Anchor Bancorp Reports Third Quarter Fiscal 2013 Earnings

Anchor Bancorp Reports Third Quarter Fiscal 2013 Earnings

LACEY, Wash., April 26, 2013 (GLOBE NEWSWIRE) -- Anchor Bancorp (Nasdaq:ANCB)
("Company"), the holding company for Anchor Bank ("Bank"), today reported
third quarter earnings for the fiscal year ending June 30, 2013. For the
quarter ended March 31, 2013, the Company reported net income of $55,000 or
$0.02 per diluted share, compared to a net income of $223,000 or $0.09 per
diluted share for the same period last year. For the nine months ended March
31, 2013, the Company reported net income of $558,000 or $0.23 diluted share,
compared to a net loss of $1.4 million or $0.57 diluted share for the same
period last year.

"Our year-over-year earnings improved as a result of the continued improvement
in our credit quality. Non-performing loans decreased $1.7 million from June
30, 2012 to March 31, 2013. Our total noninterest expense decreased $466,000
as compared to the quarter ended March 31, 2012 and decreased $3.4 million as
compared to the nine months ended March 31, 2012. These decreases were due to
our ongoing commitment to improve our asset quality as we significantly
reduced real estate owned related expenses by aggressively disposing of
properties as the real estate market stabilizes. We also benefitted from a
reduction in technology expenses as a result of our new core processing
system. During the quarter we closed a Wal-Mart branch, located in Chehalis,
Washington, which resulted in a one-time charge of $97,000. We will continue
to provide services to the Chehalis customers through our Centralia branch,"
stated Jerald L. Shaw, President and Chief Executive Officer.

Fiscal Third Quarter Highlights

  *Total classified loans decreased $2.4 million or 7.3% to $30.4 million at
    March 31, 2013 from $32.8 million at June 30, 2012;
  *Net interest margin increased 25 basis points to 3.72% for the quarter
    ended March 31, 2013 from 3.47% for the quarter ended March 31, 2012;
  *Total non-performing loans decreased by $1.7 million or 19.4% to $7.0
    million at March 31, 2013 from $8.7 million at June 30, 2012; and
  *Provision for loan losses declined to $225,000 for the quarter ended March
    31, 2013 compared to $300,000 for the quarter ended March 31, 2012.

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 decreased $100,000 to $14.1
million at March 31, 2013 from $14.2 million at June 30, 2012. The ratio of
non-performing loans, which includes non-accrual loans and loans which are 90
days or more past due, to total loans decreased to 2.4% at March 31, 2013 from
3.0% at June 30, 2012. The Company recorded a $225,000 provision for loan
losses for the current quarter compared to $300,000 for the quarter ended
March 31, 2012 reflecting the improvement in our asset quality. The allowance
for loan losses of $5.3 million at March 31, 2013 represented 1.8% of loans
receivable and 75.6% of non-performing loans.

Non-performing loans decreased by $1.7 million to $7.0 million at March 31,
2013 from $8.7 million at June 30, 2012 and decreased from $11.0 million at
March 31, 2012. Non-performing loans consisted of the following at the dates
indicated:

                   March31, 2013 June30, 2012 March 31, 2012
                   (In thousands)
Real estate:                                   
One-to-four family  $ 4,743        $ 1,878       $ 2,654
Commercial          —              —             4,075
Construction        —              3,369         3,369
Land                788            109           66
Total real estate   5,531          5,356         10,164
Consumer:                                      
Home equity         241            159           293
Automobile          51             66            93
Credit cards        —              16            17
Other               —              1             7
Total consumer      292            242           410
Business:                                      
Commercial business 1,207          3,124         454
Total               $ 7,030        $ 8,722       $ 11,028
                                              

We continue to actively restructure our delinquent one-to-four family loans
when feasible so our borrowers can continue to make payments while minimizing
the Company's potential loss. As of March 31, 2013, June 30, 2012, and March
31, 2012 there were 42, 30, and 30 loans, respectively, with aggregate net
principal balances of $16.4 million, $15.1 million, and $15.3 million,
respectively, that we have identified as "troubled debt restructures." At
March 31, 2013, June 30, 2012, and March 31, 2012 there were $4.3 million,
$1.2 million, and $1.4 million, respectively, of "troubled debt restructures"
included in the non-performing loans above.

