Foundations Bank raises $5 million

Generations Bancorp, Inc., parent of Pewaukee-based Foundations Bank, has raised $5 million in new capital from a shareholder subscription.

The company will complete its placement offering in May, with a $7.5 million capital raise goal.

The investment will raise Foundations’ capital ratios above well-capitalized status and set the institution on a path to sustainable, long-term success, the company said.

“There is a growing need for a strong, local bank in the Lake Country & Waukesha County markets and we are excited about our ability to deliver superior services to the businesses and neighborhoods in those areas,” said John Hazod, interim president. “Our capital raise efforts will allow us to make additional investments so we can continue to deliver exceptional service, expertise and commitment to our community.”

Generations will use the proceeds of the offering to provide additional equity to the bank and address a consent order issued to Foundations by the Wisconsin Department of Financial Institutions and the Federal Deposit Insurance Corporation in 2010.

Among the requirements listed in the order were to “restore all aspects of the bank to a safe and sound condition, including capital adequacy, asset quality, earnings, management effectiveness, liquidity and sensitivity to interest rate risk.”

Foundations was required to maintain its tier 1 capital at a minimum of 8 percent of its total assets, and later raise it to a higher percentage. There were also internal audits and the requirement to formulate a strategic plan.

“This investment puts our capital ratios well beyond those required by the consent order and will allow us to continue the significant progress we have made in improving the bank’s overall financial condition.  We are excited about the opportunities that we see in our market place and look forward to building upon the momentum that we have established in the past year,” Hazod said.

Foundations has total assets of $127 million and serves commercial and consumer customers in the Lake Country and Waukesha County areas. The bank’s founders, Greg and Heidi Kolton, resigned from their positions as chief executive officer/president and chief operating officer/executive vice president, respectively, in February 2011.

Sign up for BizTimes Daily Alerts

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

No posts to display