Anchor BanCorp Wisconsin, Inc. (ABCW) Monday announced issuing over 100 thousands of its preferred shares, together with a warrant, to the Treasury in lieu of a capital infusion. The Bank added its Board voted to suspend regular quarterly dividends, and that it expects a non-cash goodwill impairment charge at the end of the third quarter.
Madison, Wisconsin-based Anchor BanCorp noted that, as part the U.S. Treasury Department's Capital Purchase Program, the company issued 110,000 shares of its Series B senior preferred stock to the department for a cash injection of $110 million. The bank has also issued a warrant, enabling the department to purchase up to 7.4 million shares of its common stock at an exercise price of $2.23 a share, it added.
The bank further stated that Douglas Timmerman, president and chief executive officer, has said that the bank will downstream the proceeds to its wholly-owned subsidiary, AnchorBank, fsb, where it would be used to make additional funds available for residential and consumer lending and to strengthen its capital position. AnchorBank unit has 74 full service offices and two loan origination only offices, all located in Wisconsin.
In addition, the bank announced that that its Board of Directors has voted to suspend regular quarterly dividends on its common stock, citing the critical need to preserve capital amid the current economic climate. The bank expects this action to help in preserving its strong capital and liquidity positions. ABCW also noted that it has instituted hiring and salary freezes and will further consider cost cutting initiatives to assist the company to further reduce expenses and preserve capital.
The bank also announced it would take $72.2 million non-cash charge, resulting from a goodwill impairment testing at the end of its third quarter, which indicated that the estimated fair value of its bank reporting unit came less than its book value. The bank added that the charge has no impact on its regulatory capital ratios and it would remain well-capitalized with no effect on its overall liquidity position.
Early in November, ABCW had reported a second-quarter net loss of $23.3 million or $1.11 per share, compared to a net income of $9.27 million or $0.44 per share in the same quarter of last year.
ABCW closed Friday's regular trading on NMS at $2.02, down $0.08, or 3.81%, with a volume of 134,095 shares.
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