<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, 1997
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, 1997: 9,089,814
<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, 1997
and March 31, 1997....................................... 2
Consolidated Statements of Income for the Three and Six
Months Ended September 30, 1997 and 1996................. 3
Consolidated Statements of Cash Flows for the Six
Months Ended September 30, 1997 and 1996................. 4
Notes to Unaudited Consolidated Financial Statements..... 6
Item 2 Management's Discussion and Analysis
Results of Operations.................................... 9
Financial Condition...................................... 13
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...... 22
Item 5 Other Information...................................... 22
Item 6 Exhibits and Reports on Form 8-K....................... 22
Signatures................................................................ 23
1
<PAGE>
Consolidated Balance Sheets
(Unaudited)
September 30, March 31,
1997 1997
-----------------------------
(In Thousands)
Assets
Cash............................................ $ 27,744 $ 31,482
Interest-bearing deposits....................... 3,137 6,543
---------- ----------
Cash and cash equivalents..................... 30,881 38,025
Securities available for sale:
Investment securities......................... 67,030 35,569
Mortgage-related securities................... 74,019 80,300
Securities held to maturity:
Investment securities (fair value of
$15.8 million and $7.9 million,
respectively)............................... 15,705 7,947
Mortgage-related securities (fair value of
$143.7 million and $157.8 million,
respectively)............................... 143,584 160,101
Loans receivable, net:
Held for sale................................. 13,952 5,348
Held for investment........................... 1,505,931 1,461,423
Foreclosed properties and repossessed assets,
net........................................... 6,665 4,222
Real estate held for development and sale....... 22,762 23,706
Office properties and equipment................. 18,937 18,662
Federal Home Loan Bank stock--at cost........... 21,946 18,981
Accrued interest on investments and loans....... 14,077 13,729
Prepaid expenses and other assets............... 19,260 16,970
---------- ----------
Total assets................................ $1,954,749 $1,884,983
---------- ----------
---------- ----------
Liabilities and Stockholders' Equity
Deposits........................................ $1,344,040 $1,312,445
Advance payments by borrowers for taxes and
insurance..................................... 21,021 7,675
Federal Home Loan Bank and other borrowings..... 430,592 392,204
Reverse repurchase agreements................... 17,671 39,335
Other liabilities............................... 16,275 15,437
---------- ----------
Total liabilities........................... 1,829,599 1,767,096
---------- ----------
---------- ----------
Preferred stock, $.10 par value, 5,000,000
shares authorized, none outstanding........... -- --
Common stock, $.10 par value, 20,000,000 shares
authorized, 12,499,324 shares issued.......... 625 625
Additional paid-in capital.................... 50,946 50,443
Retained earnings............................. 118,323 110,735
Less: Treasury stock (3,445,760 shares and
3,336,630 shares, respectively)....... (44,388) (41,937)
Common stock purchased by recognition
plans................................. (976) (1,246)
Net unrealized gain (loss) on securities
available for sale, net of tax........ 620 (733)
---------- ----------
Total stockholders' equity.................. 125,150 117,887
---------- ----------
Total liabilities and stockholders' equity $1,954,749 $1,884,983
---------- ----------
---------- ----------
See accompanying Notes to Unaudited Consolidated Financial Statements.
2
<PAGE>
Consolidated Statements of Income
(Unaudited)
<TABLE>
Three Months Ended Six Months Ended
September 30, September 30,
------------------ ------------------
1997 1996 1997 1996
-------- -------- -------- --------
(In Thousands, Except Per Share Data)
<S> <C> <C> <C> <C>
Interest income:
Loans................................... $32,508 $29,615 $63,838 $59,340
Mortgage-related securities............. 3,589 4,117 7,325 7,600
Investment securities................... 1,296 1,163 2,295 2,072
Interest-bearing deposits............... 153 142 285 316
-------- -------- -------- --------
Total interest income................. 37,546 35,037 73,743 69,328
Interest expense:
Deposits................................ 15,998 14,991 31,698 29,458
Notes payable and other borrowings...... 6,694 6,193 13,260 12,007
Other................................... 166 180 269 289
-------- -------- -------- --------
Total interest expense................ 22,858 21,364 45,227 41,754
-------- -------- -------- --------
Net interest income................... 14,688 13,673 28,516 27,574
Provision for loan losses................. 25 -- 25 --
-------- -------- -------- --------
Net interest income after provision
for loan losses..................... 14,663 13,673 28,491 27,574
Non-interest income:
Loan servicing income................... 781 752 1,541 1,456
Service charges on deposits............. 1,005 939 1,960 1,821
Insurance commissions................... 283 418 550 737
Net gain on sale of loans............... 639 251 1,106 408
Other................................... (111) 2,954 1,246 4,861
-------- -------- -------- --------
Total non-interest income............. 2,597 5,314 6,403 9,283
Non-interest expenses:
Compensation............................ 4,874 5,193 9,717 10,725
Occupancy............................... 757 720 1,678 1,474
Federal insurance premiums.............. 205 714 415 1,419
Federal insurance special assessment.... -- 7,663 -- 7,663
Furniture and equipment................. 728 705 1,597 1,425
Data processing......................... 611 526 1,246 1,027
Marketing............................... 565 533 1,132 1,051
Other................................... 1,444 3,253 3,529 5,254
-------- -------- -------- --------
Total non-interest expenses........... 9,184 19,307 19,314 30,038
-------- -------- -------- --------
Income (loss) before income taxes..... 8,076 (320) 15,580 6,819
Income taxes (benefit).................... 3,101 (390) 5,984 2,214
-------- -------- -------- --------
Net income............................ $ 4,975 $ 70 $ 9,596 $ 4,605
-------- -------- -------- --------
-------- -------- -------- --------
Earnings per share:
Primary................................. $ 0.52 $ 0.01 $ 1.00 $ 0.46
Fully diluted........................... 0.51 0.01 0.99 0.46
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements.
