Anchor Bancorp Reports Second Quarter Fiscal 2013 Earnings

Anchor Bancorp Reports Second Quarter Fiscal 2013 Earnings

LACEY, Wash., Jan. 29, 2013 (GLOBE NEWSWIRE) -- Anchor Bancorp (Nasdaq:ANCB)
("Company"), the holding company for Anchor Bank ("Bank"), today reported
second quarter earnings for the fiscal year ending June 30, 2013. For the
quarter ended December 31, 2012, the Company reported net income of $225,000
or $.09 per diluted share, compared to a net income of $93,000 or $.04 per
diluted share for the same period last year.

"Our results continue to improve due to our continued improvement in credit
quality and the reduced provision during the quarter. Our total non-interest
expense decreased $854,000 during the current quarter as compared to the
quarter ended December 31, 2011 which reflects the decline in real estate
owned impairment as well as technology expenses as we take advantage of
efficiencies from our new core processing system that was completed last year.
The prolonged low interest rate environment continues to pressure our net
interest margin, which decreased from 3.68% during the quarter ended September
30, 2012 to 3.54% this quarter. This decline was due in part to our focus on
credit risk during this difficult economic period resulting in our maintaining
higher liquidity at relatively low interest rates. This higher liquidity will
enable us to take advantage of lending and other opportunities when the
economy recovers and interest rates rise," stated Jerald L. Shaw, President
and Chief Executive Officer.

Fiscal Second Quarter Highlights

  * Total classified loans decreased $7.4 million or 22.5% to $25.4 million at
    December 31, 2012 from $32.8 million at June 30, 2012;
  * Total non-performing loans decreased by $3.8 million to $9.1 million or
    29.4% at December 31, 2012 from $12.9 million at December 31, 2011;
  * Provision for loan losses declined to $225,000 for the quarter ended
    December 31, 2012 compared to $475,000 for the quarter ended December 31,
    2011.

Credit Quality

Total delinquent (past due 30 days or more), non-accrual loans and loans 90
days or more past due and still accruing interest increased $2.7 million to
$16.9 million at December 31, 2012 from $14.2 million at June 30, 2012. The
increase was primarily due to one commercial real estate loan with an unpaid
principal balance of $5.5 million more than 90 days past due and still
accruing interest because the loan is beyond its maturity date. The ratio of
non-performing loans, which includes those loans which are 90 days or more
past due and still accruing interest or on non-accrual status, to total loans
increased slightly to 3.1% at December 31, 2012 from 3.0% at June 30, 2012
because of this commercial real estate loan. The Company recorded a $225,000
provision for loan losses for the current quarter compared to $475,000 for the
quarter ended December 31, 2011. The allowance for loan losses of $5.2 million
at December 31, 2012 represented 1.8% of loans receivable and 56.6% of
non-performing loans. 

Non-performing loans increased by $387,000 to $9.1 million at December 31,
2012 from $8.7 million at June 30, 2012 and decreased from $12.9 million at
December 31, 2011.   Non-performing loans consisted of the following at the
dates indicated: 

                       December 31,        June 30,    December 31,
                       2012                2012        2011
                       (In thousands)
Real estate:                                            
One-to-four family     $ 2,116             $ 1,878     $ 3,519 
Multi-family           --                  --          --
Commercial             5,516         ^(1)  --          4,097
Construction           --                  3,369       4,134
Land                   73                  109         23
Total real estate      7,705               5,356       11,773
                                                        
Consumer:                                               
Home equity            247                 159         348
Automobile             53                  66          119
Credit cards           19                  16          166
Other                  --                  1           7
Total consumer         319                 242         640
                                                        
Business:                                               
Commercial business    1,085               3,124       484
                                                        
Total                  $ 9,109             $ 8,722      $ 12,897 
  (1)     Represents a $5.5 million commercial real estate loan               
which is past due more than 90 days and still accruing interest.

As of December 31, 2012, June 30, 2012, and December 31, 2011 there were 37,
30, and 31 loans, respectively, with aggregate net principal balances of $16.2
million, $15.1 million, and $17.2 million, respectively, that we have
identified as "troubled debt restructures." At December 31, 2012, June 30,
2012, and December 31, 2011 there were $3.6 million, $1.2 million, and $2.0
million, respectively of "troubled debt restructures" included in the non-
performing loans above. 

