<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
COMMISSION FILE NUMBER: 0-20006
ANCHOR BANCORP WISCONSIN INC.
-----------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Wisconsin 39-1726871
--------- ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
25 West Main Street
Madison, Wisconsin 53703
------------------- -----
(Address of principal executive office) (Zip Code)
(608) 252-8700
--------------
Registrant's telephone number, including area code
Not Applicable
--------------
(Former name, former address, and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.
Yes /X/ No / /
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class: Common stock -- $.10 Par Value
Number of shares outstanding as of October 31, 1996: 4,625,824
<PAGE>
ANCHOR BANCORP WISCONSIN INC.
INDEX - FORM 10-Q
PART I - FINANCIAL INFORMATION PAGE #
------
Item 1 Financial Statements (Unaudited)
Consolidated Balance Sheets as of September 30, 1996
and March 31, 1996 2
Consolidated Statements of Income for the Three and Six
Months Ended September 30, 1996 and 1995 3
Consolidated Statements of Cash Flows for the
Six Months Ended September 30, 1996 and 1995 4
Notes to Unaudited Consolidated Financial
Statements 6
Item 2 Management's Discussion and Analysis
Results of Operations 9
Financial Condition 12
Asset Quality 14
Liquidity & Capital Resources 17
Asset/Liability Management 18
PART II - OTHER INFORMATION
Item 1 Legal Proceedings 21
Item 2 Changes in Securities 21
Item 3 Defaults Upon Senior Securities 21
Item 4 Submission of Matters to Vote of Security Holders 21
Item 5 Other Information 22
Item 6 Exhibits and Reports on Form 8-K 22
SIGNATURES 23
1
<PAGE>
ANCHOR BANCORP WISCONSIN INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1996 1996
------------- ---------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Cash $ 32,691 $ 35,454
Federal funds sold 14,912 7,525
Interest-bearing deposits -- 710
---------- ----------
Cash and cash equivalents 47,603 43,689
Securities available for sale:
Investment securities 56,875 30,241
Mortgage-related securities 96,372 110,268
Securities held to maturity:
Investment securities (fair value of $7.0 million and $2.6 million,
respectively) 7,051 2,596
Mortgage-related securities (fair value of $159.3 million
and $109.9 million, respectively) 162,943 110,730
Loans receivable, net:
Held for sale 5,447 13,968
Held for investment 1,428,446 1,361,080
Foreclosed properties and repossessed assets, net 6,494 6,077
Real estate held for development and sale 10,076 13,640
Office properties and equipment 18,639 18,906
Federal Home Loan Bank stock--at cost 18,881 16,019
Accrued interest on investments and loans 13,069 11,549
Prepaid expenses and other assets 19,688 15,793
---------- ----------
Total assets $1,891,584 $1,754,556
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $1,292,509 $1,240,958
Notes payable to Federal Home Loan Bank 370,119 316,869
Reverse repurchase agreements 66,629 47,582
Other loans payable 5,301 7,031
Advance payments by borrowers for taxes and insurance 22,522 7,938
Other liabilities 23,982 15,776
---------- ----------
Total liabilities 1,781,062 1,636,154
---------- ----------
Preferred stock, $.10 par value, 5,000,000 shares
authorized, none outstanding -- --
Common stock, $.10 par value, 20,000,000 shares
authorized, 6,249,662 shares issued 625 625
Additional paid-in capital 50,409 50,086
Retained earnings 103,134 100,191
Less: Treasury stock (1,621,088 shares and 1,315,312 shares, respectively) (39,915) (29,298)
Deferred compensation due employees (928) (928)
Common stock purchased by recognition plans (1,310) (1,546)
Unrealized losses on securities available for sale, net of tax (1,493) (728)
---------- ----------
Total stockholders' equity 110,522 118,402
---------- ----------
Total liabilities and stockholders' equity $1,891,584 $1,754,556
---------- ----------
---------- ----------
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements.
2
<PAGE>
ANCHOR BANCORP WISCONSIN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ----------------
1996 1995 1996 1995
---- ---- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Interest income:
Loans $29,615 $26,731 $59,340 $51,958
Mortgage-related securities 4,117 3,966 7,600 6,728
Investment securities 1,163 974 2,072 1,722
Interest-bearing deposits 142 117 316 170
------- ------- ------- -------
Total interest income 35,037 31,788 69,328 60,578
Interest expense:
Deposits 14,991 13,853 29,458 26,150
Notes payable and other borrowings 6,193 4,967 12,007 9,196
Other 180 175 289 281
------- ------- ------- -------
Total interest expense 21,364 18,995 41,754 35,627
------- ------- ------- -------
Net interest income 13,673 12,793 27,574 24,951
Provision for loan losses -- 150 -- 325
------- ------- ------- -------
Net interest income after provision for loan losses 13,673 12,643 27,574 24,626
Non-interest income:
Loan servicing income 752 711 1,456 1,337
Service charges on deposits 939 832 1,821 1,496
Insurance commissions 418 217 737 431
Net gain on sale of loans 251 242 408 401
Other 2,954 312 4,861 638
------- ------- ------- -------
Total non-interest income 5,314 2,314 9,283 4,303
Non-interest expenses:
Compensation 5,193 4,866 10,725 9,231
Occupancy 720 709 1,474 1,340
Federal insurance premiums 714 671 1,419 1,283
Federal insurance special assessment 7,663 -- 7,663 --
Furniture and equipment 705 632 1,425 1,162
Data processing 526 527 1,027 1,002
Marketing 533 432 1,051 877
Net cost (income) of operations of foreclosure properties 178 (26) 206 (15)
Other 3,075 1,587 5,048 2,900
------- ------- ------- -------
Total non-interest expenses 19,307 9,398 30,038 17,780
------- ------- ------- -------
Income (loss) before income taxes (320) 5,559 6,819 11,149
Income taxes (benefit) (390) 1,968 2,214 3,949
------- ------- ------- -------
Net income $ 70 $ 3,591 $ 4,605 $ 7,200
------- ------- ------- -------
------- ------- ------- -------
Earnings per share:
Primary $ 0.01 $ 0.65 $ 0.93 $ 1.34
Fully Diluted 0.01 0.65 0.93 1.34
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements.
