<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 December 31, 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 January 31, 1997: 4,623,712
<PAGE>
ANCHOR BANCORP WISCONSIN INC.
INDEX - FORM 10-Q
Part I - Financial Information Page #
------
Item 1 Financial Statements (Unaudited)
Consolidated Balance Sheets as of December 31, 1996
and March 31, 1996 2
Consolidated Statements of Income for the Three and
Nine Months Ended December 31, 1996 and 1995 3
Consolidated Statements of Cash Flows for the Nine
Months Ended December 31, 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 13
Liquidity & Capital Resources 16
Asset/Liability Management 18
Part II - Other Information
Item 1 Legal Proceedings 20
Item 2 Changes in Securities 20
Item 3 Defaults Upon Senior Securities 20
Item 4 Submission of Matters to Vote of Security Holders 20
Item 5 Other Information 20
Item 6 Exhibits and Reports on Form 8-K 21
Signatures 22
1
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ANCHOR BANCORP WISCONSIN INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31, March 31,
1996 1996
---- ----
(In Thousands)
ASSETS
Cash $ 37,729 $ 35,454
Federal funds sold 23,032 7,525
Interest-bearing deposits - 710
---------- ----------
Cash and cash equivalents 60,761 43,689
Securities available for sale:
Investment securities 30,023 30,241
Mortgage-related securities 88,064 110,268
Securities held to maturity:
Investment securities (fair value of $7.0 million
and $2.6 million, respectively 6,952 2,596
Mortgage-related securities (fair value
of $160.7 million and $109.9 million, respectively) 161,868 110,730
Loans receivable:
Held for sale 9,112 13,968
Held for investment 1,424,730 1,361,080
Foreclosed properties and repossessed assets 6,486 6,077
Real estate held for development and sale 13,647 13,640
Office properties and equipment 18,789 18,906
Federal Home Loan Bank stock--at cost 18,981 16,019
Accrued interest on investments and loans 12,891 11,549
Prepaid expenses and other assets 16,907 15,793
----------- ----------
Total assets $ 1,869,211 $1,754,556
----------- ----------
----------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 1,305,714 $1,240,958
Advance payments by borrowers for taxes and insurance 1,466 7,938
Notes payable to Federal Home Loan Bank 371,165 316,869
Reverse repurchase agreements 51,304 47,582
Other loans payable 8,302 7,031
Other liabilities 16,022 15,776
----------- ----------
Total liabilities 1,753,973 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 50,413 50,086
Retained earnings 106,862 100,191
Less: Treasury stock (1,628,700 shares
and 1,315,312 shares, respectively) (40,179) (29,298)
Deferred compensation due employees (928) (928)
Common stock purchased by recognition plans (1,301) (1,546)
Unrealized losses on securities available
for sale, net of tax (254) (728)
------------ ---------
Total stockholders' equity 115,238 118,402
----------- -----------
Total liabilities and stockholders' equity $ 1,869,211 $1,754,556
----------- ----------
----------- ----------
See accompanying Notes to Unaudited Consolidated Financial Statements.
2
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ANCHOR BANCORP WISCONSIN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
December 31, December 31,
------------------- -----------------
1996 1995 1996 1995
---- ---- ---- ----
(In Thousands, Except Per Share Data)
Interest income:
Loans $ 30,140 $ 27,296 $ 89,481 $ 79,254
Mortgage-related securities 4,082 3,786 11,682 10,514
Investment securities 1,269 1,109 3,341 2,831
Interest-bearing deposits 328 153 644 323
---------- ---------- ---------- ----------
Total interest income 35,819 32,344 105,148 92,922
Interest expense:
Deposits 15,662 14,674 45,120 40,824
Notes payable and other borrowings 6,154 4,724 18,161 13,920
Other 189 157 479 438
---------- ---------- ---------- ----------
Total interest expense 22,005 19,555 63,760 55,182
---------- ---------- ---------- ----------
Net interest income 13,814 12,789 41,388 37,740
Provision for loan losses - 150 - 475
---------- ---------- ---------- ----------
Net interest income after
provision for loan losses 13,814 12,639 41,388 37,265
Non-interest income:
Loan servicing income 763 696 2,220 2,033
Service charges on deposits 949 836 2,770 2,332
Insurance commissions 329 197 1,066 628
Gain on sale of loans 447 223 856 624
Other 2,330 391 7,189 1,029
---------- ---------- ---------- ----------
Total non-interest income 4,818 2,343 14,101 6,646
Non-interest expenses:
Compensation 5,335 4,864 16,060 14,095
Occupancy 736 728 2,210 2,068
Federal insurance premiums 571 684 1,990 1,967
Federal insurance special assessment - - 7,663 -
Furniture and equipment 749 667 2,174 1,829
Data processing 551 560 1,578 1,562
Marketing 528 424 1,579 1,301
Cost of operations of foreclosure
properties 360 60 566 45
Other 2,480 1,502 7,528 4,402
---------- ---------- ---------- ----------
Total non-interest expenses 11,310 9,489 41,348 27,269
---------- ---------- ---------- ----------
Income before income taxes 7,322 5,493 14,141 16,642
Income taxes 2,660 1,947 4,874 5,896
---------- ---------- ---------- ----------
Net income $ 4,662 $ 3,546 $ 9,267 $ 10,746
---------- ---------- ---------- ----------
Earnings per share:
Primary $ 0.97 $ 0.65 $ 1.88 $ 2.00
Fully diluted 0.97 0.65 1.88 1.98
See accompanying Notes to Unaudited Consolidated Financial Statements.
