Financially strapped First Community Bank Corp. of America has struck a deal to sell itself to Community Bank of Manatee, using most of the $10 million in cash it receives to pay back a bailout loan from the U.S. Treasury.
The deal gives Bradenton-based Community Bank of Manatee a much-desired, stronger foothold in Tampa Bay. Adding First Community's 11 branches will give it a total of 17 branches in the bay area with more than $700 million in assets.
As further emphasis that its primary focus is north of Manatee, the institution has renamed itself Community Bank & Co.
In addition to the $10 million, CBM Florida Holding, the parent of Community Bank of Manatee, will also pump in $20 million in capital into Pinellas Park-based First Community.
"We needed more capital, so it was a capital-driven decision," First Community president and CEO Ken Cherven said late Friday. "In this difficult banking environment, we think it's imperative to pick a partner with significant capital."
He conceded the compensation "was not what we had hoped for, but it was the best deal we could find in this environment."
Cherven, who is expected to stay with the company, described the combined institution as "a super community bank … one of the largest and most highly capitalized community banks in the Tampa Bay region."
In early 2009, First Community was one of the first community banks in Florida to qualify for funds from the government's Troubled Asset Relief Program, the $700 billion bailout program intended to restore the financial industry to solid footing.
The $10 million from the Bradenton institution plus some cash from First Community's holding company should be enough to repay about 75 percent of the bank's TARP loan — not a full payout but a preferred scenario to a bank failure.
CBM was founded in 2008 to "acquire, capitalize and rehabilitate" Florida banks. The holding company was recapitalized by a group of private investors, led by Brazilian investor Marcelo Faria de Lima.
Last year, the Bradenton bank recruited well-known St. Petersburg banker Kathryn "Katie" Pemble as its president, setting her on a mission to build the bank's public and physical presence in Tampa Bay.
The boards of both banks have approved the merger. Pending regulatory approval and a First Community Bank shareholders meeting in April, the deal is expected to close by midyear.