3
<PAGE>
ANCHOR BANCORP WISCONSIN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30,
----------------
1996 1995
---- ----
(IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 4,605 $ 7,200
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for losses on loans and real estate -- 450
Provision for depreciation and amortization 1,036 891
Loans originated for sale (66,827) (92,887)
Proceeds from sales of loans held for sale 75,756 87,796
Net gain on sales of loans and securities (408) (236)
Increase in accrued interest receivables (1,520) (1,165)
Increase in accrued interest payable 2,007 975
Increase in accounts payable 6,636 1,907
Other (4,549) 41
---------- --------
Net cash provided by operating activities 16,736 4,972
INVESTING ACTIVITIES
Proceeds from sales of investment securities available for sale -- 5,772
Purchase of investment securities available for sale (26,882) (27,541)
Purchase of investment securities held to maturity (4,453) --
Proceeds from maturities of investment securities -- 1,275
Purchase of mortgage-related securities available for sale -- (596)
Purchase of mortgage-related securities held to maturity (12,974) (2,055)
Principal collected on mortgage-related securities 28,502 19,284
Net increase in loans receivable (123,089) (55,928)
Purchase of office properties and equipment (785) (1,529)
Sales of office properties and equipment 35 74
Sales of real estate 9,933 2,117
Purchase of real estate held for sale (6,011) (1,731)
Increase in capitalized expense on real estate (10) (48)
--------- --------
Net cash used by investing activities (135,734) (60,906)
</TABLE>
4
<PAGE>
ANCHOR BANCORP WISCONSIN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30,
----------------
1996 1995
---- ----
(IN THOUSANDS)
<S> <C> <C>
FINANCING ACTIVITIES
Increase in deposits $ 50,040 $ 40,438
Increase in advance payments by
borrowers for taxes and insurance 14,584 13,628
Proceeds of notes payable to Federal Home Loan Bank 340,300 235,600
Repayment of notes payable to Federal Home Loan Bank (287,050) (241,200)
Increase in securities sold under agreements to repurchase 19,047 31,616
Decrease in other loans payable (1,730) --
Treasury stock purchased (11,379) (8,229)
Sale of treasury stock for American purchase -- 3,486
Reissuance of treasury stock for options 190 171
Payments of cash dividends to stockholders (1,090) (832)
--------- ---------
Net cash provided by financing activities 122,912 74,678
--------- ---------
Increase in cash and cash equivalents 3,914 18,744
Cash and cash equivalents at beginning of period 43,689 28,865
--------- ---------
Cash and cash equivalents at end of period $ 47,603 $ 47,609
--------- ---------
--------- ---------
Supplementary cash flow information:
Cash paid or credited to accounts:
Interest on deposits and borrowings $ 39,747 $ 34,652
Income taxes 5,441 4,537
Non-cash transactions:
Mortgage loans transferred to loans held for sale -- 2,573
Loans transferred to foreclosed properties 785 615
Mortgage loans held for investment converted into
mortgage-backed securities held to maturity 54,938 96,772
Securities available for sale market value adjustment (1,276) 945
American Equity BanCorp purchase:
Investment securities available for sale -- (2,390)
Mortgage-related securities available for sale -- (954)
Loans held for sale -- (5,969)
Loans receivable -- (85,244)
Office properties and equipment -- (1,314)
Federal Home Loan Bank stock -- (1,346)
Other assets -- (4,022)
Deposits -- 64,803
Notes payable to Federal Home Loan Bank -- 26,314
Other liabilities -- 1,038
Treasury stock issued -- 7,698
Other stockholders' equity -- 1,273
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements.
5
<PAGE>
ANCHOR BANCORP WISCONSIN INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - PRINCIPLES OF CONSOLIDATION
The unaudited consolidated financial statements include the accounts and
results of operations of Anchor BanCorp Wisconsin Inc. (the "Corporation")
and its wholly-owned subsidiaries, AnchorBank, S.S.B. (the "Bank") and
Investment Directions, Inc. ("IDI"). The Bank's statements include its
wholly-owned subsidiaries, Anchor Insurance Services, Inc. ("AIS"), ADPC
Corporation ("ADPC"), Anchor Investment Corporation ("AIC"), Anchor Financial
Corp. ("AFC") and ADPC II LLC ("ADPC II"). All significant intercompany
balances and transactions have been eliminated. Investments in joint
ventures and other less than 50% owned partnerships, which are not material,
are accounted for on the equity method. Partnerships over 50% ownership are
consolidated, with significant intercompany accounts eliminated.
NOTE 2 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles ("GAAP")
and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by GAAP for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation of the consolidated financial statements
have been included.
In preparing the consolidated financial statements in conformity with
generally accepted accounting principles, management is required to make
estimates and assumptions that affect the amounts reported in the
consolidated financial statements and accompanying notes. Actual results
could differ from those estimates. The results of operations and other data
for the three and six month periods ended September 30, 1996 are not
necessarily indicative of results that may be expected for any other interim
period or the entire year ending March 31, 1997. The unaudited consolidated
financial statements presented herein should be read in conjunction with the
audited consolidated financial statements and related notes thereto included
in the Corporation's Annual Report for the year ended March 31, 1996.
NOTE 3 - STOCKHOLDERS' EQUITY
On July 15, 1996, 29,500 shares of the management recognition plan were
earned by the recipients. During the quarter ended September 30, 1996,
14,690 shares of stock options were exercised at a weighted price of $8.86
per share. Treasury shares were issued in exchange for the options using the
last-in-first-out method. The net loss of $386,500 was
6
<PAGE>
accounted for as an adjustment to retained earnings. During the quarter
ended September 30, 1996, the Corporation repurchased 225,501 shares of
common stock on the open market for an average price of $35.19. On August
15, 1996, the Corporation paid out a cash dividend of $.125 per share,
amounting to $598,548.