3
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ANCHOR BANCORP WISCONSIN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
December 31,
------------
1996 1995
---- ----
(In Thousands)
OPERATING ACTIVITIES
Net income $ 9,267 $ 10,746
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for losses on loans and real estate - 675
Provision for depreciation and amortization 1,560 1,389
Loans originated for sale (84,237) (140,971)
Proceeds from sales of loans held for sale 136,398 142,438
Net gain on sales of loans and securities (872) (205)
Increase in accrued interest receivables (1,342) (2,132)
Increase in accrued interest payable 3,307 1,300
Increase (decrease) in accounts payable (3,152) 1,895
Other (1,399) (558)
--------- ------------
Net cash provided by operating activities 59,530 14,577
INVESTING ACTIVITIES
Proceeds from sales of investment securities
available for sale 33,008 34,075
Purchase of investment securities available for sale (42,407) (47,137)
Purchase of investment securities held to maturity (4,453) (2,500)
Proceeds from maturities of investment securities 10,099 5,525
Proceeds from sales of mortgage-related securities
available for sale 5,617 -
Purchase of mortgage-related securities available
for sale (2,057) (596)
Purchase of mortgage-related securities held to
maturity (20,940) (3,725)
Principal collected on mortgage-related securities 43,937 32,144
Net increase in loans receivable (166,145) (88,551)
Purchase of office properties and equipment (1,688) (2,099)
Sales of office properties and equipment 277 86
Sales of real estate 11,876 2,553
Purchase of real estate held for sale (11,151) (2,922)
Increase in capitalized expense on real estate (67) (654)
----------- ------------
Net cash used by investing activities 144,094 (73,801)
4
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ANCHOR BANCORP WISCONSIN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
December 31,
------------
1996 1995
---- ----
(In Thousands)
FINANCING ACTIVITIES
Increase in deposit accounts $ 62,295 $ 67,152
Decrease in advance payments by borrowers
for taxes and insurance (6,472) (6,765)
Proceeds of notes payable to Federal Home Loan Bank 430,196 297,600
Repayment of notes payable to Federal Home Loan Bank (375,900) (320,600)
Increase in securities sold under agreements to
repurchase 3,722 51,962
Increase) in other loans payable 1,271 -
Treasury stock purchased (12,105) (12,928)
Sale of treasury stock for American purchase - 3,486
Reissuance of treasury stock for options 297 269
Payments of cash dividends to stockholders (1,668) (1,250)
----------- ----------
Net cash provided by financing activities 101,636 78,926
----------- ----------
Increase in cash and cash equivalents 17,072 19,702
Cash and cash equivalents at beginning of period 43,689 28,865
----------- ----------
Cash and cash equivalents at end of period $ 60,761 $ 48,567
----------- ----------
----------- ----------
Supplementary cash flow information:
Cash paid or credited to accounts:
Interest on deposits and borrowings $ 60,453 $ 53,882
Income taxes 5,462 6,399
Non-cash transactions:
Mortgage loans transferred to loans held for sale - 2,573
Loans transferred to foreclosed properties 1,108 1,310
Mortgages loans held for investment converted into
mortgage-backed securities held to maturity 54,938 96,772
Securities available for sale market value adjustment 790 2,084
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
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 with 50% ownership or more 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 GAAP,
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 nine month periods ended December 31, 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 November 15, 1996, 541 shares of the management recognition plan were earned
by the recipients. During the quarter ended December 31, 1996, 13,388 shares of
stock options were exercised at a weighted price of $8.00 per share. Treasury
shares were issued in exchange for the options using the last-in-first-out
method. The excess of the cost of treasury shares over the option price
($355,000) was charged to retained earnings. During the quarter ended December
31, 1996, the Corporation repurchased 21,000 shares of common stock on the open
market for an
6
<PAGE>
average price of $34.58. On November 15, 1996, the Corporation paid out a cash
dividend of $.125 per share, amounting to $578,429.