3
<PAGE>
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
Six Months Ended
September 30,
------------------------
1997 1996
------------------------
(In Thousands)
<S> <C> <C>
Operating Activities
Net income......................................... $ 9,596 $ 4,605
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for losses on loans and real
estate....................................... 25 --
Provision for depreciation and amortization.... 1,155 1,036
Loans originated for sale...................... (115,564) (66,827)
Proceeds from sales of loans held for sale..... 132,679 75,756
Net gain on sale of loans and securities....... (1,131) (408)
Increase in accrued interest receivable........ (348) (1,520)
Increase (decrease) in accrued interest
payable...................................... (113) 2,007
Increase in accounts payable................... 1,253 6,636
Other.......................................... (1,247) (4,549)
--------- ---------
Net cash provided by operating activities...... 26,305 16,736
Investing Activities
Proceeds from sales of investment securities
available for sale............................... 5,994 --
Proceeds from maturities of investment securities.. 2,750 --
Purchase of investment securities available for
sale............................................. (38,357) (26,882)
Purchase of investment securities held to maturity. (8,763) (4,453)
Purchase of mortgage-related securities held to
maturity......................................... (2,735) (12,974)
Principal collected on mortgage-related securities. 21,134 28,50
Net increase in loans receivable................... (70,736) (123,089)
Office properties and equipment, net............... (230) (750)
Sales of real estate............................... 5,562 9,933
Acquisition and development of real estate held
for sale......................................... (5,293) (6,021)
--------- ---------
Net cash used by investing activities............ (90,674) (135,734)
</TABLE>
4
<PAGE>
Consolidated Statements of Cash Flows (Cont'd)
<TABLE>
Six Months Ended September 30,
----------------------------------
1997 1996
----------------------------------
(In Thousands)
<S> <C> <C>
Financing Activities
Increase in deposit accounts......................... $ 31,612 $ 50,040
Increase in advance payments by borrowers for
taxes and insurance................................ 13,346 14,584
Proceeds of notes payable to Federal Home Loan Bank.. 288,400 340,300
Repayment of notes payable to Federal Home Loan Bank. (245,150) (287,050)
Increase (decrease) in securities sold under
agreements to repurchase........................... (21,664) 19,047
Decrease in other loans payable...................... (4,862) (1,730)
Treasury stock purchased............................. (3,353) (11,379)
Cash received from stock options exercised........... 258 190
Payments of cash dividends to stockholders........... (1,362) (1,090)
--------- ---------
Net cash provided by financing activities........ 57,225 122,912
--------- ---------
Increase (decrease) in cash and cash equivalents... (7,144) 3,914
Cash and cash equivalents at beginning of year....... 38,025 43,689
--------- ---------
Cash and cash equivalents at end of year........... $ 30,881 $ 47,603
--------- ---------
--------- ---------
Supplementary cash flow information:
Interest paid (including amounts credited to
deposit accounts)................................ $ 39,747 $ 45,475
Income taxes paid.................................. 5,765 5,441
Non-cash transactions:
Mortgage loans transferred to loans held for sale.. 24,588 --
Loans transferred to foreclosed properties......... 1,590 785
Mortgages loans held for investment converted into
mortgage-backed securities held to maturity...... -- 54,938
Securities available for sale market value
adjustment....................................... 5,794 (1,276)
</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"),
Investment Directions, Inc. ("IDI") and Nevada Investment Directions, Inc.