As of March 31, 2013, the Company had 31 properties in real estate owned
("REO") with an aggregate book value of $7.0 million compared to 71 properties
with an aggregate book value of $6.7 million at June 30, 2012, and 59
properties in REO with an aggregate book value of $8.4 million at March 31,
2012. The decrease in number of properties during the nine months ended March
31, 2013 was primarily attributable to ongoing sales of residential
properties.During the quarter ended March 31, 2013, the Company sold seven
residential building lots located in Washington state, four residential real
estate properties located in Washington state and one in Oregon for an
aggregate gain of $9,000.The largest of the foreclosed properties at March
31, 2013 had an aggregate book value of $3.4 million and consisted of a
commercial real estate loan located in Pierce County, Washington.At March 31,
2013, the Company owned 11 one-to-four family residential properties with an
aggregate book value of $2.0 million, 13 residential building lots with an
aggregate book value of $332,000, one vacant land parcel with a book value of
$10,000, and six parcels of commercial real estate with an aggregate book
value of $4.6 million. Our REO is located in Pierce County, southwest
Washington and the greater Portland area of northwest Oregon, with 26 of the
parcels in Washington and the remaining five in Oregon.

Capital

As of March 31, 2013, 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%, 16.9% and 18.2%, respectively. As of June
30, 2012, these ratios were 10.9%, 17.0%, and 18.2%, 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%, 17.4%, and 18.7% as of March 31, 2013. As of June 30, 2012,
these ratios were 11.3%, 17.5% and 18.8%, respectively.

Balance Sheet Review

Total assets decreased by $9.4 million, or 2.0%, to $461.4 million at March
31, 2013 from $470.8 million at June 30, 2012.Cash and due from banks
decreased $14.9 million or 19.0%, loans receivable decreased $3.6 million, or
1.2% since June 30, 2012. Securities available-for-sale and held-to-maturity
increased $5.9 million, or 12.1% and $4.0 million, or 56.3% respectively, as
we reinvested excess liquidity into securities yielding a higher rate than
obtained from our cash deposits in other banks.

Mortgage-backed securities available-for-sale increased $6.1 million, or
12.9%, to $53.1 million at March 31, 2013 from $47.1 million at June 30, 2012.
The increase in this portfolio was primarily the result of purchases of 13
mortgage-backed securities totaling $19.6 million and contractual principal
repayments of $12.7 million.

Loans receivable, net, decreased $3.6 million or 1.2% to $284.2 million at
March 31, 2013 from $287.8 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 $13.9 million or 14.3% to
$111.2 million from $97.3 million at June 30, 2012 and one-to-four family
loans decreased $7.1 million or 8.6% to $75.6 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 $9.5 million at
March 31, 2013 compared to $13.8 million at June 30, 2012.Consumer loans
decreased $6.7 million or 15.6% to $36.3 million from June 30, 2012 as
consumers continue to reduce debt and demand for consumer loans has been
modest during the current economic uncertainty.

Loans receivable consisted of the following at the dates indicated:

                                                    
                         March31, 2013 June30, 2012 March 31, 2012
                         (In thousands)
Real Estate:                                         
One-to-four family        $ 75,620       $ 82,709      $ 86,861
Multi-family              40,076         42,032        43,705
Commercial                111,246        97,306        96,173
Construction              4,487          6,696         6,979
Land loans                5,028          7,062         6,579
Total real estate         236,457        235,805       240,297
                                                    
Consumer:                                            
Home equity               26,869         31,504        33,299
Credit cards              4,769          5,180         5,211
Automobile                2,084          3,342         3,779
Other consumer            2,569          2,968         2,863
Total consumer            36,291         42,994        45,152
                                                    
Business:                                            
Commercial business       17,659         16,618        16,629
                                                    
Total Loans               290,407        295,417       302,078
                                                    
Less:                                                
Deferred loan fees        918            605           572
Allowance for loan losses 5,315          7,057         5,803
Loans receivable, net     $ 284,174      $ 287,755     $ 295,703
                                                    

Total liabilities decreased $9.6 million between June 30, 2012 and March 31,
2013, primarily as the result of a $9.8 million or 2.8% decrease in
deposits.Our core deposits, which consist of all deposits other than
certificates of deposit increased by $9.5 million or 5.4% to $184.1 million
from $174.6 million at June 30, 2012.

