U.S. Century Bank is expected on Tuesday to announce that it has signed off on its letter of intent — the framework for a plan to recapitalize the bank.
Under the deal, a local group of investors, led by Jimmy Tate of Tate Capital and Sergio Rok of Rok Enterprises, will bring in fresh capital and wipe out the Doral bank’s bad loans, while allowing it to operate independently.
The investor group is expected to inject $50 million in capital into the bank, becoming majority owners. In addition, the group will pay about $90 million to buy certain loans, including all $98 million of U.S. Century’s non-performing loans, said U.S. Century President and Chief Executive Carlos J. Dávila. The deal would also provide for a negotiated amount to be paid to the federal government to repay U.S. Century’s $50.2 million in TARP funds.
A definitive agreement, based on the letter of intent, is expected next month. Pending shareholder and regulatory approval, the deal could be completed by mid-year, Dávila said.