As of December 31, 2012, the Company had 40 properties in real estate owned
("REO") with an aggregate book value of $8.6 million compared to 71 properties
with an aggregate book value of $6.7 million at June 30, 2012, and 109
properties in REO with an aggregate book value of $8.2 million at December 31,
2011.  The decrease in number of properties during the six months ended
December 31, 2012 was primarily attributable to ongoing sales of residential
properties. Twelve residential properties and one commercial real estate
property were sold last quarter. During the quarter ended December 31, 2012
the Bank sold seven residential real estate properties located in Washington
State for an aggregate loss of $84,000. The aggregate book value of REO
increased primarily due to the foreclosure during the current quarter of a
$3.5 million commercial real estate loan located in Pacific, Washington, which
is the Bank's largest REO property at December 31, 2012. At December 31, 2012,
the Bank owned 13 one-to-four family residential properties with an aggregate
book value of $3.1 million, 20 residential building lots with an aggregate
book value of $687,000, one vacant land parcel with a book value of $15,300,
and six parcels of commercial real estate with an aggregate book value of $4.8
million. Our REO is located in southwest Washington and the greater Portland
area of northwest Oregon, with 34 of the parcels in Washington and the
remaining six in Oregon.

Capital

As of December 31, 2012, the Bank exceeded all regulatory capital requirements
with Tier 1 Leverage-Based Capital, Tier 1 Risk-Based Capital and Total
Risk-Based Capital ratios of 11.4%, 16.8% and 18.1%, respectively. As of
December 31, 2011, these ratios were 10.6%, 16.2%, and 17.5%, respectively.  

Anchor Bancorp exceeded all regulatory capital requirements with Tier 1
Leverage-Based Capital, Tier 1 Risk-Based Capital and Total Risk-Based Capital
ratios of 11.7%, 17.3%, and 18.5% as of December 31, 2012.

Balance Sheet Review

Total assets decreased by $2.0 million, or 0.4%, to $468.8 million at December
31, 2012 from $470.8 million at June 30, 2012.   Cash and due from banks
decreased $4.4 million or 5.6%, loans receivable decreased $2.0 million, or
0.7%, and securities available-for-sale increased, $1.5 million, or 3.1%.

Mortgage-backed securities available for sale increased $1.7 million, or 3.6%,
to $48.8 million at December 31, 2012 from $47.1 million at June 30, 2012. The
increase in this portfolio was primarily the result of purchases of eight
Freddie Mac mortgage-backed securities totaling $10.2 million and contractual
payments of $8.2 million.

Loans receivable, net, decreased $2.0 million or 0.7% to $285.7 million at
December 31, 2012 from $287.7 million at June 30, 2012 as a result of normal
principal reductions, transfers to REO and loan charge-offs exceeding new loan
production. Commercial real estate loans increased $11.5 million or 11.8% to
$108.8 million from $97.3 million at June 30, 2012 and one-to-four family
loans decreased $5.7 million or 6.9% to $77.0 million from $82.7 million
during the same period. The Bank continues to reduce its exposure to land and
construction loans. The balance of these loans declined to $10.0 million at
December 31, 2012 compared to $13.8 million at June 30, 2012. All other loan
categories decreased a net $4.0 million.

Loans receivable consisted of the following at the dates indicated:

Real Estate:              December 31,   June 30, 2012   December 31,
                          2012                           2011
                          (In thousands)
One-to-four family         $  77,035      $ 82,709        $ 90,352 
Multi-family              40,824         42,032          46,004
Commercial                108,786        97,306          100,189
Construction              4,581          6,696           8,128
Land loans                5,429          7,062           6,131
Total real estate         236,655        235,805         250,804
                                                          
Consumer:                                                 
Home equity               28,064         31,504          33,402
Credit cards              5,014          5,180           6,653
Automobile                2,409          3,342           4,287
Other consumer            2,822          2,968           3,259
Total consumer            38,309         42,994          47,601
                                                          
Business:                                                 
Commercial business loans 16,730         16,618          16,083
                                                          
                                                          
Total Loans               291,694        295,417         314,488
                                                          
Less:                                                     
Deferred loan fees        808            605             562
Allowance for loan losses 5,152          7,057           6,469
Loans receivable, net      $ 285,734      $ 287,755       $ 307,457

Total liabilities decreased $2.3 million between June 30, 2012 and December
31, 2012, primarily as the result of a $2.5 million or 0.7% decrease in
deposits.  Our core deposits, which consist of all deposits other than
certificates of deposit increased by $10.0 million or 5.7% to $184.6 million
from $174.6 million at June 30, 2012.

