A group of investors has agreed to buy Beach Community Bank in Fort Walton Beach, Fla., for $100 million once its holding company goes through bankruptcy, according to a local news report citing the bank.
The $496 million-asset bank was hurt by the financial crisis and the Deepwater Horizon oil spill in 2010, which caused businesses to close and slowed tourism in the Gulf Coast region, President and CEO Tony Hughes told the Northwest Florida Daily News this week.
Beach Community did not immediately respond to a request for comment Wednesday.
Going through bankruptcy was the only way the board could attract new investors, Hughes said, according to the news report. The bank’s six current directors will remain on the board while another five to seven will be added, Hughes said, according to the Daily News.
The capital will be used to resolve problem loans, Hughes said, according to the report. The amount of money that the investor group — which will include individual and institutional investors — will pump into the bank roughly totals the bank’s problem assets, Hughes told the Daily News.
Beach Community’s noncurrent loans were roughly 20% of overall loans, and its Tier 1 risk-based capital ratio was 3.45% at Dec. 31, according to data from the Federal Deposit Insurance Corp. The bank lost $4.3 million last year, according to data from the FDIC.
Most of the problem assets will be sold, Hughes was cited as saying. The recapitalization should happen after Beach Community Bancshares completes bankruptcy, which could take 60 to 90 days.