Deposits consisted of the following at the dates indicated:

                        March31, 2013    June30, 2012     March 31, 2012
                        Amount    Percent Amount    Percent Amount    Percent
                        (Dollars in thousands)
Noninterest-bearing      $ 40,020  11.9%   $ 37,941  11.0%   $ 33,939  9.7%
demand deposits
Interest-bearing demand  19,717    5.9%    16,434    4.8%    19,980    5.7%
deposits
Savings deposits         38,174    11.4%   36,475    10.5%   36,889    10.5%
Money market accounts    86,166    25.6%   83,750    24.2%   83,364    23.7%
Certificates of deposit  151,894   45.2%   171,198   49.5%   177,384   50.4%
Total deposits           $ 335,971 100.0%  $ 345,798 100.0%  $ 351,556 100.0%
                                                                 

FHLB advances remained unchanged at $64.9 million at both March 31, 2013 and
June 30, 2012.

Total stockholders' equity increased $241,000 or 0.45% to $54.3 million at
March 31, 2013 from $54.0 million at June 30, 2012. The increase was primarily
due to the $558,000 in net income during the nine months ended March 31, 2013
partially offset by an increase in accumulated other comprehensive loss of
$384,000 related to our unrealized losses on securities
available-for-sale.Accumulated other comprehensive loss was $409,000 at March
31, 2013 as compared to an accumulated other comprehensive loss of $25,000 at
June 30, 2012.

Operating Results

Anchor Bancorp had net income of $55,000 or $0.02 per diluted share, for the
three months ended March 31, 2013 compared tonet income of $223,000 or $0.09
per diluted share for the same period in 2012. For the nine months ended March
31, 2013, net income was $558,000 or $0.23 per diluted share compared to a net
loss of $1.4 million or $0.57 per diluted share for the comparable period in
2012.

Net interest income. Net interest income before the provision for loan losses
increased $67,000, or 1.7%, to $4.0 million for the quarter ended March 31,
2013 from $3.9 million for the quarter ended March 31, 2012.For the nine
months ended March 31, 2013, net interest income before the provision for loan
losses decreased $464,000 or 3.8% to $11.8 million from $12.3 million for the
same period in 2012.

The Company's net interest margin increased 25 basis points to 3.72% for the
quarter ended March 31, 2013 from 3.47% for the comparable period in 2012 as
the cost of our liabilities continued to decline, primarily due to the renewal
of certificates of deposit at currently low interest rates and the reduction
in the balance of these higher costing deposits. The average yield on
interest-earning assets remained unchanged at 4.79% for both the quarters
ended March 31, 2013 and 2012.The average cost of interest-bearing
liabilities decreased 27 basis points to 1.25% for the quarter ended March 31,
2013 compared to 1.52% for the same period in the prior year. For the nine
months ended March 31, 2013, the Company's net interest margin increased two
basis points to 3.63% compared to 3.61% for the same period in 2012.The
average yield on interest-earning assets decreased 24 basis points to 4.76%
for the nine months ended March 31, 2013 compared to 5.00% for the same period
in the prior year. The average cost of interest-bearing liabilities decreased
27 basis points to 1.33% for the nine months ended March 31, 2013 compared to
1.60% for the same period of the prior year.

Provision for loan losses. In connection with its analysis of the loan
portfolio at March 31, 2013, management determined that a provision for loan
losses of $225,000 was required for the quarter ended March 31, 2013 compared
to a provision for loan losses of $300,000 for the same period of the prior
year.The provision for loan losses decreased by $550,000 to $750,000 for the
nine months ended March 31, 2013 from $1.3 million for the same period last
year, reflecting the decline in the amount of our non-performing loans during
this nine month period.