NOTE 4 - EARNINGS PER SHARE
Earnings per share for the three and six months ended September 30, 1996 and
1995 have been determined by dividing net income for the respective periods
by the weighted average number of shares of common stock and common stock
equivalents outstanding. Stock options are regarded as common stock
equivalents and are therefore considered in both primary and fully diluted
earnings per share calculations. Common stock equivalents are computed using
the treasury stock method. The weighted average number of shares of common
stock and common stock equivalents outstanding for September 30, 1995 have
been adjusted to reflect the five-for-four stock split distributed on
October, 1995.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
----------------------------------------------------
1996 1995
---------------------- -----------------------
PRIMARY FULLY DILUTED PRIMARY FULLY DILUTED
------- ------------- ------- -------------
<S> <C> <C> <C> <C>
Net income $ 69,997 $ 69,997 $3,590,793 $3,590,793
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average common shares
outstanding 4,646,480 4,646,480 5,299,355 5,299,355
Common stock equivalents based on the
treasury stock method 232,079 225,222 220,923 238,231
---------- ------------ ---------- ----------
Total weighted average common shares
and equivalents outstanding 4,878,559 4,871,702 5,520,278 5,537,586
---------- ------------ ---------- ----------
---------- ------------ ---------- ----------
Earnings per share $ 0.01 $ 0.01 $ 0.65 $ 0.65
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
<CAPTION>
SIX MONTHS ENDED SEPTEMBER 30,
--------------------------------------------------
1996 1995
---------------------- -----------------------
PRIMARY FULLY DILUTED PRIMARY FULLY DILUTED
------- ------------- ------- -------------
<S> <C> <C> <C> <C>
Net income $4,605,274 $4,605,274 $7,199,949 $7,199,949
---------- ------------ ---------- ----------
---------- ------------ ---------- ----------
Weighted average common shares
outstanding 4,741,172 4,741,172 5,140,315 5,140,315
Common stock equivalents based on the
treasury stock method 230,819 232,973 201,891 242,754
---------- ------------ ---------- ----------
Total weighted average common shares
and equivalents outstanding 4,971,991 4,974,145 5,342,206 5,383,069
---------- ------------ ---------- ----------
---------- ------------ ---------- ----------
Earnings per share $ 0.93 $ 0.93 $ 1.34 $ 1.34
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
7
<PAGE>
NOTE 5 - CONTINGENT LIABILITIES
The Bank had previously entered into agreements whereby, for an annual fee,
certain mortgage-backed securities were pledged as collateral for industrial
revenue bonds for unrelated third party borrowers. As of September 30, 1996,
the industrial revenue bonds were paid off. The Bank does not anticipate
entering into any more of these agreements.
NOTE 6 - SUBSEQUENT EVENTS
On October 18, 1996, the Corporation announced that its Board of Directors
declared an $.125 per share cash dividend to be paid on November 15, 1996 to
stockholders of record on November 1, 1996.
NOTE 7 - REGULATORY ISSUES
On September 30, 1996, the Omnibus Appropriations Act of 1997 was signed into
law. Among other things, this law provided for the recapitalization of the
Savings Association Insurance Fund ("SAIF") of the Federal Deposit Insurance
Corporation and resulted in a one-time charge to all institutions with
SAIF-insured deposits of 0.657% of SAIF-insured deposits held as of March 31,
1995. The effect on the Bank of the charge on second quarter fiscal 1997
results was $7.7 million before tax and $4.6 million net of tax, or $0.94 per
share. The law also resulted in a reduction of the Bank's annual SAIF
assessment rate from 0.23% to 0.064% of applicable deposits effective
January 1, 1997.
8
<PAGE>
ANCHOR BANCORP WISCONSIN INC.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
GENERAL. Net income for the three and six months ended September 30, 1996
decreased to $70,000 and $4.6 million, respectively, as compared to $3.6
million and $7.2 million, respectively, for the same periods in the prior
year. The decrease in net income for the periods was due to the one-time
charge of $7.7 million, net of $3.1 million in income taxes, associated with
the recapitalization of the SAIF. Additional changes included (i) an
increase in net interest income of $880,000 and $2.6 million, respectively,
for the three and six months ended September 30, 1996 compared to the same
periods last year and (ii) an increase in non-interest income of $3.0 million
and $5.0 million, respectively, which were partially offset by an increase in
non-interest expenses of $2.2 million and $4.6 million, respectively,
exclusive of the SAIF one-time charge.
Exclusive of the one-time charge to recapitalize the SAIF, the Corporation's
net income would have been $4.7 million or $0.95 per share for the three
months ended September 30, 1996, as compared to $3.6 million or $0.65 per
share for the comparable period in 1995, and the Corporation's net income
would have been $9.2 million or $1.85 per share for the six months ended
September 30, 1996, as compared to $7.2 million or $1.34 per share for the
same period in the prior year.
NET INTEREST INCOME. Net interest income increased $880,000 and $2.6
million, respectively, for the three and six months ended September 30, 1996
compared to the same periods in 1995. The net interest margin decreased to
3.07% from 3.17% and to 3.15% from 3.22%, respectively for the periods. The
interest rate spread decreased to 2.87% from 2.89% and to 2.94% from 2.95%,
respectively for the periods.
Interest income on loans increased $2.9 million and $7.4 million,
respectively, for the three and six month periods ended September 30, 1996 as
compared to the same periods in the prior year. This was primarily a result
of the increase of $139.9 million and $154.9 million, respectively, in the
average balance of loans for the periods due to the increased origination of
portfolio loans. Interest income on mortgage-related securities increased
$151,000 and $872,000, respectively, for the same periods due to the increase
of $8.6 million and $27.6 million, respectively, in the average balance of
mortgage-related securities.
