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ANCHOR BANCORP ANNOUNCES SIGNING OF AGREEMENT TO REPURCHASE ITS PREFERRED STOCK FROM THE FDIC

 HEWLETT, N.Y., June 25 /PRNewswire/ -- Anchor Bancorp, Inc. (NASDAQ: ABKR), parent company of Anchor Savings Bank FSB, reported today that the Federal Deposit Insurance Corporation ("FDIC"), as manager of the FSLIC Resolution Fund ("FRF"), has entered into an agreement with Anchor Bancorp which provides for the repurchase by Anchor of $157.0 million of its Class A cumulative preferred stock that is currently outstanding and held by the FRF and the elimination of all accumulated but undeclared and unpaid dividends which amounted to $44.6 million at March 31, 1993. Anchor had previously announced that it had executed a letter of intent with the FDIC regarding this transaction.
 James M. Large, Jr., chairman and chief executive officer, stated that in the exchange, Anchor will issue to the FDIC $71.0 million in senior notes which will be due in ten years and which will bear a fixed, market rate of interest to be determined by Anchor, the FDIC, and their respective financial advisors pursuant to a method prescribed in the agreement. In addition, Anchor will issue to the FDIC ten-year warrants on between 4,500,000 and 4,750,000 shares of its common stock at an exercise price of $.01 per share. The FDIC will have the right to sell the common stock to be acquired upon exercise of the warrants, but only in a widely dispersed public offering or in a business combination expressly approved by Anchor. In connection with the issuance of the senior notes, certain restrictions are imposed upon Anchor, including a limit on the ability of Anchor (but not Anchor Savings) to incur indebtedness and a limit, based primarily on Anchor's earnings after the exchange with the FDIC, on the amount of dividends which Anchor can pay, should Anchor's board in the future elect to do so. Anchor has no intention to pay dividends in the near term. The transaction is contingent upon Anchor Bancorp successfully raising $50 million in new equity by July 31, 1993, which is to be downstreamed into Anchor Savings Bank as additional capital.
 -0- 6/25/93
 /CONTACT: Thomas K. Hernly of Anchor Bancorp, 516-596-3902/
 (ABKR)


CO: Anchor Bancorp, Inc. ST: New York IN: FIN SU:

GK -- NY047 -- 5870 06/25/93 16:44 EDT
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Publication:PR Newswire
Date:Jun 25, 1993
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