An ailing Milwaukee community bank that needs to bolster its capital levels is about to receive a significant cash infusion from a prominent local family.
Ixonia Bancshares announced Wednesday that Sheldon Lubar, the founder and chairman of the investment firm Lubar & Co., and his family will invest $15 million in the company as part of a planned $20 million recapitalization.
With its investment, the Lubars will gain voting control of the $346 million-asset Ixonia and its subsidiary, ISB Community Bank. The additional $5 million would be raised through a stock sale that will be open to existing shareholders who reside in Wisconsin, the company said in a news release.
ISB Community's capital ratios have fallen below well-capitalized levels as the bank has suffered steep losses on real estate loans. The bank has lost more than $17 million since the start of 2009 and and its total risk-based capital-to-assets ratio at Dec. 31 was 9.42%, compared to 11.14% two years earlier.
“This agreement is positive for our customers, shareholders, the community and our employees,” said Philip Holland, chairman of ISB Community Bank. “The capital will have a beneficial and lasting impact on the success of ISB Community Bank, strengthening our business and our financial position and allows us to remain a well-capitalized and independent bank.”
The Milwaukee Business Journal first reported news of the Lubar's investment on its website Wednesday.
Lubar's eponymous firm has investments in a variety of companies, ranging from energy firms to hospital equipment manufacturers to the Milwaukee Brewers baseball club. The firm, founded more than 40 years ago, primarily invests in companies in the upper Midwest with between $20 million and $100 million of annual revenues.
Lubar is no stranger to banking; he has held management positions and served on boards at several community banks throughout his 50-year career.
“We look forward to working with Ixonia Bancshares and ISB Community Bank and investing in its future," Lubar said in a news release. "Simply said, our mission will be soundness, profitability and growth, in that order.”