Interest expense on deposits increased $1.1 million and $3.3 million,
respectively, for the three and six month periods ended September 30, 1996 as
compared to the same periods in 1995. The increase was due primarily to the
increase in the average balance of deposits of $91.3 million and $116.9
million, respectively, as a result of various demand deposit and certificate
promotions. The average rate on deposits increased from 4.71% and 4.61%,
respectively, to 4.73% and 4.70%, respectively, during the three and six
months ended September 30, 1996 and 1995, respectively, primarily as a result
of the above-described
9
<PAGE>
deposit promotions. Interest expense on notes payable
and other borrowings increased $1.2 million and $2.8 million, respectively,
during the same periods. This was a result of an increase of $94.1 million
and $99.9 million, respectively, in the average balance of borrowings during
the same periods.
The following tables show the Corporation's average balances, interest,
average rates and the spread between the combined average rates earned on
interest-earning assets and average cost of interest-bearing liabilities for
the periods indicated. The average balances are derived from average daily
balances.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
---------------------------------------------------------------------
1996 1995
--------------------------------- --------------------------------
AVERAGE AVERAGE
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST COST (1) BALANCE INTEREST COST (1)
------- -------- -------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
INTEREST-EARNING ASSETS
Mortgage loans $1,136,388 $22,386 7.88% $1,042,790 $20,627 7.91%
Consumer loans 275,802 6,571 9.53 233,438 5,476 9.38
Commercial business loans 27,213 658 9.67 23,301 628 10.78
---------- ------- ---------- -------
Total loans receivable 1,439,403 29,615 8.23 1,299,529 26,731 8.23
Mortgage-related securities 255,639 4,117 6.44 247,077 3,966 6.42
Investment securities 59,022 850 5.76 44,008 675 6.14
Interest-bearing deposits 10,961 142 5.18 7,674 117 6.10
Federal Home Loan Bank stock 18,395 313 6.81 17,599 299 6.80
----------- ------- ---------- -------
Total interest-earning assets 1,783,420 35,037 7.86 1,615,887 31,788 7.87
Non-interest-earning assets 62,372 51,070
---------- ----------
Total assets $1,845,792 $1,666,957
---------- ----------
---------- ----------
INTEREST-BEARING LIABILITIES
Demand deposits $ 291,429 1,904 2.61 $210,065 951 1.81
Regular passbook savings 103,984 600 2.31 112,161 659 2.35
Certificates of deposit 871,265 12,487 5.73 853,154 12,243 5.74
---------- ------- ---------- -------
Total deposits 1,266,678 14,991 4.73 1,175,380 13,853 4.71
Notes payable and other borrowings 426,151 6,193 5.81 332,013 4,967 5.98
Other 19,160 180 3.76 18,202 175 3.85
---------- ------- ---------- -------
Total interest-bearing liabilities 1,711,989 21,364 4.99 1,525,595 18,995 4.98
-------- ----- ------- ----
Non-interest-bearing liabilities 17,865 18,389
---------- ----------
Total liabilities 1,729,854 1,543,984
Stockholders' equity 115,938 122,973
---------- ----------
Total liabilities and stockholders' equity $1,845,792 $1,666,957
---------- ----------
---------- ----------
Net interest income/interest rate spread $13,673 2.87% $12,793 2.89%
------- ---- ------- ----
------- ---- ------- ----
Net interest-earning assets $ 71,431 $ 90,292
---------- ----------
---------- ----------
Net interest margin 3.07% 3.17%
---- ----
---- ----
Ratio of average interest-earning assets
to average interest-bearing liabilities 1.04 1.06
---- ----
---- ----
</TABLE>
- ---------------
(1) Annualized
10
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED SEPTEMBER 30,
---------------------------------------------------------------------
1996 1995
-------------------------------- --------------------------------
AVERAGE AVERAGE
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST COST (1) BALANCE INTEREST COST (1)
------- -------- -------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
INTEREST-EARNING ASSETS
Mortgage loans $1,136,966 $44,947 7.91% $1,034,530 $40,545 7.84%
Consumer loans 267,098 12,980 9.72 221,060 10,204 9.23
Commercial business loans 28,521 1,413 9.91 22,071 1,209 10.96
---------- ------- ---------- -------
Total loans receivable 1,432,585 59,340 8.28 1,277,661 51,958 8.13
Mortgage-related securities 237,923 7,600 6.39 210,280 6,728 6.40
Investment securities 51,199 1,474 5.76 37,810 1,159 6.13
Interest-bearing deposits 11,171 316 5.66 5,631 170 6.04
Federal Home Loan Bank stock 17,666 598 6.77 16,920 563 6.65
---------- ------- ---------- -------
Total interest-earning assets 1,750,544 69,328 7.92 1,548,302 60,578 7.83
Non-interest-earning assets 63,573 50,070
---------- ----------
Total assets $1,814,117 $1,598,372
---------- ----------
---------- ----------
INTEREST-BEARING LIABILITIES
Demand deposits $ 285,039 3,686 2.59 $ 193,674 1,637 1.69
Regular passbook savings 105,175 1,209 2.30 109,160 1,262 2.31
Certificates of deposit 862,154 24,563 5.70 832,672 23,251 5.58
---------- ------- ---------- -------
Total deposits 1,252,368 29,458 4.70 1,135,506 26,150 4.61
Notes payable and other borrowings 409,973 12,007 5.86 310,078 9,196 5.93
Other 15,688 289 3.68 15,360 281 3.66
---------- ------- ---------- -------
Total interest-bearing liabilities 1,678,029 41,754 4.98 1,460,944 35,627 4.88
------- ---- ------- ----
Non-interest-bearing liabilities 18,026 18,714
---------- ----------
Total liabilities 1,696,055 1,479,658
Stockholders' equity 118,062 118,714
---------- ----------
Total liabilities and stockholders' equity $1,814,117 $1,598,372
---------- ----------
---------- ----------
Net interest income/interest rate spread $27,574 2.94% $24,951 2.95%
------- ---- ------- ----
------- ---- ------- ----
Net interest-earning assets $ 72,515 $ 87,358
---------- ----------
---------- ----------
Net interest margin 3.15% 3.22%
---- ----
---- ----
Ratio of average interest-earning assets
to average interest-bearing liabilities 1.04 1.06
---- ----
---- ----
</TABLE>
- ---------------
(1) Annualized
11
<PAGE>
PROVISION FOR LOAN LOSSES. Provision for loan losses decreased $150,000 and
$325,000, respectively, during the three and six months ended September 30,
1996 as compared to the same periods in 1995. See "Asset Quality" for
further discussion.
