MUSKEGON — Backed with a $5 million capital injection, Community Shores Bank Corp. has emerged from an era of increased regulatory oversight.
The FDIC and the Michigan Department of Financial Services on Dec. 16 terminated a September 2010 consent order that required the Muskegon-based community bank to meet certain capital requirements.
Termination of the order came after a successful private stock placement and rights offering.
“We are very pleased to have the overall health of Community Shores Bank acknowledged by this action,” Community Shores Chairman Gary Bogner said in a statement. “This is a true milestone that could not have been achieved without the continuous support and encouragement of our loyal customers and shareholders and we are thankful for their business and patronage.”
The corporation will use the proceeds from the capital raise to repay the overdue and deferred interest on its trust preferred securities, and to make a capital contribution to Community Shores Bank of about $3.7 million. The remaining funds will go for “general working capital purposes.”
“Through the support of shareholder subscriptions, backstop participants, private placements and the conversion of senior debt to shares, the company will return to full health upon closing of the offerings and will be able to act as a future source of strength to Community Shores Bank,” CEO Heather Brolick said in a statement.
Community Shores, with total assets of about $182 million, has three offices in Muskegon County and one in Grand Haven in neighboring Ottawa County.
Some shareholders who purchased additional share under the rights offering will see their holding in the corporation exceed regulatory thresholds. The corporation is seeking approval from the Federal Reserve Board for those shareholders to have increased ownership of common stock and expects to close the rights offering by March 8.