Cecil Bancorp said on Friday that it had raised $30.2 million from investors to recapitalize the cash-starved bank holding company, the <em>Baltimore Sun</em> reported on Saturday. The Elkton, Md.-based parent of Cecil Bank said in July it planned to send itself through a bankruptcy auction to secure the financing from a group of private investors. Cecil Bank foundered under the weight of bad real estate loans in the wake of the recession, losing so much money that its capital base eroded and federal banking regulators ordered it to raise money. In late June, the bank holding company filed for a chapter 11 reorganization in Baltimore’s federal bankruptcy court. The move gave the company a way to raise money from investors to pay off its debts and to re-emerge with a clean slate without interrupting business for customers, including deposits and loan commitments. As part of the recapitalization, Cecil will extinguish its $17.5 million debt to the federal government under the U.S. Treasury Department's Troubled Asset Relief Program, part of the broad bailout for financial institutions following the 2008 financial crisis. Through a stock exchange, the Treasury received $880,000 of what it was owed, according to the restructuring plan.