NON-INTEREST INCOME. Non-interest income increased $3.0 million and $5.0
million, respectively, during the three and six months ended September 30,
1996 as compared to the same periods in the prior year primarily as a result
of increased partnership income from partnerships of the Corporation and IDI
totalling $2.7 million and $4.3 million, respectively.
NON-INTEREST EXPENSE. Non-interest expense increased $9.9 million and $12.3
million, respectively, during the three and six month periods ended September
30, 1996 as compared to the same periods in 1995 as a result of several
factors. The majority of these increases was due to the one-time charge
during the current quarter of $7.7 million associated with the
recapitalization of the SAIF. (Exclusive of this one-time charge,
non-interest expenses increased by $2.2 million and $4.6 million,
respectively, during the three and six month periods ended September 30,
1996, as compared to the same periods in 1995.) Compensation expense
increased $327,000 and $1.5 million, respectively, due primarily to increases
in staff, salaries and benefits as a result of additional offices, as well as
additional incentives for lending staff. Furniture and occupancy expenses
increased $84,000 and $397,000, respectively, primarily due to increased
depreciation and other costs from additional offices. Other expenses
increased $1.5 million and $2.1 million, respectively, during the periods due
to increases in the minority interest in net income of consolidated
partnerships ($1.4 million and $1.8 million, respectively, during the three
and six months ended September 30, 1996), goodwill amortization and legal
fees.
INCOME TAXES. Income tax expense decreased $2.4 million and $1.7 million,
respectively, during the three and six months ended September 30, 1996 as
compared to the same periods in 1995. These decreases were attributable to
the tax effect of the one-time charge associated with the SAIF
recapitalization which was $3.1 million. The effective tax rates were
121.88% and 32.47% as compared to 35.40% and 35.42%, respectively, for the
same periods. Exclusive of the one-time charge to recapitalize the SAIF and
related tax effect, the effective tax rates were 36.58% and 36.53%,
respectively, during the three and six months ended September 30, 1996, as
compared to 35.40% and 35.42% during the same periods in 1995.
FINANCIAL CONDITION
During the six months ended September 30, 1996, the Corporation increased its
assets $137.0 million to $1.89 billion. The majority of this increase was
attributable to increases in loans and securities.
12
<PAGE>
Investment securities (both available for sale and held to maturity)
increased $31.1 million as a result of purchases of $31.3 million of U.S.
Government and agency securities, which was partially offset by market value
and other adjustments of $246,000.
Mortgage-related securities (both available for sale and held to maturity)
increased $38.3 million as a result of (i) exchanges of $54.9 million of
loans held for investment for securities guaranteed by the Federal National
Mortgage Association and backed by such loans and (ii) purchases of $13.0
million. These increases were partially offset by principal repayments and
market value adjustments of $29.6 million. Mortgage-related securities
consisted of $227.3 million mortgage-backed securities and $32.0 million of
mortgage-derivative securities at September 30, 1996.
The Corporation's investments in mortgage-derivative securities are limited
to federal agency issued REMICs which represent an interest in
mortgage-backed securities. These investments are deemed to have limited
credit risk. The investments do have interest rate risk due to, among other
things, actual prepayments being more or less than those predicted at the
time of purchase. The Corporation invests only in short-term tranches in
order to limit the reinvestment risk associated with greater than anticipated
prepayments, as well as changes in value resulting from changes in interest
rates.
Total loans (including loans held for sale) increased $58.8 million during
the six months ended September 30, 1996. Activity for the period included
(i) originations and purchases of $409.2 million, (ii) sales of $130.3
million, which included exchanges of $54.9 million for mortgage-backed
securities, and (iii) principal repayments and other adjustments of $220.1
million.
Deposits increased $51.6 million during the six months ended September 30,
1996. The increase was due to various certificate promotions, an increase in
brokered deposit accounts and a new market yield demand deposit account.
Brokered deposits have been used in the last six months and may be used in
the future as the need for funds requires it. Brokered deposits totalled
$44.7 million at September 30, 1996 and generally mature in one year. FHLB
advances increased $53.3 million. Reverse repurchase agreements and other
borrowings increased $19.3 million during the six months ended September 30,
1996. Advance payments by borrowers for taxes and insurance increased $14.6
million.
Stockholders' equity decreased $7.9 million during the six months ended
September 30, 1996 as a net result of (i) net income of $4.6 million, (ii)
stock options exercised of $190,000, (iii) the increase in net unrealized
losses of available-for-sale securities of $765,000, (iv) treasury stock
repurchased of $11.4 million, (v) cash dividends of $1.1 million and (vi)
management recognition plan shares earned and related tax adjustments
totalling $559,000.
13
<PAGE>
ASSET QUALITY
Loans are placed on non-accrual status when, in the judgment of management,
the probability of collection of interest is deemed to be insufficient to
warrant further accrual. When a loan is placed on non-accrual status,
previously accrued but unpaid interest is deducted from interest income. As
a matter of policy, the Corporation does not accrue interest on loans past
due 90 days or more.