Deposits consisted of the following at the dates indicated:

                          December 31, 2012 June 30, 2012    December 31, 2011
                          Amount    Percent Amount   Percent Amount    Percent
                          (Dollars in thousands)
Noninterest-bearing       $38,504   11.2%   $37,941  11.0%   $29,966   8.6%
demand deposits
Interest-bearing demand   19,688    5.8%    16,434   4.8%    18,321    5.2%
deposits
Savings deposits          36,839    10.7%   36,475   10.5%   35,060    10.0%
Money market accounts     89,576    26.1%   83,750   24.2%   84,746    24.3%
Certificates of deposit   158,706   46.2%   171,198  49.5%   181,385   51.9%
Total deposits            $343,313  100.0%  $345,798 100.0%  $349,478  100.0%

FHLB advances remained unchanged at $64.9 million at December 31, 2012 and
June 30, 2012. 

Total stockholders' equity increased $375,000 or 0.7% to $54.4 million at
December 31, 2012 from $54.0 million at June 30, 2012. The increase was
primarily due to the $503,000 in net income during the six months ended
December 31, 2012 offset by an increase in accumulated other comprehensive
loss of $170,000.   Accumulated other comprehensive loss was $195,000 at
December 31, 2012 as compared to a loss of $25,000 at June 30, 2012.  

Operating Results

Anchor Bancorp had net income of $225,000 or $.09 per diluted share, for the
three months ended December 31, 2012 compared to a net income of $93,000 or
$0.04 per diluted share for the same period in 2011. For the six months ended
December 31, 2012, net income was $503,000 or $.20 per diluted share compared
to a net loss of $1.6 million or $.66 per diluted share for the comparable
period in 2011.

Net interest income. Net interest income before the provision for loan losses
decreased $329,000, or 7.9%, to $3.8 million for the quarter ended December
31, 2012 from $4.2 million for the quarter ended December 31, 2011. For the
six months ended December 31, 2012 net interest income before the provision
for loan losses decreased $531,000 or 6.4% to $7.8 million from $8.3 million
for the same period in 2011.    

The Company's net interest margin decreased 15 basis points to 3.54% for the
quarter ended December 31, 2012 from 3.69% for the comparable period in 2011.
The average yield on interest-earning assets decreased 42 basis points to
4.67% for the quarter ended December 31, 2012 compared to 5.09% for the same
period in the prior year. The decline in the yield on interest-earnings assets
was primarily attributable to the decrease in loan volume and the downward
repricing of investment securities. The average cost of interest-bearing
liabilities decreased 29 basis points to 1.32% for the quarter ended December
31, 2012 compared to 1.61% for the same period in the prior year.

Provision for loan losses. In connection with its analysis of the loan
portfolio at December 31, 2012 management determined that a provision for loan
losses of $225,000 was required for the quarter ended December 31, 2012
compared to $475,000 for the same period of the prior year.   The provision
for loan losses decreased by $475,000 to $525,000 for the six months ended
December 31, 2012 from $1.0 million for the same period last year.

Noninterest income. Noninterest income decreased $643,000, or 32.8%, to $1.3
million for the quarter ended December 31, 2012 compared to $2.0 million for
the same quarter a year ago. The decrease in noninterest income was
attributable to a combination of several factors:   there was no gain on sale
of investments for the quarter ended December 31, 2012 as compared to $686,000
for quarter ended December 31, 2011 and deposit service fees declined
$122,000. These decreases were partially offset by an increase of $259,000 for
gain on sale of loans for the quarter ended December 31, 2012. The increase in
the amount of gain on sale of loans was the result of a greater volume of
loans sold into the secondary market during the three months ended December
31, 2012 compared to the three months ended December 31, 2011, which was
attributable to increased demand for one-to-four family loans as a result of
refinancing activity. Noninterest income decreased $720,000 or 21.1% to $2.7
million during the six months ended December 31, 2012 compared to $3.4 million
for the same period in 2011. The decrease was primarily due to no gain on
sales of investments compared to $879,000 for the same period in prior year
and a $261,000 decline in deposit service fees partially offset by a $448,000
increase in gain on sales of loans.   