("NIDI"). The Bank's statements include its wholly-owned subsidiaries,
Anchor Insurance Services, Inc. ("AIS"), ADPC Corporation ("ADPC"), Anchor
Investment Corporation ("AIC"), 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 six month periods ended September
30, 1997 are not necessarily indicative of results that may be expected for
any other interim period or the entire year ending March 31, 1998. 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, 1997.
NOTE 3 - STOCKHOLDERS' EQUITY
Effective August 15, 1997, the Corporation declared a two-for-one stock
split. Shares issued and earnings per share as of March 31, 1997 have been
restated as such.
On July 15, 1997, 28,500 shares of the management recognition plan were
earned by the recipients. During the quarter ended September 30, 1997,
options for 29,830 shares of common stock were exercised at a weighted price
of $7.27 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 ($477,000) was charged to retained earnings.
During the quarter
6
<PAGE>
ended September 30, 1997, the Corporation repurchased 25,000 shares of common
stock on the open market for a weighted average price of $23.26. On August
15, 1997, the Corporation paid out a cash dividend of $.08 per share,
amounting to $725,000.
NOTE 4 - EARNINGS PER SHARE
Earnings per share for the three and six months ended September 30, 1997 and
1996 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, 1996 have
been adjusted to reflect the two-for-one stock split distributed on August
15, 1997.
7
<PAGE>
<TABLE>
Three Months Ended September 30,
--------------------------------------------------------------------
1997 1996
--------------------------------------------------------------------
Primary Fully Diluted Primary Fully Diluted
--------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Net income................................. $4,974,456 $4,974,456 $ 69,997 $ 69,997
---------- ---------- ---------- ----------
Weighted average common shares
outstanding.............................. 9,054,998 9,054,998 9,292,960 9,292,960
Common stock equivalents based on the
treasury stock method.................... 578,762 626,506 464,158 450,444
---------- ---------- ---------- ----------
Total weighted average common shares
and equivalents outstanding.............. 9,633,760 9,681,504 9,757,118 9,743,404
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Earnings per share......................... $ 0.52 $ 0.51 $ 0.01 $ 0.01
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
<TABLE>
Six Months Ended September 30,
--------------------------------------------------------------------
1997 1996
--------------------------------------------------------------------
Primary Fully Diluted Primary Fully Diluted
--------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Net income................................. $9,595,512 $9,595,512 $4,605,274 $4,605,274
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average common shares
outstanding.............................. 9,054,998 9,054,998 9,482,344 9,482,344
Common stock equivalents based on the
treasury stock method.................... 547,553 643,858 461,638 465,946
---------- ---------- ---------- ----------
Total weighted average common shares
and equivalents outstanding.............. 9,602,551 9,698,856 9,943,982 9,948,290
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Earnings per share......................... $ 1.00 $ 0.99 $ 0.46 $ 0.46
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
NOTE 5 - SUBSEQUENT EVENTS
On October 22, the Corporation declared a $.08 per share cash dividend to be
paid on November 15, 1997 to stockholders of record on November 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, 1997
increased to $5.0 million and $9.6 million, respectively, from $70,000 and
$4.6 million, respectively, for the same periods in the prior year. The
increase in net income for the periods was largely 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 (Savings Association Insurance Fund), which
occurred in the same period of the prior year. Additional changes included
(i) an increase in net interest income of $1.0 million and $900,000,
respectively, for the three and six months ended September 30, 1997, compared
to the same periods last year, (ii) a decrease in non-interest income of $2.7
million and $2.9 million, respectively, which were partially offset by
decreases in non-interest expenses of $2.5 million and $3.1 million,
respectively, and (iii) increases in income taxes of $400,000 and $700,000,
respectively, all of which are exclusive of the one-time SAIF charge.
Net Interest Income. Net interest income increased $1.0 million and $900,000
for the three and six months ended September 30, 1997 compared to the same
periods in 1996. The net interest margin increased to 3.16% from 3.07% for
the respective three month periods and decreased to 3.09% from 3.15% for the
respective six month periods. The interest rate spread increased to 2.98%
from 2.87% and decreased to 2.92% from 2.94%, respectively, for the same
periods.
Interest income on loans increased $2.9 million and $4.5 million for the
three and six month periods ended September 30, 1997 as compared to the same
periods in the prior year. This increase was a result of the increase of
$90.9 million and $87.9 million, respectively, in the average balance of
loans for the periods as well as increases of 27 basis points and 12 basis
points in the overall yield on loan receivables for the same respective
periods. Interest income on mortgage-related securities decreased $528,000
and $275,000 respectively, for the same periods due primarily to the
decrease of $34.5 million and $11.6 million, respectively, in the average
balance of mortgage-related securities.
