Prime Pacific Financial Services in Lynwood, Wash., will raise $5 million through a private placement of common stock as it works to meet capital requirements from a regulatory order.
Shareholders of the $128 million-asset company approved the capital raise at a meeting on Monday, the Puget Sound Business Journal reported Tuesday.
The company's Prime Pacific Bank has been operating under a cease-and-desist order since August 2009 from the Office of the Comptroller of the Currency. The order requires the bank to maintain Tier 1 capital of at least 9% and total risk-based capital of at least 12%. At March 31, its core capital leverage ratio was 3.98% and its total risk-based capital ratio was 6.62%, according to the Federal Deposit Insurance Corp.
The order also requires the bank to reduce its problem assets, submit a written liquidity program and provide a plan to manage the risk in its commercial real estate loan book. Prime Pacific reported a net operating loss of $1.1 million for the quarter that ended March 31, according to the FDIC.