Noninterest expense. Noninterest expense decreased $854,000, or 15.4%, to $4.7
million for the three months ended December 31, 2012 from $5.6 million for the
three months ended December 31, 2011. The decrease was primarily due to
expenses related to information technology which decreased $383,000 or 50.6%
to $374,000 from $757,000 and to decline in REO related expenses.   Real
estate owned impairment expense decreased $256,000 or 54.6% to $213,000 from
$469,000 during the second fiscal quarter 2012 compared to the same period in
2011, reflecting the stabilization in the real estate market.  Noninterest
expense decreased $2.9 million in the six months ended December 31, 2012 to
$9.5 million from $12.4 million for the six months ended December 31,
2011. The decrease was primarily due to the decrease for information
technology of $1.3 million which was related to core conversion costs and a
decrease in REO impairment expense of $1.1 million in the same period in
2011.  

About the Company

Anchor Bancorp is headquartered in Lacey, Washington and is the parent company
of Anchor Bank, a community-based savings bank primarily serving Western
Washington through its 13 full-service banking offices (including three
Wal-Mart store locations) within Grays Harbor, Thurston, Lewis, Pierce and
Mason counties, Washington.   In addition we have one loan production office
located in Grays Harbor County. The Company's common stock is traded on the
NASDAQ Global Select Market under the symbol "ANCB" and is included in the
Russell 2000 Index. For more information, visit the Company's web site
www.anchornetbank.com.

Forward-Looking Statements:

Certain matters discussed in this press release may contain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements relate to, among other things,
expectations of the business environment in which we operate, projections of
future performance, perceived opportunities in the market, potential future
credit experience, and statements regarding our mission and vision. These
forward-looking statements are based upon current management expectations and
may, therefore, involve risks and uncertainties. Our actual results,
performance, or achievements may differ materially from those suggested,
expressed, or implied by forward-looking statements as a result of a wide
variety or range of factors including, but not limited to: the credit risks of
lending activities, including changes in the level and trend of loan
delinquencies and write-offs that may be impacted by deterioration in the
housing and commercial real estate markets and may lead to increased losses
and non-performing assets in our loan portfolio, and may result in our
allowance for loan losses not being adequate to cover actual losses, and
require us to materially increase our reserves; changes in general economic
conditions, either nationally or in our market areas; changes in the levels of
general interest rates, and the relative differences between short and long
term interest rates, deposit interest rates, our net interest margin and
funding sources; fluctuations in the demand for loans, the number of unsold
homes and other properties and fluctuations in real estate values in our
market areas; results of examinations of us by the Federal Reserve Bank of San
Francisco and our bank subsidiary by the Federal Deposit Insurance Corporation
("FDIC"), the Washington State Department of Financial Institutions, Division
of Banks ("Washington DFI") or other regulatory authorities, including the
possibility that any such regulatory authority may, among other things,
institute additional enforcement actions against the Company or the Bank, to
take additional corrective action and refrain from unsafe and unsound
practices, which may also require us to increase our reserve for loan losses,
write-down assets, change our regulatory capital position or affect our
ability to borrow funds or maintain or increase deposits, which could
adversely affect our liquidity and earnings; our compliance with regulatory
enforcement actions including; the requirements and restrictions that have
been imposed under the Supervisory Directive the Bank entered into with the
FDIC and the Washington DFI and the possibility that noncompliance by the Bank
could result in the imposition of additional requirements or restrictions; our
ability to attract and retain deposits; increases in premiums for deposit
insurance; our ability to control operating costs and expenses; the use of
estimates in determining fair value of certain of our assets, which estimates
may prove to be incorrect and result in significant declines in valuation;
difficulties in reducing risk associated with the loans on our balance sheet;
staffing fluctuations in response to product demand or the implementation of
corporate strategies that affect our work force and potential associated
charges; computer systems on which we depend could fail or experience a
security breach; our ability to retain key members of our senior management
team; costs and effects of litigation, including settlements and judgments;
our ability to manage loan delinquency rates; increased competitive pressures
among financial services companies; changes in consumer spending, borrowing
and savings habits; legislative or regulatory changes that adversely affect
our business including changes in regulatory policies and principles, or the
interpretations of regulatory capital or the other rules, including changes
related to the Basel III requirements, the impact of the effect of the
Dodd-Frank Wall Street Reform and Consumer Protection Act and the implementing
regulations, including the interpretation of regulatory capital or other
rules; the availability of resources to address changes in laws, rules, or
regulations or to respond to regulatory actions; adverse changes in the
securities markets; inability of key third-party providers to perform their
obligations to us; changes in accounting policies and practices, as may be
adopted by the financial institution regulatory agencies or the Financial
Accounting Standards Board, including additional guidance and interpretation
on accounting issues and details of the implementation of new accounting
methods; the economic impact of war or any terrorist activities; other
economic, competitive, governmental, regulatory, and technological factors
affecting our operations, pricing, products and services; and other risks
detailed in our Form 10-K and other reports filed with the Securities and
Exchange Commission. Any of the forward-looking statements that we make in
this Press Release and in the other public statements we make may turn out to
be wrong because of the inaccurate assumptions we might make, because of the
factors illustrated above or because of other factors that we cannot foresee.
Because of these and other uncertainties, our actual future results may be
materially different from those expressed or implied in any forward-looking
statements made by or on our behalf and the Company's operating and stock
price performance may be negatively affected. Therefore, these factors should
be considered in evaluating the forward-looking statements, and undue reliance
should not be placed on such statements. We undertake no responsibility to
update or revise any forward-looking statements.