Interest expense on deposits increased $1.0 million and $2.2 million for the
three and six month periods ended September 30, 1997 as compared to the same
periods in 1996. The increase was due primarily to the increase in the
average balance of deposits of $60.3 million and $68.4 million, respectively,
as a result of various demand deposit and certificate promotions. In
addition, the average rate on deposits increased from 4.73% and 4.70%,
respectively, to 4.82% and 4.80% during the three and six months ended
September 30, 1997 and 1996, respectively, primarily as a result of the
above-described deposit promotions. Interest expense on notes payable and
other borrowings increased $500,000 and $1.3 million, respectively, during
the same periods. This was a result of an increase of $24.6 million and
$37.1 million in the average balance of borrowings during the same respective
periods.
9
<PAGE>
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>
Three Months Ended September 30,
---------------------------------------------------------------------
1997 1996
--------------------------------- --------------------------------
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.............................. $1,166,151 $24,139 8.28% $1,136,388 $22,386 7.88%
Consumer loans.............................. 335,975 7,579 9.02 275,802 6,571 9.53
Commercial business loans................... 28,175 790 11.22 27,213 658 9.67
---------- ------- ---------- -------
Total loans receivable.................... 1,530,301 32,508 8.50 1,439,403 29,615 8.23
Mortgage-related securities................. 221,090 3,589 6.49 255,639 4,117 6.44
Investment securities....................... 79,097 941 4.76 59,022 850 5.76
Interest-bearing deposits................... 10,712 153 5.71 10,961 142 5.18
Federal Home Loan Bank stock................ 20,830 355 6.82 18,395 313 6.81
---------- ------- ---------- -------
Total interest-earning assets............. 1,862,030 37,546 8.07 1,783,420 35,037 7.86
Non-interest-earning assets................. 79,065 62,372
---------- ----------
Total assets.............................. $1,941,095 $1,845,792
---------- ----------
---------- ----------
INTEREST-BEARING LIABILITIES
Demand deposits............................ $ 329,449 2,374 2.88 $ 291,429 1,904 2.61
Regular passbook savings................... 100,758 579 2.30 103,984 600 2.31
Certificates of deposit.................... 896,723 13,045 5.82 871,265 12,487 5.73
---------- ------- ----- ---------- ------- -----
Total deposits........................... 1,326,930 15,998 4.82 1,266,678 14,991 4.73
Notes payable and other borrowings......... 450,734 6,694 5.94 426,151 6,193 5.81
Other...................................... 18,103 166 3.67 19,160 180 3.76
---------- ------- ----- ---------- ------- -----
Total interest-bearing liabilities....... 1,795,767 22,858 5.09 1,711,989 21,364 4.99
------- ----- ------- -----
Non-interest-bearing liabilities........... 20,339 17,865
---------- ----------
Total liabilities........................ 1,816,106 1,729,854
Stockholders' equity....................... 124,989 115,938
---------- ----------
Total liabilities and stockholders'
equity................................. $1,941,095 $1,845,792
---------- ----------
---------- ----------
Net interest income/interest rate spread. $14,688 2.98% $13,673 2.87%
------- ----- ------- -----
------- ----- ------- -----
Net interest-earning assets.............. $ 66,263 $ 71,431
---------- ----------
---------- ----------
Net interest margin...................... 3.16% 3.07%
----- -----
----- -----
Ratio of average interest-earning
assets to average interest-bearing
liabilities............................ 1.04 1.04
---------- ----------
---------- ----------
</TABLE>
- -----------------------
(1) Annualized
10
<PAGE>
<TABLE>
Six Months Ended September 30,
---------------------------------------------------------------------
1997 1996
--------------------------------- --------------------------------
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.............................. $1,157,597 $47,382 8.19% $1,136,966 $44,947 7.91%
Consumer loans.............................. 334,330 14,911 8.92 267,098 12,980 9.72
Commercial business loans................... 28,524 1,545 10.83 28,521 1,413 9.91
---------- ------- ---------- -------
Total loans receivable.................... 1,520,451 63,838 8.40 1,432,585 59,340 8.28
Mortgage-related securities................. 226,373 7,325 6.47 237,923 7,600 6.39
Investment securities....................... 68,686 1,608 4.68 51,199 1,474 5.76
Interest-bearing deposits................... 10,208 285 5.58 11,171 315 5.66
Federal Home Loan Bank stock................ 20,290 687 6.77 17,666 598 6.77
---------- ------- ---------- -------
Total interest-earning assets............. 1,846,008 73,743 7.99 1,750,544 69,328 7.92
Non-interest-earning assets................. 78,377 63,573
---------- ----------
Total assets.............................. $1,924,385 $1,814,117
---------- ----------
---------- ----------
INTEREST-BEARING LIABILITIES
Demand deposits............................ $ 320,628 4,620 2.88 $ 285,039 3,686 2.59