NOTE 4 - EARNINGS PER SHARE
Earnings per share for the three and nine months ended December 31, 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.
Three Months Ended December 31,
-----------------------------------------------------
1996 1995
-------------------------- --------------------------
Primary Fully Diluted Primary Fully Diluted
------- ------------- ------- --------------
Net income $4,661,526 $4,661,526 $3,546,125 $3,546,125
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average common
shares outstanding 4,583,909 4,583,909 5,186,390 5,186,390
Common stock equivalents
based on the treasury
stock method 224,356 230,383 252,902 256,672
---------- --------- ----------- ----------
Total weighted average
common shares and
equivalents outstanding 4,808,265 4,814,292 5,439,292 5,443,062
---------- --------- ----------- -----------
---------- --------- ----------- -----------
Earnings per share $ 0.97 $ 0.97 $ 0.65 $ 0.65
---------- --------- ----------- -----------
---------- --------- ----------- -----------
Nine Months Ended December 31,
-------------------------------------------------------
1996 1995
---------------------------- -------------------------
Primary Fully Diluted Primary Fully Diluted
------- ------------- ------- -------------
Net income $ 9,266,800 $ 9,266,800 $10,746,074 $10,746,074
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------
Weighted average common
shares outstanding 4,688,560 4,688,560 5,155,508 5,155,508
Common stock equivalents
based on the treasury
stock method 228,665 244,673 218,439 263,694
------------ ------------ ----------- ------------
Total weighted average
common shares and
equivalents outstanding 4,917,225 4,933,233 5,373,947 5,419,202
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
Earnings per share $ 1.88 $ 1.88 $ 2.00 $ 1.98
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
7
<PAGE>
NOTE 5 - SUBSEQUENT EVENTS
On January 17, 1997, the Corporation announced that its Board of Directors
declared an $.125 per share cash dividend to be paid on February 14, 1997 to
stockholders of record on January 31, 1997.
8
<PAGE>
ANCHOR BANCORP WISCONSIN INC.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
General. Net income for the three months ended December 31, 1996 increased to
$4.7 million as compared to $3.5 million for the same period in the prior year.
Net income for the nine months ended December 31, 1996 decreased to $9.3 million
as compared to $10.7 million for the same period in the prior year. Exclusive
of the after-tax effects of a $7.7 million one-time charge to recapitalize the
Savings Association Insurance Fund ("SAIF"), net income for the nine months
ended December 31, 1996 increased to $13.9 million as compared to $10.7 million
for the same period in the prior year. The increase in net income for the three
month period compared to last year was due to (i) an increase in net interest
income of $1.0 million and (ii) an increase in non-interest income of $2.5
million, which were partially offset by an increase in non-interest expenses of
$1.8 million and an increase in income taxes of $700,000. The decrease in net
income for the nine month period compared to last year was due to an increase in
non-interest expenses of $14.1 million, $7.7 million of which was attributable
to the one-time charge to recapitalize SAIF, which was partially offset by (i)
an increase in net interest income of $3.6 million, (ii) an increase in
non-interest income of $7.5 million and (iii) a decrease in income taxes of $1.0
million.
Net Interest Income. Net interest income increased $1.0 million and $3.6
million, respectively, for the three and nine months ended December 31, 1996
compared to the same respective periods in 1995. The net interest margin
decreased to 3.02% from 3.12% and to 3.11% from 3.19%, respectively, for the
three and nine month periods. The interest rate spread decreased to 2.82% from
2.84% and to 2.90% from 2.91%, respectively, for the three and nine month
periods.