ANCHOR BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL         December 31, 2012   June 30, 2012
CONDITION
(Dollars in thousands), (unaudited)
                                                                  
                                                                  
                                                                  
ASSETS                                                            
Cash and due from banks                      $ 74,258            $  78,673
Securities available for sale, at fair value 50,245              48,717
Securities held to maturity, at amortized    9,289               7,179
cost
Loans held for sale                          123                 312
Loans receivable, net of allowance for loan  285,734             287,755
losses of  $5,152 and $7,057
Life insurance investment, net of surrender  18,573              18,257
charges
Accrued interest receivable                  1,704               1,532
Real estate owned, net                       8,610               6,708
Federal Home Loan Bank (FHLB) of Seattle     6,394               6,510
stock, at cost
Property, premises and equipment, net        11,700              12,213
Deferred tax asset, net                      642                 555
Prepaid expenses and other assets            1,577               2,404
Total assets                                 $ 468,849           $ 470,815
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY                              
LIABILITIES                                                       
Deposits:                                                         
Noninterest-bearing                           $  38,504           $  37,941
Interest-bearing                             304,809             307,857
Total deposits                               343,313             345,798
FHLB advances                                64,900              64,900
Advance payments by borrowers for taxes and  865                 562
insurance
Supplemental Executive Retirement Plan       1,683               1,764
liability
Accounts payable and other liabilities       3,689               3,767
Total liabilities                            414,450             416,791
                                                                  
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value per share;   --                  --
authorized 5,000, 5,000,000 shares; no
shares issued or outstanding
Common stock, $.01 par value per share;
authorized 45,000,000 shares; 2,550,000
issued and 2,461,033 outstanding at December 25                  25
31, 2012 and 2,550,000 shares issued and
2,457,633 outstanding at June 30, 2012,
respectively
Additional paid-in capital                   23,211              23,202
Retained earnings, substantially restricted  32,248              31,746
Unearned employee stock ownership plan       (890)               (924)
shares
Accumulated other comprehensive income       (195)               (25)
(loss), net of tax
Total stockholders' equity                   54,399              54,024
Total liabilities and stockholders' equity   $ 468,849           $  470,815

                                                            
                                                            
