BROOKSVILLE — A homegrown Hernando County bank is poised to make a stock deal that would give majority ownership to a South Florida real estate and pension fund investment firm.
BCOM CCB Holdings LLC has agreed to invest about $15 million in Cortez Community Bank, officials announced this week. As part of the pending agreement, BCOM would buy 8.1 million shares of common stock at $1.85 a share.
Cortez also will offer up to 177,630 shares of common stock to its existing shareholders at a price of not less than $1.85 a share. When the deal is completed, BCOM would own at least 80 percent of Cortez's outstanding common shares.
The deal in the short term will dilute "considerably" the value of current stockholders' shares, Cortez president Don Page acknowledged. But the infusion of capital is essential for the Brooksville-based bank struggling through the recession to grow in the long term, Page said.
"My first responsibility as president of the bank is to look out for the interest of the shareholders, and I believe this is a positive step in that regard," he said. "This is a saving grace."
The company's stock value climbed past $11 per share in early 2005. On Tuesday, the stock opened at 35 cents per share.
Founded six years ago during Hernando's construction boom, Cortez is suffering in large part because of commercial loans. The cash from the stock sale will help the bank deal with its troubled assets, Page said.
"We got hit hard on some subdivisions," he said. "People are having a hard time keeping up with their payments."
Cortez reported $82 million in total assets and a net loss of $4.6 million in 2009 — $2.9 million of that in the fourth quarter, said Bauer Financial, Inc. of Coral Gables.
Bauer uses federal regulatory data to rate banks based on capital-to-risk ratio, profit/loss trend, delinquent loans and other factors. The rankings range from a high of five stars to a low of zero stars.
The company gave Cortez two stars, defined as "problematic."
Nearly 22 percent of Cortez's total assets were nonperforming, such as past-due loans or foreclosed property. The bank had about $16.6 million worth of loans delinquent by 90 days or more and had repossessed real estate worth $1.3 million.
Still, the bank was still considered "well-capitalized" by federal regulators as of Dec. 31. The highest of five categories, the rating means a bank's ratio of capital to risk is 10 percent or more. Cortez's ratio is 14.4 percent.
"If the problems persisted, we probably would have been in trouble," Page said.
The sale "preserves Cortez as an independent company that can continue our mission of being a viable and healthy community banking organization," Tom Hogan Jr., chairman of the bank's board, said in a statement.
Headquartered in Miami, BCOM Inc. was founded in 1980 as a real estate development firm. Later, the company formed BCOM Investment Advisers to manage pension assets.
Page said Cortez will benefit by drawing BCOM's existing pension fund members as customers for bank services. The bank has hopes of offering additional services such as credit cards and automobile financing.
"We are very excited about the contemplated investment and the opportunity it will provide Cortez to expand its business plan," Denny St. Romain, BCOM's vice president, said in a statement.
The Cortez deal is contingent on regulatory approval and a Cortez shareholder vote slated for April. BCOM would be registered as a bank holding company.
Cortez has two branches, one in Brooksville and one in Spring Hill, and about 17 employees. All workers would remain in place, Page said.
Tony Marrero can be reached at (352) 848-1431 or firstname.lastname@example.org.