U.S. Century sold, will become C1 Bank

U.S. Century Bank said Friday that it has agreed to be sold to C1 Bank, putting an end to the Doral-based bank’s quest for capital while adding to a growing community bank based in St. Petersburg.

C1, privately owned by four investors — including two Brazilians — will be injecting $100 million of fresh capital into the combined bank, aimed at boosting lending volume to local businesses and families, said Trevor R. Burgess, chief executive of both C1 and its holding company, CBM Florida Holding Co.

“We expect we will be a material new lender in the Miami area, which we do think will help drive economic recovery,” said Burgess, 39, a former Morgan Stanley investment banker, who, along with Brazilian partner and chairman, Marcelo Lima, holds a majority ownership in the holding company. A third partner is also Brazilian, and the fourth is Dutch, Burgess said.

Terms of the purchase, which will add U.S. Century’s 24 branches in Miami-Dade and Broward and $1.2 billion in assets to C1, were not disclosed. The sale, subject to regulatory approval, is expected to close by year-end.

“What this means is it really complies with the No. 1 priority of myself and the board to inject capital into the bank as the regulators requested of us,” said Carlos J. Dávila, U.S. Century’s chief executive and president who joined the bank last week, replacing Octavio Hernández, who announced his retirement. “This saves a great institution and a great franchise, and even though the name will change and we will be folded into C1 Bank — which is an up-and-coming franchise in the state of Florida, it saves the employees, our locations and our reputation within the community. That is important.”

Founded in 2002, U.S. Century has struggled for the past few years and has continued to operate under a June 2011 regulatory consent order mandating it to boost capital, reduce its bad loans, and return to profitability, among other requirements.

One of the few Florida banks to receive TARP funding, the sale to C1 will now resolve U.S. Century’s $50.2 million obligation to the federal government.

“At the closing of the transaction, the TARP funds will be resolved with the U.S. Treasury,” Burgess said, declining to provide any details of repayment or settlement. Terms can only be made available to the public by the Treasury Department after the deal closes.

C1’s parent, CBM Florida Holding Co., was created in 2008 to acquire, capitalize and rehabilitate Florida banks. It first acquired a controlling interest in Community Bank of Manatee in 2009, then bought First Community Bank of America in 2011, and finally, Palm Bank in May of this year, raising its assets to $925 million.

Burgess said he came up with the name C1 on a plane ride. It is a simplification of the bank’s core values: Clients 1st, community 1st, he said.

With its first three acquisitions under its belt, C1 made $151 million in new loans last year. The bank has been profitable for nine consecutive quarters, and reported more than $3 million in net income for the first six months of this year. C1 is active in residential mortgages and Small Business Administration-guaranteed lending, as well as other types of consumer and commercial loans, Burgess said.

C1 Bank was also recently named by Inc. magazine as one of the 5,000 fastest growing companies in the United States.

With the acquisition of U.S. Century, it will now add the coveted South Florida market to its Tampa Bay network, which already includes branches in Pinellas, Hillsborough, Manatee, Charlotte and Pasco counties.

The deal elevates the bank to 45 branches, doubles its employee base to about 400, and boosts its assets to $2.2 billion.

“We were very interested in U.S. Century because of its retail network, a great network of 24 branches and a really great customer base,” Burgess said. “So we thought it would be a good fit and complement to what we have on the west coast of Florida.”

He said he does not anticipate branch closings or layoffs. In fact, he said, the bank is growing so fast that it is hiring, and has a dozen open positions currently.

David Barr, spokesman for the Federal Deposit Insurance Corp., said new banks are put under heightened scrutiny, and C1 is not subject to any enforcement actions from the agency.

“Any bank that is less than seven years old is considered a denovo or new bank, and those types of banks are subject to higher capital requirements than well-established banks, subject to more frequent examination activities during the seven-year period, and we closely monitor any material changes to their business plan,” Barr said.

For U.S. Century, the deal is a culmination of a lengthy process of trying to raise capital. Last year, it hired the Japanese investment banking firm Nomura Securities to try to raise at least $150 million in private equity funds.

Burgess said C1 has been in discussion with U.S. Century for several months, doing due diligence and getting to know the management team and board. He said the deal came together rather quickly.

“It’s a win for our employees, it’s a win for our customers and it’s a win for Miami-Dade County,” said Dávila, who plans to remain with C1 to head local operations. “The brand will go away, but the foundation given by the employees and our customers will survive, and we will be part of a bigger company called C1 Bank.”

This story was originally published August 31, 2012 at 2:00 AM.