Regular passbook savings................... 100,800 1,152 2.29 105,175 1,209 2.30
Certificates of deposit.................... 899,327 25,929 5.77 862,154 24,563 5.70
---------- ------- ----- ---------- ------- -----
Total deposits........................... 1,320,755 31,698 4.80 1,252,368 29,458 4.70
Notes payable and other borrowings......... 447,060 13,260 5.93 409,973 12,007 5.86
Other...................................... 14,821 269 3.63 15,688 289 3.68
---------- ------- ----- ---------- ------- -----
Total interest-bearing liabilities....... 1,782,636 45,227 5.07 1,678,029 41,754 4.98
------- ----- ------- -----
Non-interest-bearing liabilities........... 18,777 18,026
---------- ----------
Total liabilities........................ 1,801,411 1,696,055
Stockholders' equity....................... 122,974 118,062
---------- ----------
Total liabilities and stockholders'
equity................................. $1,924,385 $1,814,117
---------- ----------
---------- ----------
Net interest income/interest rate spread. $28,516 2.92% $27,574 2.94%
------- ----- ------- -----
------- ----- ------- -----
Net interest-earning assets.............. $ 63,372 $ 72,515
---------- ----------
---------- ----------
Net interest margin...................... 3.09% 3.15%
----- -----
----- -----
Ratio of average interest-earning
assets to average interest-bearing
liabilities............................ 1.04 1.04
---------- ----------
---------- ----------
</TABLE>
- -----------------------
(1) Annualized
11
<PAGE>
Provision for Loan Losses. Provision for loan losses increased $25,000 for both
respective three and six month periods as compared to the same periods in 1996.
See "Asset Quality" for further discussion.
Non-Interest Income. Non-interest income decreased $2.7 million and $2.9
million during the three and six months ended September 30, 1997 as compared to
the same periods in the prior year largely as a result of decreases in other
income of $3.1 million and $3.6 million, respectively. Those decreases in
other income were chiefly due to decreases in partnership income of $3.0 million
and $3.7 million for the respective three and six month periods mostly resulting
from decreased sale activity of partnerships. These decreases in other income
were partially offset by increases of $400,000 and $700,000 from the net gain on
sale of loans for the same respective periods.
Non-Interest Expense. Non-interest expense decreased $10.1 million and $10.7
million, respectively, during the three and six month periods ended September
30, 1997 as compared to the same periods in 1996, as a result of several
factors. The majority of these decreases was due to the one-time charge during
the prior period of $7.7 million associated with the recapitalization of the
SAIF. Exclusive of the charge, non interest expenses decreased $2.4 million and
$3.0 million, respectively, during the three and six month periods ended
September 30, 1997, as compared to the same periods in 1996. Compensation
expense decreased $300,000 and $1.0 million, respectively, due primarily to the
elimination of the cost associated with the Employee Stock Ownership Plan. These
decreases were accompanied by the reduction of the federal insurance premium of
$500,000 and $1.0 million, respectively, for the same periods, stemming from the
recapitalization of the SAIF in the prior three and six month periods ended
September 30, 1996. Other expenses also decreased by $1.8 million and 1.7
million for the respective three and six month periods ended September 30, 1997,
as compared to the same periods in 1996. The decreases in other expenses were
largely caused by decreases in the minority interest in net income of
partnerships of $1.3 million and $1.5 million, respectively, for the three and
six month periods as compared to the same periods of the prior year. These
decreases were partially offset by increases in several other areas of expenses.
Furniture and occupancy expenses, increased by $20,000 and $40,000,
respectively, for the three month period and by $170,000 and $200,000,
respectively, for the six month period ended September 30, 1997 when compared to
the same periods of the prior year. These increases were largely due to
increased expenses associated with additional offices. Data processing expense
increased by $85,000 and $220,000, for the same respective periods, as compared
to the same periods of the prior year.
Income Taxes. Income tax expense increased $3.5 million and $3.8 million,
respectively, during the three and six months ended September 30, 1997 as
compared to the same periods in 1996. These increases were attributable to the
tax effect of the one-time charge associated with the SAIF recapitalization
which was $3.1 million in September 1996. The effective tax rates were 38.40%
and 38.41% as compared to 121.88% and 32.47%, respectively, for the same
periods. Exclusive of the one-time charge to recapitalize the SAIF and related
tax effect in the prior year, the effective tax rates were 38.40% and 38.41%,
respectively, during the three and six months ended September 30, 1997 as
compared to 36.58% and 36.53% during the same periods in 1996.