ANCHOR BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF            Three Months Ended   Six Months Ended
OPERATIONS                           December 31,          December 31,
(Dollars in thousands, except per
share data) (unaudited)
                                     2012        2011      2012      2011
Interest income:                                                      
Loans receivable, including fees     $ 4,514     $ 5,181   $ 9,260   $ 10,428
Securities                           67          84        128       178
Mortgage-backed securities           470         487       944       949
Total interest income                5,051       5,752     10,332    11,555
Interest expense:                                                     
Deposits                             905         1,238     1,895     2,504
FHLB advances                        313         352       626       709
Total interest expense               1,218       1,590     2,521     3,213
Net interest income before provision 3,833       4,162     7,811     8,342
for loan losses
Provision for loan losses            225         475       525       1,000
Net interest income after provision  3,608       3,687     7,286     7,342
for loan losses
Noninterest income                                                    
Deposit service fees                 384         506       775       1,036
Other deposit fees                   195         206       384       423
Gain on sale of investments          --          686       --        879
 Loan fees                           215         257       399       485
Gain (loss) on sale of loans         238         (21)      415       (33)
Other income                         288         329       719       622
Total noninterest income             1,320       1,963     2,692     3,412
Noninterest expense                                                   
Compensation and benefits            2,113       2,067     4,248     4,196
General and administrative expenses  922         903       1,741     2,012
Real estate owned impairment         213         469       448       1,588
Real estate owned holding costs      106         198       292       455
Federal Deposit Insurance
Corporation (FDIC) insurance         162         252       325       503
premiums
Information technology               374         757       734       2,036
Occupancy and equipment              602         523       1,140     1,050
Deposit services                     166         120       355       227
Marketing                            129         172       256       324
Loss on sale of property, premises   --          159       --        107
and equipment
Gain on sale of real estate owned    (84)        (63)      (64)      (122)
Total noninterest expense            4,703       5,557     9,475     12,376
Income (loss) before provision for   225         93        503       (1,622)
income tax
Provision for income tax             --          --        --        --
Net income (loss)                    $ 225       $  93     $ 503     $ (1,622)
Basic earnings (loss) per share      $0.09       $0.04     $0.20     $(0.66)
Diluted earnings (loss) per share    $0.09       $0.04     $0.20     $(0.66)

                                                                      
                                                                      
                              As of or for the 
                               Quarter Ended
                              (unaudited)
                              December 31,  September 30,  June 30,  December
                              2012          2012           2012      31,
                                                                     2011
SELECTED PERFORMANCE RATIOS                                           
                                                                      
Return (loss) on average      0.19%         0.24%          (0.07)%   0.08%
assets ^(1)
Return (loss) on average      1.72%         2.12%          (0.58)%   0.67%
equity ^(2)
Average equity-to-average     11.24%        11.28%         11.35%    11.39%
assets ^(3)
Interest rate spread ^(4)     3.35%         3.48%          3.56%     3.49%
Net interest margin ^(5)      3.54%         3.68%          3.76%     3.69%
 Efficiency ratio ^(6)        91.3%         89.2%          79.7%     90.7%
 Average interest-earning
assets to average             116.8%        117.0%         115.8%    114.2%
interest-bearing liabilities 
 Other operating expenses as
a percent of average total    4.0%          4.1%           3.7%      4.6%
assets 
                                                                      
CAPITAL RATIOS (Anchor Bank)                                          
 Tier 1 leverage              11.4%         11.3%          10.9%     10.6%
 Tier 1 risk-based            16.8%         17.1%          17.0%     16.2%
 Total risk-based             18.1%         18.4%          18.2%     17.5%
                                                                      
ASSET QUALITY                                                         
 Nonaccrual and 90 days or
more past due loans as a      3.1%          2.9%           3.0%      4.1%
percent of total loans
 Allowance for loan losses as 1.8%          2.3%           2.4%      2.1%
a percent of total loans 
 Allowance as a percent of    56.6%         78.4%          80.9%     50.2%
total non-performing loans
 Non-performing assets as a   3.6%          3.0%           3.3%      4.3%
percent of total assets 
 Net charge-offs to average   0.6%          0.2%           0.1%      0.4%
outstanding loans
                                                                      
(1)  Net income (loss) divided by average total assets.
(2)  Net income (loss) divided by average equity.
(3)  Average equity divided by average total assets.
(4)  Difference between weighted average yield on interest-earning assets and
weighted average rate on interest-bearing liabilities.
(5)  Net interest income as a percentage of average interest-earning assets.
(6)  Noninterest expense divided by the sum of net interest income and
noninterest income.

CONTACT: Jerald L. Shaw, President
         Terri L. Degner, EVP and Chief Financial Officer
         Anchor Bancorp
         (360) 491-2250