U.S. Century Bank has finalized a deal with two private-equity firms that will inject $65 million into the troubled financial institution and allow it to remain independent and locally owned, the bank confirmed on Wednesday.
Shareholders of the Doral-based bank, which took a taxpayer-funded $50.2 million loan in 2009, approved the new investment at a meeting earlier in March.
“It’s a new beginning in the history of U.S. Century,” said bank president and CEO Carlos Davila. “Today, the bank closes a chapter by resolving the majority of our issues that put us in a situation of being distressed.”
“And this is a big win for the community of Miami because it saves a locally owned institution for the benefit of entrepreneurs and small business owners, who are a big part of our customer base,” Davila added.
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Private-equity firms Patriot Financial Partners, based in Philadelphia, and Priam Capital, based in New York, will each invest $20.5 million. Existing shareholders and other investors will contribute the remaining share.
U.S. Century, which has 21 branches in South Florida, will use $12.3 million of the new investment to buy federal securities from the Troubled Asset Relief Program (TARP) as a way to pay back part of its government bailout.
The need for new capital was mandated in a 2011 consent order with federal regulators after the bank ran into trouble because of bad loans and other problems during the recession. Two previous deals with other investors had failed.