12
<PAGE>
FINANCIAL CONDITION
During the six months ended September 30, 1997, the Corporation increased its
assets $70.0 million from $1.88 billion to $1.95 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
$39.2 million as a result of (i) purchases of $47.1 million of U.S. Government
and agency securities and (ii) market value and other adjustments of $843,000,
which were partially offset by sales and maturities of $8.7 million.
Mortgage-related securities (both available for sale and held to maturity)
decreased $22.8 million as a result of principal repayments and market value
adjustments. Mortgage-related securities consisted of $189.3 million of
mortgage-backed securities and $28.3 million of mortgage-derivative securities
at September 30, 1997.
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 $53.1 million during the
six months ended September 30, 1997. Activity for the period included (i)
originations and purchases of $406.1 million, (ii) sales of $131.5 million, and
(iii) principal repayments and other adjustments of $221.5 million.
Deposits increased $31.6 million during the six months ended September 30, 1997.
The increase was due primarily to new demand deposit products and various
promotions. Brokered deposits have been used in the past and may be used in the
future as the need for funds requires it. Brokered deposits totalled $45.0
million at September 30, 1997 and generally mature in one year. FHLB advances
increased $43.3 million during the six months ended September 30, 1997. Reverse
repurchase agreements and other borrowings decreased $21.7 million during the
six months ended September 30, 1997. Advance payments by borrowers for taxes
and insurance increased $13.3 million.
Stockholders' equity increased $7.3 million during the six months ended
September 30, 1997 as a net result of (i) net income of $9.6 million, (ii) stock
options exercised of $260,000, (iii) management recognition plan shares earned
and related tax adjustments totalling $770,000, and (iv) a 1.4 million change in
net unrealized loss of available-for-sale securities, all of which more than
offset (v) treasury stock repurchased of $3.4 million, and (vi) cash dividends
of $1.4 million.
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 $16.0 million at September 30, 1997 from $13.8 million at March 31,
1997 and increased as a percentage of total assets to 0.82% from 0.73% at such
dates, respectively.
Non-performing assets are summarized as follows at the dates indicated:
<TABLE>
At March 31,
At September 30, -----------------------
1997 1997 1996 1995
--------------- -----------------------
(Dollars In Thousands)
<S> <C> <C> <C> <C>
Non-accrual loans:
Single-family residential $ 1,616 $ 1,712 $ 629 $ 833
Multi-family residential 2,369 3,199 - -
Commercial real estate 885 778 470 624
Construction and land 58 58 81 81
Consumer 654 438 202 219
Commercial business 806 610 508 736
-------- ------- ------- --------
Total non-accrual loans 6,388 6,795 1,890 2,493
Real estate held for development and sale 2,937 2,736 2,319 857
Foreclosed properties and repossessed assets, net 6,665 4,222 6,077 7,116
-------- ------- ------- --------
Total non-performing assets $ 15,990 $13,753 $10,286 $10,466
-------- ------- ------- --------
-------- ------- ------- --------
Performing troubled debt restructurings $ 3,249 $ 329 $ 332 $ 335
-------- ------- ------- --------
-------- ------- ------- --------
Total non-accrual loans to total loans 0.43% 0.44% 0.13% 0.19%
Total non-performing assets to total assets 0.82 0.73 0.59 0.69
Allowance for loan losses to total loans 1.49 1.48 1.59 1.75
Allowance for loan losses to total
non-accrual loans 347.45 334.81 1206.72 899.68
Allowance for loan and foreclosure losses
to total non-performing assets 145.05 173.26 228.70 221.82
</TABLE>
Non-accrual loans decreased $407,000 during the six months ended September 30,
1997. Non-performing real estate held for development and sale increased
$201,000 for the same period. Foreclosed properties and repossessed assets
increased $2.4 million during the same period.
At September 30, 1997, there was one non-accrual loan with a carrying value of
greater than $1.0 million. The loan, which had a total carrying value of $1.9
million, represented a 26%
14
<PAGE>
participation secured by a 48-unit condominium project in Bloomington,
Minnesota. Voluntary foreclosure on this project is presently being sought
by the Bank.
Foreclosed properties and repossessed assets include three properties each with
a carrying value of greater than $ 1.0 million. The first property is an
apartment complex in Elm Grove, Wisconsin, with a net carrying value of $2.2
million at September 30, 1997. 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, it will
pursue reimbursement from the adjoining land owner, who is believed to have
caused the contamination. The second is a 12-unit condominium project and
associated land in Madison, Wisconsin. The Corporation's net carrying value of
this property totalled $1.5 million at September 30, 1997. ADPC is presently in
the process of selling individual units. The third property consists of several
condominium units related to, but not a part of, those units which were
discussed in the aforementioned non-accrual loan for the condominium project in
Bloomington, Minnesota. The units were purchased in July, 1997, at auction, in
an effort to solidify the Bank's position with regard to the original 48 units.
