Monarch Community Bancorp (MCBF) in Coldwater, Mich., has raised $16.5 million in a private placement that will allow it to exit the Troubled Asset Relief Program.
The $186 million-asset Monarch also announced plans to lay off an undisclosed number of employees as part of a corporate restructuring.
Monarch will use its new capital to retire an $8.2 million debt to Tarp at the discounted price of $4.4 million, according to a press release Wednesday.
The remaining funds will be used to recapitalize Monarch and support its growth efforts, the company said. Monarch is operating under a May 2010 consent order with the Federal Deposit Insurance Corp. that requires it to maintain a minimum Tier 1 leverage ratio of 9% and total risk-based capital of at least 11%. It had a Tier 1 leverage ratio of 5.6% and total risk-based capital of 10.5% at the end of June.
"We are very gratified at the response of the investment community," Chief Executive Richard DeVries said in the release.
The layoffs are expected to save the company roughly $1.3 million in annual expenses. "These are difficult decisions to make and to implement," DeVries said in the release, "but they will allow us to operate with an expense structure that will be more in line with our peer banks across the state of Michigan."
Monarch operates five full-service retail branches and eight loan production offices in Michigan, as well as one loan production office in Indiana.