Monarch Community Bancorp, the holding company for Monarch Community Bank, has received a $6.79 million U.S. Treasury investment in exchange for 6,785 shares of the company’s preferred stock as part of the troubled assets relief programme capital purchase programme which is designed to inject capital into healthy financial services institutions.
The Treasury also received warrants to purchase 260,962 shares of Monarch Community Bancorp’s common stock at $3.90 per share. The warrants will expire in 10 years. The preferred shares are callable by Monarch Community Bancorp at par after three years. Monarch Community Bancorp may call them during the first three years, but only with the proceeds of newly-issued tier one equity capital in an amount of at least 25% of the amount of the Treasury’s investment.
The purpose of the Treasury’s $250 billion capital purchase programme (CPP) is to restore confidence in the financial system, increase the flow of financing to businesses and consumers, assist delinquent mortgage borrowers, as well as to support the U.S.’ economy. Participation in this programme is voluntary.
Donald Denney, president and CEO of Monarch Community Bancorp, and Monarch Community Bank, said: As a community banking company we are excited about the prospects that this access to capital provides, as it will facilitate expanded service to our customers and the communities we serve. We exceeded the regulatory standards for being considered well-capitalised prior to the addition of capital from the CPP.