Because the state of Minnesota has a six month redemption period, the Bank is
essentially prohibited from doing anything with the units until after January,
1998. The net carrying value of these units was $1.9 million at September 30,
1997.
Performing troubled debt restructurings consist primarily of a $3.2 million
hotel and office building located in Garden Grove, California. This loan was
previously removed from foreclosed properties and repossessed assets, in fiscal
1997, due to a repayment plan from the bankruptcy settlement.
At September 30, 1997, assets that the Bank has classified, as "substandard",
net of reserves, consisted of $20.9 million of loans and foreclosed properties.
As of March 31, 1997, the substandard assets amounted to $16.5 million. The
increase was primarily due to the classification of a 93% participation loan to
the Foxhills Resort Limited Partnership located in Mishicot, Wisconsin totalling
$4.8 million. Payments are current on the loan.
The following table sets forth information relating to the Corporation's loans
which are less than 90 days delinquent at the dates indicated.
At March 31,
At September 30, ------------------------
1997 1997 1996 1995
--------------- ------------------------
(In Thousands)
30 to 59 days $ 4,920 $ 3,144 $ 5,776 $ 2,696
60 to 89 days 1,068 909 789 1,099
------- ------- ------- -------
Total $ 5,988 $ 4,053 $ 6,565 $ 3,795
------- ------- ------- -------
------- ------- ------- -------
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
15
<PAGE>
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.
A summary of the activity in the allowance for losses on loans follows:
Three Months Ended Six Months Ended
September 30, September 30,
-------------------------------------------
1997 1996 1997 1996
-------------------------------------------
(Dollars In Thousands)
Allowance at beginning of period $ 22,431 $ 22,839 $ 22,750 $ 22,807
Charge-offs:
Mortgage 12 (89) (29) (129)
Consumer (307) (109) (653) (125)
Commercial business (8) (180) (8) (181)
--------- --------- --------- ---------
Total charge-offs (303) (378) (690) (435)
Recoveries:
Mortgage 7 9 51 18
Consumer 20 1 22 3
Commercial business 15 9 37 87
--------- --------- --------- ---------
Total recoveries 42 19 110 108
--------- --------- --------- ---------
Net charge-offs (261) (359) (580) (327)
Provision 25 - 25 -
--------- --------- --------- ---------
Allowance at end of period $ 22,195 $ 22,480 $ 22,195 $ 22,480
--------- --------- --------- ---------
--------- --------- --------- ---------
Net charge-offs to average loans (0.07)% (0.10)% (0.08)% (0.05)%
--------- --------- --------- ---------
--------- --------- --------- ---------
Although management believes that the September 30, 1997 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, 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, 1997, the Corporation had outstanding commitments to originate
loans of $37.5 million, commitments to extend funds to, or on behalf of,
customers pursuant to lines and letters of credit of $76.2 million and loans
sold with recourse to the Corporation in the event of default by the borrower of
$2.0 million. Scheduled maturities of certificates of deposit during the twelve
months following September 30, 1997 amounted to $730.6 million and scheduled
maturities of FHLB advances during the same period totalled $326.1 million. At
September 30, 1997, the Corporation also had $17.7 million of reverse repurchase
agreements, all of which are scheduled to mature during the twelve months
following September 30, 1997. 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%, which has been proposed
by the OTS to be reduced to 4%. During the quarter ended September 30, 1997,
the Bank's average liquidity ratio was 10.56%.
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
requirement of the State of Wisconsin which is 6% of total assets. The Bank's
capital ratio for this measurement is 6.91% as of September 30, 1997.
17
<PAGE>
The following summarizes the Bank's capital levels and ratios and the levels and
ratios required by the OTS at September 30, 1997 and September 30, 1996.
<TABLE>
Minimum Required to be Well
For Capital Capitalized Under
Actual Adequacy Purposes OTS Requirements
-------------------------------------------------------------
Amount Ratio Amount Ratio Amount Ratio
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
As of September 30, 1997:
Tier 1 capital
(to adjusted tangible assets) $ 109,638 5.69% $ 57,790 3.00% $ 96,316 5.00%
Risk-based capital
(to risk-based assets) 124,473 10.54 94,450 8.00 118,062 10.00
Tangible capital
(to tangible assets) 109,638 5.69 28,895 1.50 N/A N/A
As of September 30, 1996:
Tier 1 capital
(to adjusted tangible assets) 103,168 5.49 56,425 3.00 94,041 5.00
Risk-based capital
(to risk-based assets) 116,727 10.63 87,817 8.00 109,772 10.00
Tangible capital
(to tangible assets) 103,168 5.49 28,212 1.50 N/A N/A
</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, 1997. 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
18
<PAGE>
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 September 30, 1997 for one year
or less was a positive 1.75% 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, 1997.