Interest income on loans increased $2.8 million and $10.2 million, respectively,
for the three and nine month periods ended December 31, 1996 as compared to the
same periods in the prior year. These increases were primarily a result of the
increase of $143.2 million and $151.1 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 $296,000 and
$1.2 million, respectively, for the same periods due to the increase of $17.8
million and $24.4 million, respectively, in the average balance of
mortgage-related securities.
Interest expense on deposits increased $988,000 and $4.3 million, respectively,
for the three and nine month periods ended December 31, 1996 as compared to the
same periods in 1995. The increases were due primarily to the increase in the
average balance of deposits of $94.7 million and $109.5 million, respectively,
as a result of various demand deposit and certificate promotions. In addition,
the average rate on deposits increased from 4.83% and 4.69%, respectively, to
4.79% and 4.73%, respectively, during the three and nine months ended December
31, 1995 and 1996, respectively, primarily as a result of the above-described
deposit promotions. Interest expense on notes payable and other borrowings
increased $1.4 million and $4.2 million, respectively, during the same periods.
This was a result of an increase of $107.5 million and $102.4 million,
respectively, in the average balance of borrowings during the same periods.
9
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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 December 31,
---------------------------------------------------------
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 $1,139,091 $22,565 7.92% $1,045,495 $20,814 7.96%
Consumer loans 297,023 6,792 9.15 247,343 5,783 9.35
Commercial business loans 26,011 783 12.04 26,113 699 10.71
---------- ------- ---------- -------
Total loans receivable 1,462,125 30,140 8.25 1,318,951 27,296 8.28
Mortgage-related
securities 253,592 4,082 6.44 235,803 3,786 6.42
Investment securities 67,756 935 5.52 53,929 798 5.92
Interest-bearing deposits 24,454 328 5.37 10,985 153 5.57
Federal Home Loan Bank
stock 18,978 334 7.04 17,599 311 7.07
---------- ------- ---------- -------
Total interest-earning
assets 1,826,905 35,819 7.84 1,637,267 32,344 7.90
Non-interest-earning
assets 65,208 56,866
---------- ----------
Total assets $1,892,113 $1,694,133
---------- ----------
---------- ----------
INTEREST-BEARING LIABILITIES
Demand deposits $ 291,608 1,879 2.58 $ 237,342 1,338 2.25
Regular passbook savings 101,146 585 2.31 108,980 640 2.35
Certificates of deposit 916,282 13,198 5.76 867,986 12,696 5.85
---------- ------ ---------- -------
Total deposits 1,309,036 15,662 4.79 1,214,308 14,674 4.83
Notes payable and other
borrowings 422,658 6,154 5.82 315,206 4,724 5.99
Other 20,201 189 3.74 16,736 157 3.75
---------- ------- ---------- -------
Total interest-bearing
liabilities 1,751,895 22,005 5.02 1,546,250 19,555 5.06
------- ---- ------- ----
Non-interest-bearing
liabilities 23,998 25,849
---------- ----------
Total liabilities 1,775,893 1,572,099
Stockholders' equity 116,220 122,034
---------- ----------
Total liabilities and
stockholders'
equity $1,892,113 $1,694,133
---------- ----------
---------- ----------
Net interest income/interest
rate spread $ 13,814 2.82% $ 12,789 2.84%
--------- ---- --------- -----
--------- ---- --------- -----
Net interest-earning
assets $ 75,010 $ 91,017
--------- ---------
--------- ---------
Net interest margin 3.02% 3.12%
---- -----
---- -----
Ratio of average
interest-earning assets
to average interest-bearing
liabilities 1.04 1.06
---- ----
---- ----
</TABLE>
___________
(1) Annualized
10
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended December 31,
------------------------------------------------------------------------------
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 $ 1,137,674 $ 67,512 7.91% $ 1,038,118 $ 61,359 7.88%
Consumer loans 277,073 19,773 9.52 229,821 15,987 9.28
Commercial business loans 27,684 2,196 10.58 23,419 1,908 10.86
------------ --------- ----------- ---------
Total loans receivable 1,442,431 89,481 8.27 1,291,358 79,254 8.18
Mortgage-related securities 243,146 11,682 6.41 218,788 10,514 6.41
Investment securities 56,718 2,409 5.66 43,183 1,958 6.05
Interest-bearing deposits 15,599 644 5.50 7,416 323 5.81
Federal Home Loan Bank stock 18,103 932 6.86 17,147 873 6.79
