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Anchor BanCorp Wisconsin Announces Prepayment of $150 Million of FHLB Advances


Dec 27 - Anchor BanCorp Wisconsin Inc. (OTC Market:ABCW), the holding company for AnchorBank, fsb., has completed the prepayment of $150 million of Federal Home Loan Bank advances. The borrowings extinguished were floating-rate advances with maturities in 2015 and had a current weighted average rate of 1.41 percent. The repayment of the FHLB advances triggered a pre-payment penalty of $3.5 million.

Chris Bauer, president and CEO of the corporation and the bank, said: "As stated in our second quarter 2012 earnings release, we have been implementing strategies to increase bank profitability. Given the economic environment, using excess cash at the bank level to reduce total funding cost is an opportunity to enhance the bank's profitability by increasing net interest margin going forward. Even though the bank's cash position has been reduced by $150 million, the bank's balance sheet remains strong as we continue to maintain a high degree of liquidity."

Results of the Transaction

While the pre-payment of FHLB advances will increase the Tier 1 leverage ratio at the bank, the corporation, as the holding company of the bank, continues to be burdened with significant senior debt and preferred stock obligations:

The corporation continues to work with Sandler O'Neill & Partners, L.P. as its financial adviser in efforts to address its capital needs.

About Anchor BanCorp Wisconsin Inc.
Anchor BanCorp Wisconsin Inc.'s stock is traded in the over-the-counter market under the symbol ABCW. The bank has 55 offices located in Wisconsin.