Gulf Coast Community Bank in Pensacola, Fla., has taken a significant step towards long-term recovery.

The $160 million-asset bank recently raised roughly $3.1 million in a stock offering to existing and new investors. Buzz Ritchie, the bank's chief executive, says the funds will help to shore up capital levels.

"We are thinly capitalized and have a high Texas ratio," he says. "We all think we need to have a Tier 1 capital ratio of 8%. This will get us to a little over 4%."

Gulf Coast Community remains under a consent order from the Federal Deposit Insurance Corp. and its state regulator, ordering management to work on building capital and addressing asset quality and concentrations. Nonperforming assets make up about 12.5% of total assets, consisting largely of commercial real estate loans, Ritchie says.

"Our commercial and residential markets are materially improving," he adds. "And we're seeing a lot more honest activity where people are talking to us about OREO. Improvement is occurring in part because the economy is improving here in northwest Florida."

The capital raise, handled by Community Capital Advisors in Atlanta, was evenly divided between existing investors and newcomers, Ritchie says. "There is more work to be done, but this capital raise was a very big and important step," he says.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.