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Merchants & Marine Bancorp Completes Capital Raise
Rhea-AI Impact
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Rhea-AI Summary
Merchants & Marine Bancorp, Inc. (OTCQX: MNMB) has completed a capital raise through the U.S. Treasury’s Emergency Capital Investment Program (ECIP), issuing $50.595 million in nonvoting, noncumulative preferred shares in exchange for the funds. These shares carry a maximum dividend of 2% and will not dilute common shareholder ownership. The bank, designated as a Community Development Financial Institution (CDFI), aims to enhance its community investments while maintaining a strong capital position.
Positive
Raised $50.595 million through ECIP, enhancing capital position.
Non-dilutive preferred shares benefit common shareholders.
Focus on community development aligns with investment goals.
Negative
None.
PASCAGOULA, Miss.--(BUSINESS WIRE)--
Merchants & Marine Bancorp, Inc. (OTCQX:MNMB), the parent company of Merchants & Marine Bank, has announced the completion of its capital raise through the United States Treasury’s Emergency Capital Investment Program (ECIP). In exchange for the capital injection, the company has issued senior preferred shares, with a face value equivalent to capital received, to the Treasury. Those preferred shares are nonvoting, noncumulative, perpetual shares that carry a maximum dividend rate of two percent, with the possibility of the dividend being as low as a half percent, or 50 basis points, depending on the bank hitting certain investment benchmarks into disadvantaged communities. Dividends do not begin to accrue until 24 months after the receipt of funds by the company, which was June 7, 2022. The total value of preferred shares issued, as well as the amount invested by the Treasury into the company, stands at $50.595 million. It is important to note that these preferred shares are non-dilutive to common shareholder ownership.
Merchants & Marine Bancorp, Inc. qualified for the investment due to its status as a Community Development Financial Institution (CDFI). It is certified as such due to its lending, investment and service activities targeted to low-to-moderate income census tracts and certain other disadvantaged areas and populations within its footprint. This is a mission that leadership of the company has committed to continue, and even increase, with the receipt of ECIP funds. The funds receive a Tier 1 capital treatment at the bank, allowing for increased growth and safety above the already strong capital position enjoyed by Merchants & Marine Bank.
“So many times, our mission of serving our communities and the people within those communities does not always translate to increasing efficiencies or profitability,” said the company’s Chief Financial Officer, Casey Hill. “In those instances, we’ve nearly exclusively made the call to stick with our communities rather than chase incremental dollars. In committing to this program, we have aligned the interests of our communities and shareholders in a way that is, all too often, difficult to do. With such low-cost leverage in our capital stack, we can not only fulfill our mission of increasing our investment into our communities, we can also increase our return to our shareholders in a very meaningful way in the near future. It’s a very unique, but very enviable, situation in which we find ourselves. We cannot wait to put this money to work.”
“We are appreciative to both Treasury and Congress for recognizing the important work that CDFI’s like Merchants & Marine Bancorp, Inc. do throughout our country by authorizing and funding ECIP,” Remarked Clayton Legear, the company’s President & Chief Executive Officer. “Now, more than ever, our nation needs a strong and stable community banks and we remain ready to answer this call. Since our relaunch in 1932, we have operated continuously as a true community bank focused on building stronger communities and brighter futures. We were proud to be certified as a CDFI years ago, to further demonstrate our commitment to community banking. Our team looks forward to putting ECIP funds to work for the betterment of our communities, as well as our continued growth and the continued development of our bank’s capacity to thrive in a rapidly changing environment.”
Merchants & Marine Bancorp, Inc. (OTCQX: MNMB) is the parent company of Merchants & Marine Bank, a Mississippi chartered community bank serving the Gulf South region. Originally founded in 1899, Merchants & Marine Bank was reborn in 1932 during the middle of the worst economic disaster in the history of the United States: The Great Depression. More than eight decades later, Merchants & Marine Bank has grown from $25,000 to over $700 million in assets, and from 2 offices to 16 offices serving the Mississippi & Alabama Gulf Coast region, as well as the Mississippi Pine Belt. The bank offers mortgage financing through its Canvas Mortgage division. For more information on Merchants & Marine Bank, visit www.mandmbank.com. For more information on Canvas Mortgage, visit www.canvasmortgage.com.