------------ --------- ----------- ---------
Total interest-earning assets 1,775,997 105,148 7.89 1,577,892 92,922 7.85
Non-interest-earning assets 64,117 52,335
------------ -----------
Total assets $ 1,840,114 $ 1,630,227
------------ -------------
------------ -------------
INTEREST-BEARING LIABILITIES
Demand deposits $ 287,229 5,566 2.58 $ 208,230 2,975 1.90
Regular passbook savings 103,832 1,793 2.30 109,100 1,902 2.32
Certificates of deposit 880,196 37,761 5.72 844,444 35,947 5.68
------------- --------- ------------- --------
Total deposits 1,271,257 45,120 4.73 1,161,774 40,824 4.69
Notes payable and other
borrowings 414,201 18,161 5.85 311,788 13,920 5.95
Other 17,192 479 3.71 15,819 438 3.69
------------- --------- ------------- --------
Total interest-bearing
liabilities 1,702,650 63,760 4.99 1,489,381 55,182 4.94
--------- ---- -------- ----
Non-interest-bearing liabilities 20,016 21,026
------------- -------------
Total liabilities 1,722,666 1,510,407
Stockholders' equity 117,448 119,820
------------- -------------
Total liabilities and
stockholders' equity $ 1,840,114 $ 1,630,227
------------- -------------
------------- -------------
Net interest income/interest
rate spread $ 41,388 2.90% $ 37,740 2.91%
--------- ----- --------- -----
--------- ----- --------- -----
Net interest-earning assets $ 73,347 $ 88,511
------------ -------------
------------ -------------
Net interest margin 3.11% 3.19%
----- -----
----- -----
Ratio of average
interest-earning assets
to average interest-bearing
liabilities 1.04 1.06
---- ----
---- ----
</TABLE>
____________
(1) Annualized
Provision for Loan Losses. Provision for loan losses decreased $150,000 and
$475,000, respectively, during the three and nine months ended December 31, 1996
as compared to the same periods in 1995. See "Asset Quality" for further
discussion.
Non-Interest Income. Non-interest income increased $2.5 million and $7.4
million, respectively, during the three and nine months ended December 31, 1996
as compared to the same periods in the prior year. These increases were
primarily as a result of increased partnership income from
11
<PAGE>
partnerships in which the Corporation and IDI have invested totaling $1.9
million and $6.2 million, respectively. IDI has invested in various limited
real estate partnerships, primarily located in Texas, North Carolina and
Florida. IDI provided $1.9 million and $5.6 million, respectively, of the
above discussed increased partnership income during the three and nine months
ended December 31, 1996.
Non-Interest Expense. Non-interest expense increased $1.8 million and $14.1
million, respectively, during the three and nine month periods ended December
31, 1996 as compared to the same periods in 1995 as a result of several
factors. The majority of the nine month increase was due to the one-time
charge during the quarter ended September 30, 1996 of $7.7 million associated
with the recapitalization of the SAIF. (Exclusive of this one-time charge,
non-interest expenses increased by $6.4 million during the nine month period
ended December 31, 1996, as compared to the same period in 1995.)
Compensation expense increased $471,000 and $2.0 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 $90,000 and $487,000,
respectively, primarily due to increased depreciation and other costs from
additional offices. Other expenses increased $978,000 and $3.1 million,
respectively, during the periods due to increases in the minority interest in
net income of consolidated partnerships as well as other partnership
consolidated expenses ($900,000 and $2.7 million, respectively, during the
three and nine months ended December 31, 1996).
Income Taxes. Income tax expense increased $713,000 and decreased $1.0
million, respectively, during the three and nine months ended December 31,
1996 as compared to the same periods in 1995. The decrease was 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
36.33% and 34.47% as compared to 35.45% and 35.43%, respectively, for the
same periods. Exclusive of the one-time charge to recapitalize the SAIF and
related tax effect, the effective tax rate was 36.46% for the nine months
ended December 31, 1996.
FINANCIAL CONDITION
During the nine months ended December 31, 1996, the Corporation increased its
assets $114.7 million to $1.87 billion. The majority of this increase was
attributable to increases in loans and securities.
