C1 Bank in St. Petersburg, Fla., and U.S. Century Bank in Doral, Fla., have terminated their planned merger and have entered into a new agreement.
Under the new agreement, the $901 million-asset C1 would acquire certain real estate assets of U.S. Century, including the lease for U.S. Century's Brickell Avenue branch in Miami. No U.S. Century customers would become customers of C1 as part of the new deal.
The prior deal was "terminated as certain requirements of the merger agreement could not be fulfilled on a timely basis," the companies said in a news release last week.
C1 announced in August that it would buy the $1.2 billion-asset U.S. Century for an undisclosed price. The original deal would have given C1 two dozen branches in two attractive Florida markets, Miami-Dade and Broward counties. The new agreement still gives C1 an entry into Miami-Dade, Trevor Burgess, chief executive of C1, said.
"We are excited to enter the Miami-Dade market in such a positive way," Burgess said in a news release. "We'll hit the ground running with a great location on Brickell."
That original deal also would have injected badly needed capital into one of Florida's largest struggling banks. The investor group behind CBM Florida Holding, the parent company of C1, had planned on investing $100 million into U.S. Century, which had a core capital leverage ratio of 4.28% at Sept. 30, according to the Federal Deposit Insurance Corp. U.S. Century's noncurrent loans totaled almost 22% at Sept. 30, according to the FDIC.
But the deal hit a snag when the Treasury Department rejected a proposal for C1 to repay the $50.2 million U.S. Century still owed to the Troubled Asset Relief Program at a 90% discount.
Hurricane Sandy also delayed a vote on the sale by U.S. Century's shareholders. Financial advisors in New York City were not able to fly to Florida for the meeting because of the storm in late October. The company's shareholders eventually approved the original deal in late November and it was expected to close by the end of the year.
The restructured deal would reduce U.S. Century's overhead and allow it to remain independent, Ramon Rasco, chairman of U.S. Century, said in a news release. The company also intends to raise additional capital, Rasco said.
The companies have signed a letter of intent and plan to enter into a definitive agreement by the end of the year.