Non-performing assets (consisting of non-accrual loans, certain real estate
held for development and sale, foreclosed properties and repossessed assets)
increased to $13.9 million at September 30, 1996 from $10.3 million at March
31, 1996 and increased as a percentage of total assets to 0.74% from 0.59% at
such dates, respectively. Non-performing assets are summarized as follows at
the dates indicated:
<TABLE>
<CAPTION>
AT MARCH 31,
AT SEPTEMBER 30, ----------------------------
1996 1996 1995 1994
---------------- ---- --- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Non-accrual loans:
Single-family residential $ 2,218 $ 629 $ 833 $ 565
Multi-family residential 333 -- -- 37
Commercial real estate 740 470 624 617
Construction and land -- 81 81 81
Consumer 356 202 219 333
Commercial business 1,023 508 736 831
------- ------- ------- -------
Total non-accrual loans 4,670 1,890 2,493 2,464
Real estate held for development and sale 2,763 2,319 857 2,767
Foreclosed properties and repossessed assets, net 6,494 6,077 7,116 5,294
------- ------- ------- -------
Total non-performing assets $13,927 $10,286 $10,466 $10,525
------- ------- ------- -------
------- ------- ------- -------
Performing troubled debt restructurings $ 331 $ 332 $ 335 $ 4,687
------- ------- ------- -------
------- ------- ------- -------
Total non-accrual loans to total loans 0.31% 0.13% 0.19% 0.22%
Total non-performing assets to total assets 0.74 0.59 0.69 0.76
Allowance for loan losses to total loans 1.51 1.59 1.75 1.98
Allowance for loan losses to total
non-accrual loans 481.37 1,206.72 899.68 897.69
Allowance for loan and foreclosure losses
to total non-performing assets 166.39 228.70 221.82 213.42
</TABLE>
Non-accrual loans increased $2.8 million during the six months ended
September 30, 1996. The increase included two loans, one loan secured by a
single-family property in Lake Geneva, Wisconsin totalling $340,000 and the
other loan secured by a condominium unit in Vero Beach, Florida totalling
$450,000, which reverted back to the Bank as part of a lawsuit with the Bank.
See Item 1 in Part II, Other Information, below. Non-performing real estate
held for development and sale increased $444,000 for the same period due to
increased development costs in ADPC II. Foreclosed properties and
repossessed assets increased $417,000 during the six months ended
September 30, 1996.
14
<PAGE>
At September 30, 1996, there were no non-accrual loans with a carrying value
of greater than $1.0 million.
Foreclosed properties and repossessed assets included two properties with a
carrying value of greater than $1.0 million. The first is a hotel and office
building in Garden Grove, California. The Corporation's share of the net
carrying value of this property amounted to $3.4 million at September 30,
1996.
The second property is an apartment complex in Elm Grove, Wisconsin, which
formerly secured a $2.2 million loan. Phase I studies of the environmental
impact indicated a need for a Phase II study based on the history of the
property, which the Bank is pursuing. The Bank believes any cleanup which
may be necessary will be partially reimbursed by the Petroleum Environmental
Cleanup Fund, although there can be no assurance in this regard. The Bank
also believes that in the event of any remaining environmental cleanup
liability that it will pursue reimbursement from the adjoining land owner,
which is believed to have caused the contamination. As a result, the Bank
does not anticipate incurring any material loss in connection with this
property at this time.
At September 30, 1996, the Bank's assets which have been classified by it
pursuant to Federal regulations consisted of $14.3 million of loans and
foreclosed properties classified as "substandard," net of reserves. As of
March 31, 1996, the substandard assets amounted to $12.6 million. In each
case, these amounts included the above discussed non-performing assets.
The following table sets forth information relating to the Corporation's
loans which are less than 90 days delinquent at the dates indicated.
<TABLE>
<CAPTION>
AT MARCH 31,
AT SEPTEMBER 30, -------------------------
1996 1996 1995 1994
---------------- ---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C> <C>
30 to 59 days $4,259 $5,776 $2,696 $8,258
60 to 89 days 2,206 789 1,099 884
------ ------ ------ ------
Total $6,465 $6,565 $3,795 $9,142
------ ------ ------ ------
------ ------ ------ ------
</TABLE>
The Corporation's loan portfolio, foreclosed properties and repossessed
assets are evaluated on a continuing basis to determine the necessity for
additions to the allowances for losses and the related balance in the
allowances. These evaluations consider several factors including, but not
limited to, general economic conditions, loan portfolio composition, loan
delinquencies, prior loss experience, collateral value, anticipated loss of
interest and management's estimation of future potential losses. The
evaluation of the allowance for loan losses includes a review of known loan
problems as well as potential problems based upon historical trends and
ratios. Foreclosed properties are recorded at the lower of
15
<PAGE>
carrying value or fair value with charge-offs, if any, charged to the
allowance for loan losses prior to transfer to foreclosed property. The fair
value is primarily based on appraisals, discounted cash flow analysis (the
majority of which are based on current occupancy and lease rates) and pending
offers.
A summary of the activity in the allowance for losses on loans follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Allowance at beginning of
period $22,839 $23,212 $22,807 $22,429
Charge-offs:
Mortgage (89) (26) (129) (27)
Consumer (109) (28) (125) (44)
Commercial business (180) (42) (181) (42)
-------- -------- -------- --------
Total charge-offs (378) (96) (435) (113)
Recoveries:
Mortgage 9 106 18 168
Consumer 1 4 3 8
Commercial business 9 17 87 26
-------- -------- -------- --------
Total recoveries 19 127 108 202
-------- -------- -------- --------
Net recoveries
(charge-offs) (359) 31 (327) 89
Provision -- 150 -- 325
Acquired bank allowance -- -- -- 550
-------- -------- -------- --------
Allowance at end of period $ 22,480 $23,393 $ 22,480 $23,393
-------- -------- -------- --------
-------- -------- -------- --------
Net recoveries (charge-offs)
to average loans (0.10)% 0.01% (0.05)% 0.01%
</TABLE>
Although management believes that the September 30, 1996 allowance for loan
losses is adequate based upon the current evaluation of loan delinquencies,
non-accrual loans, charge-off trends, economic conditions and other factors,
there can be no assurance that future adjustments to the allowance, which
could adversely affect the Corporation's results of operations, will not be
necessary. Management also continues to pursue all practical and legal
methods of collection, repossession and disposal, as well as adhering to high
underwriting standards in the origination process, in order to maintain
strong asset quality.
