By Becky Yerak | ShoreBank lost $17.3 million in the first quarter and saw its capital
ratios worsen at a time when it’s trying to raise capital from both
existing and new investors.

The undercapitalized bank, besides hoping to tap such existing investors
as JPMorgan Chase and Citigroup, also wants to try to raise money from
State Farm, which has a tentative commitment. It also plans to hit up such
local institutions as Northern Trust, Wintrust and MB Financial, a
person familiar with ShoreBank’s situation said.

ShoreBank Corp. has been trying to raise more than $200 million as its ShoreBank unit has been hurt by its lending to depressed areas. As the Tribune reported on April 16, ShoreBank Corp. has told potential investors that — as of the end of March — it has raised nearly half of the private capital needed to support a total capital raise of $200 million, including $74.7 million from the U.S. Treasury.

ShoreBank also said it set aside $15 million for potential loan losses in the quarter, compared with $71.1 million in the fourth quarter. But its Tier 1 leverage ratio stands at 1.16 percent, which means that it’s undercapitalized. That’s down from 4 percent at year-end.

Despite this, ShoreBank said it ended the quarter with improved liquidity and less reliance on brokered deposits.

Complete first-quarter financial reports haven’t yet been filed with the Federal Deposit Insurance Corp.