A majority of U.S. Century Bank’s shareholders approved the Doral bank’s proposed sale to C1 Bank of St. Petersburg late Tuesday during a meeting at Florida International University despite dissension from some stockholders, including those who have filed suit against the bank and some of its directors and officers.
According to the terms of the deal, the bank’s 441 shareholders will receive $2.5 million from the sale, or about 1.7 cents on the dollar, from $150.1 million U.S. Century raised from multiple offerings since it was founded 10 years ago.
The sale agreement, which required approval from holders of 51 percent of the shares, still requires approval from federal banking regulators. Seventy-four shareholders attended Tuesday evening’s meeting.
The deal to sell U.S. Century to C1, reached Aug. 30, includes a proposed, renegotiated $6.27 million repayment to the federal government of $50.2 million in TARP funds. The U.S. Treasury Department must approve the proposed TARP (Troubled Asset Relief Program) repayment. According to documents, the deal also includes up to $400,000 to be paid by C1 to regulators should U.S. Century be fined over Bank Secrecy Act violations found in its recent regulatory examination.
The bank has said the sale is expected to be completed by year-end.
A group of shareholders has filed a “derivative action” suit, which seeks to recover money from the bank that allegedly resulted from the wrongdoing of the bank’s directors and officers.
The suit was filed Nov. 13 in Miami-Dade Circuit Court by brothers Carlos R. Silva and Jorge E. Silva, both Coral Gables attorneys and founding shareholders, and last week was amended to include several additional shareholders — including Shoma Group head Masoud Shojaee — totaling more than $10 million in original investments, said Coral Gables attorney Gonzalo Dorta who represents the shareholders who filed the suit against the bank and some of its current and former officers and directors. Among the defendants are Telemundo executive Jose Cancela, homebuilder Sergio Pino — who formerly owned U.S. Century’s headquarters building, and public affairs businessman and lobbyist Rodney Barreto.
“I feel terrible,” Carlos Silva said after the meeting. He estimated the losses that he and his brother sustained at $400,000. “We all lost a lot of money.”
“This bank was basically run by a group of individuals like it was their personal bank to finance their speculative real estate construction activity at the expense of others,” Dorta said before Tuesday’s meeting.
U.S. Century said in a statement that the bank is in the process of reviewing the suit and is “not at liberty to discuss it further until we have completed the review process and consulted with our legal counsel.”
U.S. Century was founded by a group of prominent, largely Cuban-American investors, many of whom are local business leaders, real estate developers and attorneys.
Among the issues raised in the lawsuit, the bank acknowledges that it has made loans to current and former directors, and a third of its 24 branches are leased from current or former directors.
Current and former directors of the bank hold a significant portion of the bank’s shares, several sources said.
U.S. Century has been struggling since the real estate downturn and recession. Founded in 2002, U.S. Century is operating under a June 2011 regulatory consent order mandating it to boost capital, reduce its bad loans and return to profitability, among other requirements. Last year, it hired Japanese investment bank Nomura Securities to try to raise at least $150 million in private equity funds.
C1, privately owned by four investors, including two Brazilians, is proposing to inject $100 million of fresh capital into the combined bank.
The deal would give the growing C1 Bank 24 branches in Miami-Dade and Broward counties and nearly $1.2 billion in assets.
Shareholders approve sale of U.S. Century Bank
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Shareholders approve sale of U.S. Century Bank
