C1 Bank pitches $50 million IPO

mjohnson@bradenton.comJuly 15, 2014 

MANATEE -- A little community bank that worked out of five Bradenton area branches during its early years may be signaling that it's ready for a multibillion-dollar growth spurt as it pursues an initial public stock offering.

St. Petersburg-based C1 Bank, which started its life as Community Bank of Manatee 19 years ago, is out to raise up to $50 million in the offering, which is under review by the Securities and Exchange Commission. The $1.4 billion bank is raising the money through its holding company, C1 Investments Inc. At present, just over 500 stockholders control about 93 million shares in the company.

Contacted to comment on the filing, C1 chief executive officer Trevor Burgess said bank officials are in a "quiet period" mandated by the SEC and cannot talk about the putative offering or bank operations.

One person who is familiar with bank and with the Florida banking industry who did talk about the deal is Ken Thomas, a Miami-Dade-based bank consultant and economist. He said the IPO is a sign of a bank that wants to grow aggressively.

He said going public will saddle C1 with millions of dollars of new, annual regulatory costs, but the payoff will come in new business.

"It sends a message to the banking community that this bank plans to grow much more aggressively," Thomas said.

In its IPO registration filing, C1 claims to be the 20th largest bank based in Florida and to be "near the top 1 percent" of the fast

est growing banks in the United States.

The filing leaves vague how proceeds from the stock sale will be used and when the sale will start. C1 states only that it will use the money for "working capital and other corporate purposes." The filing states that the bank has no current plans to make capital investments or material investments. It would be traded under the symbol "BNK."

Thomas said a $50 million cash infusion could support a half-billion dollars in growth. He said he would not be surprised to see C1 heading for $2 billion in total assets by year's end.

C1 has 28 banking centers in Manatee, Sarasota, Pinellas, Hillsborough, Charlotte, Pasco, Lee and Miami-Dade counties. It owns 18 of these centers and leases 10. The bank is run by approximately 215 employees working out of a total of 212,000 square feet. It opened its newest branch in downtown Sarasota in May.

The bank was headquartered in Lakewood Ranch until late 2012, when it moved its corporate operations to St. Petersburg.

William Sedgeman Jr. founded Manatee Community Bank in 1995. In the midst of the recession in 2009, Burgess and three other investors made a major capital investment in the bank and renamed it C1 Bank. At the time, C1 was worth about $260 million.

Following the investor buy-in, the bank acquired a bigger book of business by purchasing First Community Bank of America in 2011 and The Palm Bank in 2012. It also took on $247 million in assets of First Community Bank of Southwest Florida in 2013 after the FDIC declared First Community a failed bank.

An attempted merger between C1 and Miami-Dade-based U.S. Century Bank in 2012 failed to gel, but C1 still established a branch in that county.

That merger attempt may have been C1's first shot at getting the banking community to take its emphasis on growth seriously.

"This is now them sending a second message that 'we are a player,'" Thomas said, predicting that C1 may be aiming to reach the $5 billion tier in the next three to five years.

Marcelo Faria de Lima, a Brazilian businessman and the biggest investor in C1, owns 30.77 percent of the company. Burgess, a former investment banker, owns 9.49 percent. The top five investors in the company control 71.5 percent of C1 stock.

C1 Bank's top three executives -- Burgess, president Kathryn Pemble and chief operating officer Rita Lowman -- will be paid a combined $532,697 in base salaries in 2014. With bonuses, Burgess earned $639,500 in 2013, according to the SEC filing.

Sedgeman, the company's founder, remains as the chairman of C1's board of directors. He also works as a senior lender for the bank.

C1 Bank wrote $418 million in new loans in 2013. The bank has also established a technology division, C1 Labs, which has filed seven patent applications for financial technology products.

The bank has plans to expand its operations in the near future. It has announced new banking centers expected to open in Coral Gables and Doral.

Matt M. Johnson, Herald business reporter, can be reached at 941-745-7027, or on Twitter @MattAtBradenton.

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