Investment securities (both available for sale and held to maturity) increased
$4.1 million as a result of (i) purchases of $46.9 million of U.S. Government
and agency securities and (ii) market value and other adjustments of $369,000,
which were partially offset by sales and maturities of $43.1 million.
Mortgage-related securities (both available for sale and held to maturity)
increased $28.9 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 $23.0
million. These increases were partially offset by sales of $5.6 million and
principal repayments and market value adjustments of $43.4 million.
Mortgage-related securities consisted
12
<PAGE>
of $215.0 million mortgage-backed securities and $35.0 million of
mortgage-derivative securities at December 31, 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 nine months ended December 31, 1996. Activity for the period included
(i) originations and purchases of $575.4 million, (ii) sales of $191.3
million, which included exchanges of $54.9 million for mortgage-backed
securities, and (iii) principal repayments and other adjustments of $325.3
million.
Deposits increased $64.8 million during the nine months ended December 31,
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 nine months and may be used in
the future as the need for funds requires it. Brokered deposits totalled
$53.2 million at December 31, 1996 and generally mature in one year. FHLB
advances increased $54.3 million during the nine months ended December 31,
1996. Reverse repurchase agreements and other borrowings increased $5.0
million during the nine months ended December 31, 1996. Advance payments by
borrowers for taxes and insurance decreased $6.5 million as a result of
annual payouts for taxes.
Stockholders' equity decreased $3.2 million during the nine months ended
December 31, 1996 as a net result of (i) net income of $9.3 million,
(ii) stock options exercised of $297,000, (iii) the decrease in net
unrealized losses of available-for-sale securities of $474,000, (iv) treasury
stock repurchased of $12.1 million, (v) cash dividends of $1.7 million and
(vi) management recognition plan shares earned and related tax adjustments
totalling $572,000.
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 $14.6 million at December 31, 1996 from $10.3 million at March
31, 1996 and increased as a percentage of total assets to 0.78% from 0.59% at
such dates, respectively.
13
<PAGE>
Non-performing assets are summarized as follows at the dates indicated:
At March 31,
At December 31, ---------------------
1996 1996 1995 1994
--------------- ---- ---- ----
(Dollars In Thousands)
Non-accrual loans:
Single-family residential $ 1,809 $ 629 $ 833 $ 565
Multi-family residential 980 - - 37
Commercial real estate 685 470 624 617
Construction and land 808 81 81 81
Consumer 304 202 219 333
Commercial business 143 508 736 831
--------- ------ ------ ------
Total non-accrual loans 4,729 1,890 2,493 2,464
Real estate held for development and sale 3,391 2,319 857 2,767
Foreclosed properties and repossessed
assets, net 6,486 6,077 7,116 5,294
--------- ------ ------ ------
Total non-performing assets $ 14,606 $10,286 $10,466 $10,525
--------- ------- ------- -------
--------- ------- ------- -------
Performing troubled debt restructurings $ 330 $ 332 $ 335 $ 4,687
--------- ------ ------ -------
--------- ------ ------ -------
Total non-accrual loans to total loans 0.32% 0.13% 0.19% 0.22%
Total non-performing assets to total assets 0.78 0.59 0.69 0.76
Allowance for loan losses to total loans 1.52 1.59 1.75 1.98
Allowance for loan losses to total
non-accrual loans 477.84 1206.72 899.68 897.69
Allowance for loan and foreclosure losses
to total non-performing assets 158.96 228.70 221.82 213.42
Non-accrual loans increased $2.8 million during the nine months ended December
31, 1996. The increase was primarily attributable to a loan secured by a
single-family property in Lake Geneva, Wisconsin totalling $340,000 and a 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. Also, two loans (one multi-family and one
construction) to one entity totalling $1.3 million were classified as
non-accrual during the quarter ended December 31, 1996. They are further
discussed below. Non-performing real estate held for development and sale
increased $1.1 million for the nine months ended December 31, 1996 due to
increased development costs in ADPC II. Foreclosed properties and repossessed
assets increased $409,000 during the same period.
At December 31, 1996, there were two non-accrual loans to the same entity which
had a total carrying value of greater than $1.0 million. One loan totalling
$482,000 was secured by a multi-family property in Madison, Wisconsin. The
other loan totalled $809,000 and was secured by land for the future construction
of a multi-family residence. These loans were transferred into ADPC during the
foreclosure process and may be further developed.
