EvergreenBancorp expects to fully recover the $1.4 million in the first quarter of 2008 when Visa goes public. EvergreenBancorp currently owns 0.05% of Visa, which has recently filed its registration statement with the Securities and Exchange Commission to go public through an initial public offering.
EvergreenBancorp has obtained its ownership of Visa shares, and resulting proportionate share of the Visa settlement, through a business line that it discontinued in 2003. Between 1993 and 2003, EvergreenBank was the issuing bank for Visa cards for approximately 1,000 financial institutions.
As a result of recent guidance from the Securities and Exchange Commission accounting staff, EvergreenBancorp and other similarly situated banks are required to recognize the fair value of a contingent obligation for the potential losses arising from this litigation. EvergreenBancorp will record a charge for its proportionate share of Visa’s settlement with American Express and Discover Financial Services. It is expected that EvergreenBancorp’s proportionate share of gains that will be recognized upon completion of Visa’s offering will more than exceed the aggregate amount of the announced $1.4 million charge.