<TABLE>
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 $ 106,335 $ 64,781 $ 19,528 $ 9,728 $ 200,372
Variable 695,292 261,915 12,534 - 969,741
Consumer loans(1) 260,238 62,928 10,780 3,666 337,612
Commercial business loans(1) 27,014 823 70 56 27,963
Mortgage-related securities(3) 115,893 79,203 18,007 4,501 217,604
Investment securities and other
interest-earning assets(3) 70,163 10,390 27,252 - 107,805
----------- --------- --------- -------- -----------
Total $ 1,274,935 $ 480,040 $ 88,171 $ 17,951 $ 1,861,097
----------- --------- --------- -------- -----------
----------- --------- --------- -------- -----------
Interest-bearing liabilities:
Deposits(4) $ 893,305 $ 255,537 $ 58,234 $ 43,772 $ 1,250,848
Borrowings 347,491 85,549 13,191 2,032 448,263
----------- --------- --------- -------- -----------
Total $ 1,240,796 $ 341,086 $ 71,425 $ 45,804 $ 1,699,111
----------- --------- --------- -------- -----------
----------- --------- --------- -------- -----------
Interest sensitivity gap $ 34,139 $ 138,954 $ 16,746 $(27,853) $ 161,986
----------- --------- --------- -------- -----------
----------- --------- --------- -------- -----------
Cummulative interest sensitivity gap $ 34,139 $ 173,093 $ 189,839 $161,986
----------- --------- --------- --------
----------- --------- --------- --------
Cummulative interest sensitivity gap
as a percent of total assets 1.75% 8.86% 9.71% 8.29%
----------- --------- --------- --------
----------- --------- --------- --------
</TABLE>
(1) Balances have been reduced for (i) undisbursed loan proceeds, which
aggregated $47.0 million, and (ii) non-accrual loans, which amounted to $6.4
million.
(2) Includes $14.0 million of loans held for sale spread throughout the periods.
(3) Includes $74.0 million of securities available for sale spread throughout
the periods.
(4) Does not include $85.5 million of demand accounts because they are
non-interest-bearing. Also does not include accrued interest payable, which
amounted to $7.7 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 is 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. This also covered 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,
the result of which 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 has appealed the verdict and remains receptive to a negotiated
settlement. During fiscal 1997, the lawsuit by the Homeowners Association was
settled for $1.2 million, the amount of which represents a full and complete
settlement of any and all alleged structural deficiencies. Based on the outcome
of the above described cases 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.
21
<PAGE>
Item 4 Submission of Matter to Vote of Securities Holders.
Not applicable.
Item 5 Other Information.
None.
Item 6 Exhibits and Reports.
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, 1997 By: /s/ Douglas J. Timmerman
------------------- --------------------------------------------
Douglas J. Timmerman, Chairman of the
Board, President and Chief Executive Officer
Date: October 31, 1997 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> MAR-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 27,744
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 3,137
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 141,048
<INVESTMENTS-CARRYING> 159,289
<INVESTMENTS-MARKET> 159,473
<LOANS> 1,579,637
<ALLOWANCE> 22,195
<TOTAL-ASSETS> 1,954,749
<DEPOSITS> 1,344,040
<SHORT-TERM> 347,491
<LIABILITIES-OTHER> 37,297
<LONG-TERM> 69,924
0
0
<COMMON> 51,572
<OTHER-SE> 73,578
<TOTAL-LIABILITIES-AND-EQUITY> 1,954,749
<INTEREST-LOAN> 63,838
<INTEREST-INVEST> 9,620
<INTEREST-OTHER> 285
<INTEREST-TOTAL> 73,743
<INTEREST-DEPOSIT> 31,698
<INTEREST-EXPENSE> 45,227
<INTEREST-INCOME-NET> 28,516
<LOAN-LOSSES> 25
<SECURITIES-GAINS> 25
<EXPENSE-OTHER> 19,314
<INCOME-PRETAX> 15,580
<INCOME-PRE-EXTRAORDINARY> 15,580
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,596
<EPS-PRIMARY> 1.00
<EPS-DILUTED> .99
<YIELD-ACTUAL> 7.99
<LOANS-NON> 6,388
<LOANS-PAST> 0
<LOANS-TROUBLED> 3,249
<LOANS-PROBLEM> 14,530
<ALLOWANCE-OPEN> 22,750
<CHARGE-OFFS> 690
<RECOVERIES> 110
<ALLOWANCE-CLOSE> 22,195
<ALLOWANCE-DOMESTIC> 22,195
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 21,117
</TABLE>
