Struggling North Milwaukee Bancshares is asking its home city for a cash infusion, but the city has so far been reluctant to make a commitment.
The $81 million-asset company has asked the Milwaukee Economic Development Corporation, a city-affiliated lender, to purchase 20,000 shares of its stock, worth approximately $100,000, according to a report in the Milwaukee Journal Sentinel.
However, MEDC officials said they want to find out more information about the bank's stock offering before making any investment, which could give it up to a 17% ownership in the company.
North Milwaukee State Bank, its only subsidiary, has struggled financially in recent years, losing $680,000 in 2013 and $979,000 in 2012, according to FDIC records.
It has also come under scrutiny from federal regulators. In a written agreement with the Federal Reserve in November, the bank agreed not to pay dividends or take on new debt. Additionally, the Federal Deposit Insurance Corp. told the bank in April 2013 to reduce its share of troubled loans and maintain a Tier 1 leverage ratio of at least 9%. At March 31, nearly 13% of the bank's loans were at least 90 days past due, compared to 8.6% two years earlier, according to FDIC data. Its capital levels have also been falling as problem loans have mounted.
North Milwaukee, which operates two branches in the city, said the funds raised from the stock offering will be used to improve the bank's equity capital.