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 December 31, 1996.
The property is being handled under bankruptcy.
14
<PAGE>
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 December 31, 1996, the Bank's assets which have been classified by it
pursuant to Federal regulations consisted of $14.2 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.
At December 31, At March 31,
-----------------------------
1996 1996 1995 1994
--------------- ---- ---- ----
(In Thousands)
30 to 59 days $ 10,243 $ 5,776 $ 2,696 $ 8,258
60 to 89 days 684 789 1,099 884
---------- -------- -------- --------
Total $ 10,927 $ 6,565 $ 3,795 $ 9,142
--------- -------- -------- --------
--------- -------- -------- --------
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 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.
15
<PAGE>
A summary of the activity in the allowance for losses on loans follows:
Three Months Ended Nine Months Ended
December 31, December 31,
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
(Dollars In Thousands)
Allowance at beginning of period $ 22,480 $ 23,393 $ 22,807 $ 22,429
Charge-offs:
Mortgage (17) (68) (146) (95)
Consumer (146) (33) (271) (77)
Commercial business (4) (4) (185) (46)
---------- ---------- --------- ----------
Total charge-offs (167) (105) (602) (218)
Recoveries:
Mortgage 229 49 247 217
Consumer 1 1 4 9
Commercial business 55 8 142 34
---------- ---------- --------- ---------
Total recoveries 285 58 393 260
---------- ---------- --------- ---------
Net recoveries (charge-offs) 118 (47) (209) 42
Provision - 150 - 475
Acquired bank allowance - - - 550
---------- ---------- --------- ---------
Allowance at end of period $ 22,598 $ 23,496 $ 22,598 $ 23,496
--------- --------- --------- ---------
--------- --------- --------- ---------
Net recoveries (charge-offs)
to average loans 0.03% (0.01)% (0.02)% 0.00%
---- ----- ----- ----
---- ----- ----- ----
Although management believes that the December 31, 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.
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.
16
<PAGE>
At December 31, 1996, the Corporation had outstanding commitments to
originate loans of $49.2 million, commitments to extend funds to, or on
behalf of customers, pursuant to lines and letters of credit of $65.6 million
and loans sold with recourse to the Corporation in the event of default by
the borrower of $2.2 million. Scheduled maturities of certificates of
deposit during the twelve months following December 31, 1996 amounted to
$717.0 million and scheduled maturities of FHLB advances during the same
period totalled $259.6 million. At December 31, 1996, the Corporation also
had $51.3 million of reverse repurchase agreements, all of which are
scheduled to mature during the twelve months following December 31, 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 December 31, 1996, the Bank's average liquidity ratio was 12.65%.
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. 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
December 31, 1996:
State of
Tangible Core Risk-based Wisconsin
Capital Capital Capital Capital
-------- ------- ----------- --------
(Dollars In Thousands)
Bank's stockholder's equity $ 108,460 $ 108,460 $ 108,460 $ 108,460
Adjustment for:
SFAS No.115 capital component 361 361 361 -
Allowable unallocated general
loss allowance - - 13,856 21,582
Goodwill and other (2,416) (2,416) (2,498) -
--------- --------- --------- ---------
Total regulatory capital 106,405 106,405 120,179 130,042
Required amount 27,830 55,660 88,069 111,443
--------- --------- --------- ---------
Excess $ 78,575 $ 50,745 $ 32,110 $ 18,599
---------- ---------- ---------- ---------
---------- ---------- ---------- ---------
Regulatory capital ratio 5.74% 5.74% 10.92% 7.00%
Required ratio 1.50 3.00 8.00 6.00
---- ---- ----- ----
Excess 4.24% 2.74% 2.92% 1.00%
---- ---- ----- ----
---- ---- ----- ----
17
<PAGE>
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 December 31, 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.
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 December 31, 1996 for one
year or less was a negative 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.