Noninterest income. Noninterest income decreased $776,000, or 41.7%, to $1.1
million for the quarter ended March 31, 2013 compared to $1.9 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 March 31, 2013 as compared to $609,000 for quarter ended
March 31, 2012, loan fees declined $114,000 and deposit service fees declined
$105,000 for the quarter ended March 31, 2013 compared to the same quarter in
the prior year.These decreases were partially offset by an increase of
$80,000 for other deposit fees for the quarter ended March 31,
2013.Noninterest income decreased $1.5 million or 28.4% to $3.8 million
during the nine months ended March 31, 2013 compared to $5.3 million for the
same period in 2012.The decrease was primarily due to no gain on sales of
investments compared to $1.5 million for the same period in prior year and a
$365,000 decline in deposit service fees partially offset by a $412,000
increase in gain on sales of loans.The increase in the gain on sale of loans
was the result of a $20.2 million of loans sold into the secondary market
during the nine months ended March 31, 2013 compared to $13.1 million during
the same period last year, which was attributable to increased demand for
one-to-four family loans as a result of refinancing activity.

Noninterest expense. Noninterest expense decreased $466,000, or 8.9%, to $4.8
million for the three months ended March 31, 2013 from $5.3 million for the
three months ended March 31, 2012. The decrease was primarily due to expenses
related to information technology decreasing $256,000 or 40.0% to $384,000
from $640,000 and to a decline in REO related expenses.Real estate owned
holding costs expense decreased $106,000 or 45.5% to $127,000 from $233,000
during the quarterended March 31, 2013 compared to March 31, 2012, reflecting
the decrease in our foreclosed properties.Due to the closure of one Wal-Mart
branch in January 2013, there was an aggregate increase of $97,000 in
compensation, loss on sale of premises and equipment, and occupancy and
equipment expenses. Noninterest expense decreased $3.4 million in the nine
months ended March 31, 2013 to $14.3 million from $17.6 million for the nine
months ended March 31, 2012.The decrease was primarily due to the decrease in
information technology expenses of $1.6 million which was related to costs
incurred for last year's core system conversion and a decrease in REO
impairment expense of $1.1 million as compared to the same period in 2012,
reflecting both the decline in foreclosed properties and the stabilization in
the real estate market.

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 12 full-service banking offices (including two 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 imposedunder 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 CONDITION
(Dollars in thousands), (unaudited)               March31, 2013 June30, 2012
                                                               
ASSETS                                                          
Cash and due from banks                           $ 63,740       $ 78,673
Securities available-for-sale, at fair value      54,610         48,717
Securities held-to-maturity, at amortized cost    11,221         7,179
Loans held for sale                               64             312
Loans receivable, net of allowance for loan       284,174        287,755
losses of$5,315 and $7,057
Life insurance investment, net of surrender       18,730         18,257
charges
Accrued interest receivable                       1,967          1,532
Real estate owned, net                            6,987          6,708
Federal Home Loan Bank(FHLB) stock, at cost      6,336          6,510
Property, premises and equipment, net             11,511         12,213
Deferred tax asset, net                           752            555
Prepaid expenses and other assets                 1,345          2,404
Total assets                                      $ 461,437      $ 470,815
LIABILITIES AND STOCKHOLDERS' EQUITY                            
                                                               
LIABILITIES                                                     
Deposits:                                                       
Noninterest-bearing                               $ 40,020       $ 37,941
Interest-bearing                                  295,951        307,857
Total deposits                                    335,971        345,798
                                                               
FHLB advances                                     64,900         64,900
Advance payments by borrowers for taxes and       1,414          562
insurance
Supplemental Executive Retirement Plan liability  1,642          1,764
Accounts payable and other liabilities            3,245          3,767
Total liabilities                                 407,172        416,791
                                                               
STOCKHOLDERS' EQUITY                                            
Preferred stock, $.01 par value per share
authorized 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 2,462,733 outstanding at March 31, 2013 and   25             25
2,550,000 shares issued and 2,457,633 outstanding
at June 30, 2012, respectively
Additional paid-in capital                        23,218         23,202
Retained earnings, substantially restricted       32,304         31,746
Unearned Employee Stock Ownership Plan (ESOP)     (873)          (924)
shares
Accumulated other comprehensive loss, net of tax  (409)          (25)
Total stockholders' equity                        54,265         54,024
Total liabilities and stockholders' equity        $ 461,437      $ 470,815
                                                               

                                                                 

