Anchor BanCorp, parent of AnchorBank, was to pay off a $116.3 million loan plus $60.2 million in unpaid interest to a group led by U.S. Bank by June 30. The loan had been extended several times, until now. The Federal Reserve System did not allow another extension, citing the Madison-based bank’s inability to service its debt, and Anchor BanCorp defaulted.
Reportedly, the Fed’s decision will have no impact on bank operations, and according to a report from The Business Journal, AnchorBank and Anchor BanCorp are compliant with all federal orders except for the ability to raise additional capital.
Its Tier 1 capital ratio was 7.08 at the end of fiscal 2012, which is considered adequately capitalized but below the 8% required by the federal consent order.
