Sept. 28--The reorganization and recapitalization of Madison-based Anchor BanCorp Wisconsin is complete.
The company said Friday its measures, which includes a
$175 million recapitalization, have been approved by the Federal Reserve System and that the bank's capital levels now exceed the thresholds for a "well capitalized" bank.
The announcement came following the Aug. 30 approval by bankruptcy Judge Robert Martin in U.S. District Court in Madison and ends a four-year process for the company, which was founded in 1919 and has 55 offices and 700 employees, all of them in Wisconsin.
"We're proud that the recapitalization effort is now complete, positioning AnchorBank for a full return to profitability and growth," said Chris Bauer, AnchorBank's president and CEO, who came out of retirement in 2009 to lead the effort and recruit a new senior management team.
Under terms of the arrangement, Anchor BanCorp, parent of AnchorBank, will pay $49 million to settle $183 million in principal and interest owed to U.S. Bank, Bank of America and Associated Bank from a 2008 loan. It also gives the U.S. Treasury about
$6 million in stock in the reorganized company to pay off
$139 million owed from funds received in 2009 through TARP, the federal Troubled Asset Relief Program.
Some of the company's nearly 8,000 shareholders had objected to the Chapter 11 settlement and at last month's hearing argued that former Anchor executives should not be permitted to invest in the reorganized bank if shareholders lose their investment.
Investors pledged $175 million to Anchor BanCorp to wipe out the bank company's big debts and boost its capitalization. Anchor had been under orders from federal regulators to shape up its finances since June 2009.
Bauer said last month that when the reorganization is complete, $110 million would be invested in the bank, doubling its capitalization, and some 70 employees would be added over the next two years.
"We are excited about the many opportunities this recapitalization will represent for AnchorBank, its customers, its employees, and the communities we serve," Bauer said in a statement.