ANCHOR BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share  Three Months Ended Nine Months Ended
data)
(unaudited)                              March 31,          March 31,
                                        2013      2012     2013     2012
Interest income:                                                  
Loans receivable, including fees         $ 4,674   $ 4,838  $ 13,933 $ 15,265
Securities                               55        66       184      245
Mortgage-backed securities               403       509      1,347    1,459
Total interest income                    5,132     5,413    15,464   16,969
Interest expense:                                                 
Deposits                                 838       1,145    2,734    3,650
FHLB advances                            307       348      932      1,057
Total interest expense                   1,145     1,493    3,666    4,707
Net interest income before provision for 3,987     3,920    11,798   12,262
loan losses
Provision for loan losses                225       300      750      1,300
Net interest income after provision for  3,762     3,620    11,048   10,962
loan losses
Noninterest income                                                
Deposit service fees                     338       443      1,114    1,479
Other deposit fees                       282       202      665      626
Gain on sale of investments              —         609      —        1,487
Loans fees                               146       260      545      745
Gain on sale of loans                    19        55       434      22
Other income                             301       293      1,020    915
Total noninterest income                 1,086     1,862    3,778    5,274
Noninterest expense                                               
Compensation and benefits                2,154     2,075    6,402    6,270
General and administrative expenses      741       870      2,482    2,882
Real estate owned impairment             353       287      802      1,875
Real estate owned holding costs          127       233      419      688
Federal Deposit Insurance Corporation    162       254      487      757
(FDIC) insurance premiums
Information technology                   384       640      1,118    2,676
Occupancy and equipment                  554       503      1,694    1,553
Deposit services                         144       277      498      504
Marketing                                149       177      405      501
Loss on sale of property, premises and   34        —        34       107
equipment
Gain on sale of real estate owned        (9)       (57)     (73)     (179)
Total noninterest expense                4,793     5,259    14,268   17,634
Income (loss) before provision for       55        223      558      (1,398)
income taxes
Provision for income taxes               —         —        —        —
Net income (loss)                        $ 55      $ 223    $ 558    $ (1,398)
Basic earnings (loss) per share          $ 0.02    $ 0.09   $ 0.23   $ (0.57)
Diluted earnings (loss) per share        $ 0.02    $ 0.09   $ 0.23   $ (0.57)
                                                                 

                                                                 
                                  As of or for the
                                  Quarter Ended
                                  (unaudited)
                                  March 31,  December 31,          March 31,
                                  2013       2012         June 30, 2012
                                                            2012
                                  (Dollars in thousands)
SELECTED PERFORMANCE RATIOS                                       
Return (loss) on average assets    0.05%      0.19%         (0.07)%  0.18%
^(1)
Return (loss) on average equity    0.42%      1.72%         (0.58)%  1.63%
^(2)
Average equity-to-average assets   11.21%     11.24%        11.35%   11.28%
^(3)
Interest rate spread^(4)           3.54%      3.35%         3.56%    3.27%
Net interest margin ^(5)           3.72%      3.54%         3.76%    3.47%
Efficiency ratio ^(6)              94.5%      91.3%         79.7%    91.0%
Average interest-earning assets to
average interest-bearing           117.2%     116.8%        115.8%   115.1%
liabilities
Other operating expenses as a      4.1%       4.0%          3.7%     4.3%
percent of average total assets
                                                                 
CAPITAL RATIOS (Anchor Bank)                                      
                                                                 
Tier 1 leverage                    11.4%      11.4%         10.9%    10.8%
Tier 1 risk-based                  16.9%      16.8%         17.0%    16.7%
Total risk-based                   18.2%      18.1%         18.2%    18.0%
                                                                 
ASSET QUALITY                                                     
Non-accrual and 90 days or more
past due loans as a percent of     2.4%       3.1%          3.0%     3.7%
total loans
Allowance for loan losses as a     1.8%       1.8%          2.4%     1.9%
percent of total loans
Allowance as a percent of total    75.6%      56.6%         80.9%    52.6%
non-performing loans
Non-performing assets as a percent 3.0%       3.6%          3.3%     3.9%
of total assets
Net charge-offs to average         0.02%      0.6%          0.1%     0.3%
outstanding loans
Classified loans                   $ 30,410   $ 25,408      $ 32,787 $ 40,964
_____________________                                             
                                                                 
(1)Net income (loss) divided by average total assets, annualized.
(2)Net income (loss) divided by average equity, annualized.
(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
 
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