Losses at Anchor BanCorp Wisconsin (ABCW) in Madison narrowed slightly last quarter as its credit quality improved.
Debt burdens and a shrinking asset base contributed to a $15.1 million loss, the company said Friday in reporting its fiscal third quarter ended Dec. 31. That was a slight improvement from a $15.3 million loss a year earlier.
Anchor's assets shrunk by 13.5%, to $2.4 billion, from the end of 2011. But its Tier 1 leverage ratio rose to 4.84%, from 4.11%, and its total risk-based capital reached 9.33%, from 8.07%.
Its provision for loan losses fell by 44%, to $4.7 million, and its chargeoffs fell by 26%, to $11.8 million. Total nonperforming loans were 44% lower, at $146 million.
Net interest income declined 5%, to $15.2 million. But its net interest margin improved by 24 basis points, to 2.42%.
Noninterest income was $11.8 million, 10% percent higher thanks mainly to improved revenue from loan sales and servicing income. Noninterest expense rose 12.4%, to $34 million, primarily because of the $3.5 million penalty Anchor incurred on its prepayment of $150 million in Federal Home Loan bank advances.
"Despite lower asset totals again this quarter, we are continuing to make progress on implementing strategies to increase bank profitability by slowing asset runoff to improve our net interest margin," Chief Executive Chris Bauer said in a press release.
This year Anchor plans to do more consumer lending and rebuild its commercial banking business, Bauer told American Banker in December.