18
<PAGE>
The following table summarizes the Corporation's interest rate sensitivity gap
position as of December 31, 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> <C> <C>
Interest-earning assets:
Mortgage loans (1) (2):
Fixed $ 79,521 $ 58,942 $ 24,996 $ 26,236 $ 189,695
Variable 705,910 217,369 8,134 - 931,413
Consumer loans (1) 203,875 75,502 24,796 - 304,173
Commercial business loans (1) 23,288 2,454 685 - 26,427
Mortgage-related securities (3) 113,771 94,101 27,752 14,308 249,932
Investment securities and
other interest-earning assets (3) 33,307 8,439 37,242 - 78,988
---------- --------- --------- --------- ----------
Total $1,159,672 $ 456,807 $ 123,605 $ 40,544 $1,780,628
---------- --------- --------- --------- ----------
---------- --------- --------- --------- ----------
Interest-bearing liabilities:
Deposits (4) $ 865,569 $ 259,898 $ 66,895 $ 40,018 $1,232,380
Borrowings 317,173 112,742 845 - 430,760
---------- --------- --------- --------- ----------
Total $1,182,742 $ 372,640 $ 67,740 $ 40,018 $1,663,140
---------- --------- --------- --------- ----------
---------- --------- --------- --------- ----------
Interest sensitivity gap $ (23,070) $ 84,167 $ 55,865 $ 526 $ 117,488
---------- --------- --------- --------- ----------
---------- --------- --------- --------- ----------
Cummulative interest
sensitivity gap $ (23,070) $ 61,097 $ 116,962 $ 117,488
---------- --------- --------- ---------
---------- --------- --------- ---------
Cummulative interest
sensitivity gap
as a percent of total assets (1.23)% 3.27% 6.26% 6.29%
---------- --------- --------- ---------
---------- --------- --------- ---------
</TABLE>
(1) Balances have been reduced for (i) undisbursed loan proceeds, which
aggregated $33.7 million, and (ii) non-accrual loans, which amounted
to $4.7 million.
(2) Includes $9.1 million of loans held for sale spread throughout the periods.
(3) Includes $118.1 million of securities available for sale spread throughout
the periods.
(4) Does not include $64.8 million of demand accounts because they are
non-interest-bearing. Also does not include accrued interest payable,
which amounted to $8.5 million. Projected decay rates for demand
deposits and passbook savings were provided by the OTS.
19
<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 recission (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 pending
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
Item 5 Other Information.
Not applicable
20
<PAGE>
Item 6 Exhibits and Reports on Form 8-K.
(a) Exhibits:
None
(b) Reports of Form 8-K:
None
21
<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: January 31, 1997 By: /s/ DOUGLAS J. TIMMERMAN
------------------------
Douglas J. Timmerman,
Chairman of the Board,
President and Chief
Executive Officer
Date: January 31, 1997 By: /s/ MICHAEL W. HELSER
----------------------------
Michael W. Helser, Treasurer
and Chief Financial Officer
22
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> DEC-30-1996
<EXCHANGE-RATE> 1
<CASH> 37,729
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 23,032
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 118,087
<INVESTMENTS-CARRYING> 168,820
<INVESTMENTS-MARKET> 167,698
<LOANS> 1,484,773
<ALLOWANCE> 22,597
<TOTAL-ASSETS> 1,869,211
<DEPOSITS> 1,305,714
<SHORT-TERM> 317,173
<LIABILITIES-OTHER> 17,488
<LONG-TERM> 113,598
0
0
<COMMON> 51,038
<OTHER-SE> 64,200
<TOTAL-LIABILITIES-AND-EQUITY> 1,869,211
<INTEREST-LOAN> 89,481
<INTEREST-INVEST> 15,023
<INTEREST-OTHER> 644
<INTEREST-TOTAL> 105,148
<INTEREST-DEPOSIT> 45,120
<INTEREST-EXPENSE> 63,760
<INTEREST-INCOME-NET> 41,388
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 16
<EXPENSE-OTHER> 41,348
<INCOME-PRETAX> 14,141
<INCOME-PRE-EXTRAORDINARY> 14,141
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,267
<EPS-PRIMARY> 1.88
<EPS-DILUTED> 1.88
<YIELD-ACTUAL> 7.89
<LOANS-NON> 4,729
<LOANS-PAST> 0
<LOANS-TROUBLED> 330
<LOANS-PROBLEM> 14,159
<ALLOWANCE-OPEN> 22,807
<CHARGE-OFFS> 602
<RECOVERIES> 393
<ALLOWANCE-CLOSE> 22,598
<ALLOWANCE-DOMESTIC> 22,598
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 21,562
</TABLE>
