MONROE - Shareholders of MBT Financial Corp., holding company for Monroe Bank & Trust, yesterday rejected proposals that could have diluted their battered shares by more than 10-to-1.
The hour-long meeting in the the bank's downtown Monroe headquarters drew scores of shareholders. Bank officials refused to allow a Blade reporter to attend, despite letting reporters into previous meetings.
After the meeting, MBT Financial officials said a proposal to increase the total authorized number of common shares from its present 30 million to 300 million was defeated, but they did not reveal the vote total. They said a proposal to allow issuance of up to 10 million new "preferred" shares was defeated as well.
The company's board argued that the increased share authorizations represented "a straightforward request to provide us additional options for raising capital in the event we determine these options are the most advantageous of those available."
The Michigan bank had a leverage ratio of 6.28 percent as of the end of 2009, an "adequate" capital ratio in normal economic times but low in a faltering economy. The bank is under an informal agreement with the Federal Deposit Insurance Corp. and bank regulators from the state to raise its capital ratio above 8 percent, bank officials said.
Last month, MBT Financial reported a first-quarter profit of $348,000, compared with a loss of $1.4 million for the same period a year ago.
Net interest income, a key revenue measure for banks, dropped 8 percent to $9.4 million, and total assets decreased $104 million to $1.38 billion at the end of the first quarter. Provisions for loan losses dropped to $2.2 million from $4.2 million a year earlier.
After the meeting, shareholders said they were pleased the dilution proposals had been defeated, and that MBT's fortunes would improve as the local economy recovers.
"Three hundred million shares was crazy," said shareholder Mike Gaynier of Monroe.
He applauded bank management for recently adopting what he called a "very conservative approach" to its loan portfolio going forward, something he predicted could help the bank's share price recover. Yesterday, the bank's shares price closed at $3 on Nasdaq.
"Everybody seems to be in agreement that things aren't getting better, but they're not getting worse, either," said shareholder Ralph Mahalak, Jr., owner of Monroe Dodge Superstore.
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