Missouri Trust & Investment Co. is raising additional capital from shareholders as officials look to make an acquisition and cover net income losses, among other financial moves.
Missouri Trust CEO Richard Russell said the capital, an undisclosed amount, also would help the firm meet the $2 million minimum capital requirement by the Missouri Division of Finance.
Missouri Trust currently has $1.52 million in capital, according to the firm’s latest call report on file with the state.
Russell said Missouri Trust’s acquisition target is in Missouri but outside of the Springfield market.
Declining to name the company, Russell said negotiations are in the final stages and he hopes to close the deal in the second quarter.
“It’s a brand new market, offering a synergy of services between the two markets,” he said.
Missouri Trust currently manages $118 million in assets from 210 accounts, Russell said, roughly double 2017 figures.
“This is a fairly regular event for growing organizations to have capital raises,” Russell said. “The capital is required to continue our growth and for the acquisition.”
Lee Keith, commissioner of finance for the Missouri Division of Finance, said trust companies raise capital for multiple reasons, such as a change in business model or an acquisition. Keith said he was not aware of Missouri Trust’s plans to raise more capital.
The call report filed with the state on Dec. 31, 2018, shows a net loss of $808,000. It also reported $1.65 million in assets and $1.65 million in total liabilities and equity capital.
“We anticipate a little time to break even,” Russell said. “The minimum capital requirement was doubled shortly after we got our charter. Projections got thrown out.”
The minimum capital requirement doubled to $2 million after the Division of Finance began looking into the requirements over a year ago, Keith said.
“That’s a fairly significant change when we opened,” Russell said.
He said the Missouri Division of Finance has been accommodating while the company climbs toward the $2 million mark.
“They’ve given us time to transition to that number. They want to see us succeed,” Russell said.
“That’s a target we have in the near future to get to that number.”
State officials say the increase reflects the time value of money.
“A lot of the trust company guidelines were established 30 or 40 years ago,” Keith said. “If you take inflation on $250,000 over 35 to 40 years, it’s going to be higher than $2 million, but that’s a good round number.”
Keith said the Division of Finance works with trust companies below the minimum capital requirement to establish a timeline.
“The decision is a joint decision by other both parties,” he said.
Russell declined to disclose Missouri Trust’s timeline.
The company has 48 shareholders listed on its website, including a nine-member board of directors.
Springfield Business Journal’s calls to five shareholders were not returned by press time.
Missouri Trust is a state-chartered independent trust company currently serving the northwest Arkansas and south and central Missouri markets with one office at 3100 S. National Ave. It received its charter 20 months ago.
According to past SBJ reporting, Missouri Trust raised $3 million during its planning stage before opening.
Missouri Trust works with startup companies and family businesses, established organizations and executives from large companies by providing trust and estate administration, investment management, 401(k) and individual retirement account management, and financial and estate planning, according to Missouri Trust’s website.
Mid-America Safety & Environmental is building a training facility in north Springfield to accommodate its 30-40 classes per year.
“Sometimes I’m really bad at my email, other times, I’m very on top of it,” says Megan Short, executive director of Springfield Contractors Association. Short says to stay current, she often …
Donald Babb, former CEO and executive director of Citizens Memorial Hospital, says his grandfather was his first mentor. “He always told me, you can do whatever you want to do,” Babb says. “You …
Entrepreneur Amby Lewis says it’s important to show support for local businesses and events on social media. Lewis says liking. sharing and commenting on posts can increase awareness and help a …
Joe Hornickel, planning and zoning director for the city of Branson, says one of the community's goals is to have year round jobs like manufacturing. While Branson has good access to highways, …
Carrie Tennis, senior director of operations with Family Pharmacy, says focusing on communities, customers and culture is the formula for their success. Practicing kindness is a more than four decade …
Christina Ford, president and founder of The Rebound Foundation, says she used to constantly shift roles between work and home life. Another young mom told her she designated certain days to her …
Parks play a large role in our quality of life, from creating memories to generating more than $15 million in annual visitor spending. Diana Tyndall, marketing & sponsorship coordinator with the …
Chris Bryant, development and productivity coach with Murney Associates, says in real estate, you must take many factors into account to develop your business plan. Factoring in your work hour and …
CEO of Modbox, Justin Cardoza, knew a little about electronics from his work in video and photography. He also knew when it was time to seek out a professional. Cardoza talked with a prototyping …
Brandi O’Reilly, executive director of Dynamic Strides, says one of their biggest challenges is funding patient’s therapy sessions when Medicaid and insurance reach their annual caps. “Every …