Grand Bankshares in West Palm Beach, Fla., plans to raise $6 million, according to a news report.
The $256 million-asset parent of Grand Bank & Trust said recently it hopes to obtain the capital by March 31, the South Florida Business Journal reported on Monday, citing a letter that Grand Bankshares sent shareholders.
The company aims to raise the money from existing shareholders and avoid a change in control that could jeopardize a $13 million tax benefit that would lessen taxes on future profits, the publication reported.
A Grand Bank & Trust executive did not respond immediately to a request for comment.
The capital raise comes as Grand Bank & Trust continues to take steps to boost capital.
A November 2010 agreement with the Federal Deposit Insurance Corp. obligates Grand Bank & Trust to attain a Tier 1 leverage ratio of at least 8% and a total risk-based capital of at least 12%, and to shrink its portfolio of problem loans.
It had a Tier 1 leverage ratio of 6.3% and a total risk-based capital ratio of 9.8% as of yearend, according to the FDIC.
The Federal Reserve in May ordered Grand Bankshares to serve as a source of strength for its struggling subsidiary and to refrain from paying dividends or incurring or redeeming debt without the approval of regulators. Grand Bank & Trust earned $515,000 last year after selling off four of its six branches.