U.S. Century Bank, the nation's largest undercapitalized bank, is close to a deal that would give a controlling stake to local investors.

The Doral, Fla., bank has received a letter of intent from a group of investors led by James Tate of Tate Capital, a Miami real estate fund, that want to inject $50 million in cash and buy up to $90 million in bad loans, a U.S. Century spokeswoman said. The sale is under negotiation and the bank intends to sign a letter of intent next week, she said.

If the deal goes through, the bank expects the agreement to be signed in early March and, pending shareholder and regulatory approval, it could be completed by mid-year. U.S. Century's current directors would remain shareholders in the bank.

Tate was unavailable for comment.

U.S. Century has been furiously raising capital after its planned merger with C1 Bank collapsed in November. The bank raised $120 million through loan sales during the last three months of 2012. Its nonperforming loans fell to $98 million at Dec. 31, compared to $230 million a year earlier, the spokeswoman said.

U.S. Century faces legal challenges, including a lawsuit that claims that bank directors used funds from the Troubled Asset Relief Program to rescue their own side businesses.

If the planned sale goes through, U.S. Century will have shed all its nonperforming loans and be prepared to make new loans, the spokeswoman said, though it will still not reach "well-capitalized" status.

U.S. Century had $1.2 billion in assets at Sept. 30 and lost $8.1 million during the first nine months of last year, according to regulatory filings.

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