16
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
On an unconsolidated basis, the Corporation's sources of funds include
dividends from its subsidiaries, including the Bank, payments on its loans,
interest on its investments and returns on its real estate held for sale.
The Bank's primary sources of funds are payments on loans and
mortgage-related securities, deposits from retail and wholesale sources,
advances and other borrowings.
At September 30, 1996, the Corporation had outstanding commitments to
originate loans of $42.8 million, commitments to extend funds to, or on
behalf of customers, pursuant to lines and letters of credit of $62.2 million
and loans sold with recourse to the Corporation in the event of default by
the borrower of $3.5 million. Scheduled maturities of certificates of
deposit during the twelve months following September 30, 1996 amounted to
$664.5 million and scheduled maturities of FHLB advances during the same
period totalled $281.5 million. At September 30, 1996, the Corporation also
had $66.6 million of reverse repurchase agreements, all of which are
scheduled to mature during the twelve months following September 30, 1996.
Management believes adequate capital and borrowings are available from
various sources to fund all commitments to the extent required.
The Bank is required by the Office of Thrift Supervision ("OTS") to maintain
specified levels of liquid investments in qualifying types of U.S. Government
and agency securities and other investments. This requirement, which may be
varied by the OTS, is based upon a percentage of deposits and short-term
borrowings. The required percentage is currently 5.0%. During the quarter
ended September 30, 1996, the Bank's average liquidity ratio was 11.92%.
Under federal law and regulation, the Bank is required to meet certain
tangible, core and risk-based capital requirements. Tangible capital
generally consists of stockholders' equity minus certain intangible assets.
Core capital generally consists of tangible capital plus qualifying
intangible assets. The risk-based capital requirements presently address
credit risk related to both recorded and off-balance sheet commitments and
obligations. As a state-chartered savings institution, the Bank is also
subject to the minimum regulatory capital requirements of the State of
Wisconsin.
-17-
<PAGE>
The following summarizes the Bank's capital levels and ratios and
the levels and ratios required by the OTS and the State of Wisconsin at
September 30, 1996:
<TABLE>
<CAPTION>
STATE OF
TANGIBLE CORE RISK-BASED WISCONSIN
CAPITAL CAPITAL CAPITAL CAPITAL
-------- ------- ---------- ---------
<S> <C> <C> <C> <C>
Bank's stockholder's equity $104,129 $104,129 $104,129 $104,129
Adjustment for:
SFAS No.115 capital component 1,542 1,542 1,542 --
Allowable unallocated general
loss allowance -- -- 13,815 21,402
Goodwill and other (2,503) (2,503) (2,759) --
-------- ------- -------- --------
Total regulatory capital 103,168 103,168 116,727 125,531
Required amount 28,212 56,425 87,817 112,907
-------- ------- -------- --------
Excess $74,956 $46,743 $28,910 $12,624
-------- ------- -------- --------
-------- ------- -------- --------
Regulatory capital ratio 5.49% 5.49% 10.63% 6.67%
Required ratio 1.50 3.00 8.00 6.00
-------- ------- -------- --------
Excess 3.99% 2.49% 2.63% 0.67%
-------- ------- -------- --------
-------- ------- -------- --------
</TABLE>
The OTS has proposed to increase the core capital ratio from the current
3.00% to a range of 4.00% to 5.00% for all but the most healthy financial
institutions. The OTS has added an interest rate risk calculation such that
an institution with a measured interest rate risk exposure, as defined,
greater than specified levels must deduct an interest rate risk component
when calculating the OTS risk-based capital. Final implementation of this
rule was pending at September 30, 1996. Management does not believe these
rules will significantly impact the Bank's ability to meet the capital
requirements.
ASSET/LIABILITY MANAGEMENT
The primary function of asset and liability management is to provide
liquidity and maintain an appropriate balance between interest-earning assets
and interest-bearing liabilities within specified maturities and/or repricing
dates. Interest rate risk is the imbalance between interest-earning assets
and interest-bearing liabilities at a given maturity or repricing date, and
is commonly referred to as the interest rate gap (the "gap"). A positive gap
exists when there are more assets than liabilities maturing or repricing
within the same time frame. A negative gap occurs when there are more
liabilities than assets maturing or repricing within the same time frame.
During a period of rising interest rates, a negative gap over a particular
period would tend to adversely affect net interest income over such period,
while a positive gap over a particular period would tend to result in an
increase in net interest income over such period.
-18-
<PAGE>
The Corporation's strategy for asset and liability management is to maintain
an interest rate gap that minimizes the impact of interest rate movements on
the net interest margin. As part of this strategy, the Corporation sells
substantially all new originations of long-term, fixed-rate, single-family
residential mortgage loans in the secondary market, invests in
adjustable-rate or medium-term, fixed-rate, single-family residential
mortgage loans, invests in medium-term mortgage-related securities and
invests in consumer loans which generally have shorter terms to maturity and
higher and/or adjustable interest rates.
The Corporation also originates multi-family residential and commercial real
estate loans, which generally have adjustable or floating interest rates
and/or shorter terms to maturity than conventional single-family residential
loans. Long-term, fixed-rate, single-family residential mortgage loans
originated for sale in the secondary market are generally committed for sale
at the time the interest rate is locked with the borrower. As such, these
loans involve little interest rate risk to the Corporation.
The Corporation's cumulative net gap position at September 30, 1996 for one
year or less was a positive 1.23% of total assets. The calculation of a gap
position requires management to make a number of assumptions as to when an
asset or liability will reprice or mature. Management believes that its
assumptions approximate actual experience and considers them reasonable,
although the actual amortization and repayment of assets and liabilities may
vary substantially.
-19-
<PAGE>
The following table summarizes the Corporation's
interest rate sensitivity gap position as of September 30, 1996.
