U.S. Century Bank’s proposed investors have sweetened the deal for the troubled bank’s existing shareholders, and brought in another well-known South Florida family.
The investors have agreed to raise the existing stockholders’ share of the bank’s stock at closing to 25 percent, up from 17.5 percent, said Jimmy Tate, president and chief executive of Tate Capital, who is leading the group of well-heeled investors along with Sergio Rok, president of Rok Enterprises.
“Sergio and I wanted to do this because we want the legacy shareholders vested and engaged in the process and in the new bank,” Tate said. “It also afforded Sergio and I an opportunity to bring in additional key investors such as the Mas and Navarro families and Louis Wolfson and David Deutch.”
Brothers-in-law, Wolfson III and Deutch, a former banker, are partners in Pinnacle Housing Group, a South Florida developer of affordable housing. The Wolfson family, which founded Wometco, is also among South Florida’s pioneer families.
“At this point in my life, I like growing our community and trying to help Miami-Dade County become the best it can possibly become,” said Wolfson, citing the importance of a community bank.
He and Deutch said they have known Tate and his family all their lives.
“When Jimmy presented this idea to us it just seemed like a natural to, candidly, help fill a void because the bank was stronger in its heyday, and we want to be a part of its rebuilding process,” Deutch said. “Community banks form the fabric of a community.”
Also recently joining the group: Jose Mas, chief executive of MasTec, and his brothers, Jorge, chairman of MasTec and Juan Carlos; and brothers Gabriel and Marcel Navarro, along with their brother-in-law Martin Pico.
Other investors, all linked as friends, family or business partners, include Tate’s brother Kenny, co-owner of Tate Capital; Jorge Perez, chairman and chief executive of the Related Group; Wayne Chaplin, president of Southern Wine & Spirits; real estate developer Scott Robins and his father Gerald; Perry Ellis International Chairman and Chief Executive George Feldenkreis and his son Oscar, president of Perry Ellis International; Alan Potamkin, co-chairman of the Potamkin Companies; Philip Levine, founder of Royal Media Partners; Paul Feinsilver and business partner Jimmy Klotz, owners of FMS Bonds; and Carlos Migoya, a former banker and current chief executive of Jackson Health System.
The investors have offered to recapitalize the Doral bank by investing $50 million and bringing in a third party to buy certain loans, including all $95 million of U.S. Century’s non-performing loans.
The group has signed a definitive agreement with U.S. Century, and filed applications with federal and state regulators. The investors have also reached an agreement with the U.S. Treasury Department to pay an as yet undisclosed, negotiated amount that “significantly” exceeds $6.3 million, to repay $50.2 million in TARP funds that the bank owes, Tate said.
But a significant hurdle remains: a resolution to pending shareholder litigation — a class-action lawsuit and a derivative lawsuit — related to alleged wrongdoings of the bank’s current and past directors and management.