Johnson Financial Group Inc. in Racine, Wis., has received a $235 million investment from members of the controlling Johnson family, to recapitalize its struggling Johnson Bank.
The funds will allow the company to remain privately owned, according to a Tuesday press release. The investment still requires regulatory approval, but provides a ray of hope for the bank, which has been losing money and operating under a regulatory order.
"This is a commitment by the family to ensure we remain independent, privately owned and focused on meeting the needs of our local customers and communities for the long term," Helen Johnson-Leipold, the company's chairman, said in a written statement.
The $4.2 billion-asset Johnson Financial has been considering all options, including raising money from outside investors, but never put the company up for sale, Johnson-Leipold said. The infusion will push Johnson Bank above well-capitalized status.
At June 30, the bank's total risk-based capital ratio was 9.56% and its Tier 1 risk-based capital ratio was 7.47%.
Johnson Financial lost about $10 million through the first nine months of this year, following a net loss of $220.2 million in 2010. The losses were "mostly because of real estate loans that soured in the weak economy," according to an article on the company’s website. Even with the new investment, executives expect Johnson Financial to continue losing money through 2013.
Johnson Financial, the second-largest bank based in Wisconsin, was founded in 1970 to "deliver the exceptional service our customers deserved but couldn't get from the large national banks," Johnson-Leipold said.
Tom Bolger, the company's CEO,
The Johnson family also controls S.C. Johnson & Son Inc., the company that makes products such as Raid bug spray, and Johnson Outdoors, a manufacturer of boat engines, tents and other recreational equipment.