<TABLE>
<CAPTION>
MORE THAN MORE THAN
WITHIN ONE TO THREE TO MORE THAN
ONE YEAR THREE YEARS FIVE YEARS FIVE YEARS TOTAL
-------- ----------- ---------- ---------- -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Interest-earning assets:
Mortgage loans(1)(2):
Fixed $ 84,194 $ 62,930 $ 20,736 $ 13,604 $ 181,464
Variable 698,304 250,949 8,457 -- 957,710
Consumer loans (1) 192,109 70,167 24,796 -- 287,072
Commercial business loans (1) 21,691 3,766 -- -- 25,457
Mortgage-related securities (3) 118,761 96,977 28,378 15,199 259,315
Investment securities and other
interest-earning assets (3) 70,026 8,438 19,255 -- 97,719
---------- -------- ------ -------- ----------
Total $1,185,085 $493,227 $101,622 $28,803 $1,808,737
---------- -------- ------ -------- ----------
---------- -------- ------ -------- ----------
Interest-bearing liabilities:
Deposits (4) $ 810,407 $289,730 $ 67,708 $39,761 $1,207,606
Borrowings 351,384 90,616 49 -- 442,049
---------- -------- ------ -------- ----------
Total $1,161,791 $380,346 $67,757 $39,761 $1,649,655
---------- -------- ------ -------- ----------
---------- -------- ------ -------- ----------
Interest sensitivity gap $ 23,294 $112,881 $33,865 $(10,958) $159,082
---------- -------- -------- -------- ----------
---------- -------- -------- -------- ----------
Cumulative interest sensitivity gap $ 23,294 $136,175 $170,040 $159,082
---------- -------- -------- --------
---------- -------- -------- --------
Cumulative interest sensitivity gap
as a percent of total assets 1.23% 7.20% 8 .99% 8.41%
---------- -------- -------- --------
---------- -------- -------- --------
</TABLE>
- ----------------
(1) Balances have been reduced for (i) undisbursed loan proceeds, which
aggregated $35.8 million, and (ii) non-accrual loans, which amounted to
$4.7 million.
(2) Includes $5.4 million of loans held for sale spread throughout the
periods.
(3) Includes $153.2 million of securities available for sale spread
throughout the periods.
(4) Does not include $77.3 million of demand accounts because they are
non-interest-bearing. Also does not include accrued interest payable,
which amounted to $7.6 million. Projected decay rates for demand
deposits and passbook savings were provided by the OTS.
-20-
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS.
The Bank is involved in litigation relating to alleged structural
deficiencies of a property located in Vero Beach, Florida. The
Bank contracted for the completion of this property after it was
acquired by foreclosure and converted it into a condominium
complex. In January, 1993, the Bank and the Homeowners
Association which represents the condominium owners entered into a
settlement agreement which covers various repairs totalling
$500,000 which the Corporation accrued in September, 1992 and paid
in January 1993, as well as repairs which are related to the
post-tension cable system, an estimated amount of which was
accrued by the Corporation in September, 1993 but has not yet been
paid. Three lawsuits have been filed against the Bank in
connection with the foregoing by various owners of condominiums in
the complex and the Homeowners Association. During fiscal 1996,
one trial involving an individual homeowner was finished, of which
the result relieved the Bank of any claim for punitive and/or
general damages, but provided the owner with recision (return of
the unit to the Bank). The Bank is currently considering the
alternatives of appeal and/or negotiated settlement. Based on the
outcome of the above described case and the evaluation of the
accruals by the Corporation to date, management does not believe
that the remaining litigation will have a material adverse effect
on the financial condition or operations of the Corporation.
ITEM 2 CHANGES IN SECURITIES.
Not applicable
ITEM 3 DEFAULTS UPON SENIOR SECURITIES.
Not applicable
ITEM 4 SUBMISSION OF MATTERS TO VOTE OF SECURITIES HOLDERS.
Not applicable
-21-
<PAGE>
ITEM 5 OTHER INFORMATION.
Not applicable
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
None
(b) Reports of Form 8-K:
None
-22-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ANCHOR BANCORP WISCONSIN INC.
Date: October 31, 1996 By: /s/ Douglas J. Timmerman
---------------- --------------------------------------------
Douglas J. Timmerman, Chairman of the
Board, President and Chief Executive Officer
Date: October 31, 1996 By: /s/ Michael W. Helser
---------------- --------------------------------------------
Michael W. Helser, Treasurer and
Chief Financial Officer
-23-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 32,691
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 14,912
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 153,247
<INVESTMENTS-CARRYING> 169,994
<INVESTMENTS-MARKET> 166,301
<LOANS> 1,490,267
<ALLOWANCE> 22,480
<TOTAL-ASSETS> 1,891,584
<DEPOSITS> 1,292,509
<SHORT-TERM> 351,384
<LIABILITIES-OTHER> 46,504
<LONG-TERM> 90,665
0
0
<COMMON> 51,034
<OTHER-SE> 59,488
<TOTAL-LIABILITIES-AND-EQUITY> 1,891,584
<INTEREST-LOAN> 59,340
<INTEREST-INVEST> 9,672
<INTEREST-OTHER> 316
<INTEREST-TOTAL> 69,328
<INTEREST-DEPOSIT> 29,458
<INTEREST-EXPENSE> 41,754
<INTEREST-INCOME-NET> 27,574
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 30,038
<INCOME-PRETAX> 6,819
<INCOME-PRE-EXTRAORDINARY> 6,819
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,605
<EPS-PRIMARY> 93
<EPS-DILUTED> 93
<YIELD-ACTUAL> 7.92
<LOANS-NON> 4,670
<LOANS-PAST> 0
<LOANS-TROUBLED> 331
<LOANS-PROBLEM> 14,347
<ALLOWANCE-OPEN> 22,807
<CHARGE-OFFS> 435
<RECOVERIES> 108
<ALLOWANCE-CLOSE> 22,480
<ALLOWANCE-DOMESTIC> 22,480
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 21,401
</TABLE>
