Foundations Bank said Tuesday it has commitments from shareholders for more than $5 million of new capital, money it says puts the bank in position to grow again.
Pewaukee-based Foundations, which was founded in 2005 and underwent a management shakeup in 2011, hasn't had a profitable year since 2008, but greatly narrowed its loss in 2012
The bank and the board of its parent company, Generations Bancorp Inc., said Tuesday the infusion of capital will give it new opportunities and help it comply with a special consent order from regulators aimed at strengthening the bank.
"This investment will put our capital ratios beyond those required by the consent order and will allow us to continue the significant progress we have made in improving the bank's overall financial condition," John Hazod, interim president, said in a press statement announcing the capital raise. "We are excited about the opportunities that we see in our market and look forward to building upon the momentum that we have established in the past year."
The proceeds of the stock offering will be primarily used for an equity injection into the bank. The company will complete the offering in May, with the goal of reaching the maximum of $7.5 million.
"There is a growing need for a strong, local bank in the Lake Country and Waukesha County markets and we are excited about our ability to deliver superior services to the businesses and neighborhoods in those areas," Hazod said. "Our capital raise efforts will allow us to make additional investments so we can continue to deliver exceptional service, expertise and commitment to our community."
Foundations Bank's assets have shrunk over the past three years as the bank worked through loan losses. The bank lost $9.4 million in 2011, but narrowed its loss to $198,000 in 2012, records from the Federal Deposit Insurance Corp. show. Since 2009, its assets have decreased to $127 million from about $233 million.
Foundations Bank was started in 2005 by the husband-and-wife team of Greg and Heidi Kolton, who became known in the area for their radio ads talking about the bank. But two years ago, as losses mounted at the bank, the Koltons resigned from their positions as top executives.
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