2012. The ratios declined as tier 1 and total risk-based capital fell 8.2 percent and 7.7 percent, respectively, during the quarter primarily due to the net loss in the period totaling $9.3 million. Adjusted total assets and risk-weighted assets of $2.4 billion and $1.4 billion, respectively, at March 31, 2013 decreased 1.9 percent and 4.4 percent, respectively, during the quarter benefitting the capital ratios. Lower adjusted and risk-weighted asset totals reflect a $67.7 million decrease in net loans held for investment during the period. 

While the Bank remains adequately capitalized, the Corporation, as the holding company of the Bank, continues to be burdened with significant senior debt and preferred stock obligations:

• The Corporation currently owes $116.3 million of loan principal to various lenders led by U.S. Bank under a credit agreement that matures June 30, 2013. In addition, accrued but unpaid interest and fees totaling $60.2 million associated with this obligation are also due and payable at maturity.
• The Corporation issued $110 million in preferred stock in January 2009 to the United States Treasury pursuant to the Treasury's Capital Purchase Program ("CPP"). As permitted under the CPP program, the Corporation has deferred 16 quarterly preferred stock dividend payments to the Treasury; resulting in total unpaid dividends of $25.3 million, including compounding.  
• While the Bank has substantial liquidity, it is currently precluded by its regulators from paying dividends to the Corporation for purposes of repayment of the foregoing obligations.

The Corporation continues to work with Sandler O'Neill & Partners, L.P. as its financial advisor in efforts to address its capital needs.

Financial Results

Financial results for the fourth quarter ended March 31, 2013, include:

• Net interest margin improved to 2.62 percent for the three months ended March 31, 2013, from 2.35 percent for the same period in the previous year. Interest income decreased $5.4 million or 19.3 percent for the three months ended March 31, 2013, as compared to the same period in the prior year. This change was primarily due to a decline in average balances in the loan portfolio as principal repayments again outpaced new loan origination activity. Interest expense decreased $4.4 million or 35.7 percent for the three months ended March 31, 2013, as compared to the same period in the prior year, due to a planned reduction in high yield certificates of deposit. As a result, the cost of deposits declined from 0.83% to 0.34% when compared to the prior year quarter. 
• The provision for credit losses decreased $3.8 million to $0.8 million for the three months ended March 31, 2013 compared to $4.6 million in the same period in the previous year. The improvement reflected the relatively steady quarter-over-quarter decrease in non-performing loans since June 2010.
• Non-interest income totaled $7.5 million, down $5.5 million compared to the same period in the previous year. The decrease was primarily due to lower gains on the sale of residential mortgage loans and a cash surrender value adjustment on bank-owned life insurance policies. 
• Total non-interest expense increased by $7.3 million to $35.5 million from $28.2 million in the same period in 2012. The unfavorable variance was primarily due to higher OREO expenses reflecting an increase in the valuation allowance on repossessed property. Other non-interest expense also increased as realized and unrealized losses on the repurchase of serviced loans spiked during the current quarter.

"We are pleased to report our eleventh consecutive quarter of capital ratios above the threshold to be considered adequately capitalized," stated Chris Bauer, President and Chief Executive Officer of the Corporation and the Bank. "We are also encouraged by a favorable trend in the net interest margin as this ratio has been moving higher over the past several quarters reflecting the impact of lower non-performing loans and continued pricing discipline on deposits. Despite lower asset totals again this quarter, we are continuing to make progress on implementing strategies to improve Bank financial results by slowing asset runoff to further improve our net interest margin," Bauer added.

Credit Quality

Certain key credit related metrics continue to trend favorably with loans 30 to 89 days past due falling again this quarter to $24.4 million as of March 31, 2013 from $31.6 million at December 31, 2012 and $30.6 million at March 31, 2012. Non-performing loans of $118.8 million at March 31, 2013 were lower than the preceding quarter and the year ago quarter, decreasing $27.6 million and $106.1 million, respectively. The impact of these trends contributed significantly to the lower provision for credit losses in the current quarter. Despite the decrease in provision for credit losses in the current quarter compared to the prior year quarter, the allowance for loan loss at 67.19 percent of non-performing loans at March 31, 2013 rose sharply compared to 57.23 percent at December 31, 2012. Other real estate owned, net of valuation allowance, also decreased during the quarter to $84.3 million, falling $5.7 million during the quarter but only $4.5 million lower than a year ago reflecting the somewhat irregular financial statement impact of the resolution process for non-performing loans.

Mortgage Banking

Gross returns on residential mortgage banking totaled $5.3 million for the quarter ending March 31, 2013 compared to $7.8 million in both the preceding and year ago quarters. Lower returns in the quarter ending March 31, 2013 were largely due to a decrease in gain on sale of mortgages over the comparable prior periods, reflecting narrowing margins on the sale of production into the secondary market and a drop in origination volume during the period. OMSR (impairment) / recovery quarterly results improved primarily as a result of the increase  in mortgage market interest rates as the current quarter reflected a 9 basis point increase in the 10-year Treasury rate. OMSR results are highly sensitive to changes in mortgage market interest rates as mortgage holders tend to hold onto mortgages when rates rise. Loan servicing results also reflect the impact of rising interest rates as OMSR amortization expense decreased compared to the year ago period. Residential mortgage origination volume fell to $169.3 million in the current quarter compared to $283.3 million in the preceding quarter and $294.2 million in the year ago quarter as the uptick in interest rates during the quarter has served to dampen industry-wide customer demand for this product.

About Anchor BanCorp Wisconsin Inc.

Anchor BanCorp Wisconsin Inc.'s stock is traded in the over-the-counter market under the symbol ABCW. AnchorBank, fsb (the "Bank"), the wholly owned subsidiary, has 55 offices. All are located in Wisconsin.

Forward-Looking Statements

This news release contains certain forward-looking statements, as that term is defined in the U.S. federal securities laws. In the normal course of business, we, in an effort to help keep our shareholders and the public informed about our operations, may from time to time issue or make certain statements, either in writing or orally, that are or contain forward-looking statements. Generally, these statements relate to business plans or strategies, projected or anticipated benefits from acquisitions or dispositions made by or to be made by us, projections involving anticipated revenues, earnings, liquidity, profitability or other aspects of operating results or other future developments in our affairs or the industry in which we conduct business. Although we believe that the anticipated results or other expectations reflected in our forward-looking statements are based on reasonable assumptions, we can give no assurance that those results or expectations will be attained. You should not put undue reliance on any forward-looking statements. Forward-looking statements speak only as of the date they are made and we undertake no obligation to update them in light of new information or future events, except to the extent required by federal securities laws. Please refer to our Annual Report for the fiscal year ending March 31, 2013 on Form 10-K, as filed with the Securities and Exchange Commission, for a more comprehensive discussion of forward-looking statements and the risks and uncertainties associated with our business.

CONTACT: For more information, contact
         Emily Campbell, VP - Marketing & Communications
         (608) 252-1436