Monarch Community Bancorp (MCBF) in Coldwater, Mich., plans to raise $16.5 million through a private placement.
The $197 million-asset company has hired two investment banks to lead the placement, Monarch said Tuesday. The offering is contingent on Monarch's completing a transaction with the Treasury Department to retire the $8.2 million of preferred stock it issued through the Troubled Asset Relief Program at a discounted price of $4.5 million.
Monarch has also filed with regulators to conduct a one-for-five reverse stock split, effective May 28. The exchange would reduce outstanding shares to 409,897.
"We are hopeful that we will reach agreement with the U.S. Treasury to retire the CPP preferred stock," Richard DeVries, Monarch's president and chief executive, said in a press release. "Our goal is to not only retire our obligation to the U.S. Treasury, but to also satisfy the capital requirements" of a May 2010 consent order between Monarch Community Bank and the Federal Deposit Insurance Corp.
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