Macatawa Bank Corp. in Holland, Mich., has closed on a $10.25 million of common equity in public offering and now should have enough capital to satisfy its regulatory order.
The $1.5 billion-asset company announced Thursday that it completed a $10.25 million common equity raise. The oversubscribed public offering followed a rights offering, which was completed on June 7, which also raised $10.25 million. Both raises were priced at $2.30 per share, an 8% discount to the company's stock price on May 5, when it first disclosed it was seeking capital. On Wednesday, the stock closed at $2.75 per share.
The company also announced that it converted a $1 million subordinated debt note into common equity. Collectively, the three moves brought in a total of $21.5 million of common equity. The company originally sought to raise $41 million when it announced the raises in May, but pared it back following the rights offering.
Still, it said it raised more than enough for its Macatawa Bank unit to comply with a consent order, which called for the bank to maintain a leverage ratio of 8% and a total risk-based capital ratio of 11%. At March 31, those ratios were 7.1% and 10.4% respectively, making the bank well-capitalized by traditional standards, but out of compliance with the order.
In a press release, Richard L. Postma, chairman of the company, said that the raise should help lift the order and could foster future growth.
"We look forward to continuing to work with our regulators as we work toward our goal of eventually having the consent order removed. The successful completion of the offering is an important step toward achieving that goal," Postma said. "We believe [the raise] also positions us for long-term growth and success. We now have a capital base that will support future organic growth and consideration of future strategic opportunities."