As industry shrinks, a Tampa bank launches its first capital raise in more than a decade

Jul 24, 2017

First Citrus Bancorporation Inc. has launched its first capital raise since 2003.

The Tampa bank, with five offices and $334.1 million in assets, plans to raise $7.2 million, a July 20 filing with the U.S. Securities and Exchange Commission said.

First Citrus (OTC: FCIT), is selling stock, primarily to its clients, at $18 a share. That's at a slight discount to the $18.40 a share the stock closed at Thursday on the over-the-counter exchange.

Extra capital allows community banks such as First Citrus to increase lending to the small and mid-size businesses that make up much of their customer base. That allows the borrowers to hire more workers, buy real estate or equipment, and grow their businesses.

"We'll be able to serve more of the market's financial needs with more capital. That's very important to our board and our associates given the exodus of community banks," said Jack Barrett, president and CEO.

Nine banks headquartered in Tampa Bay have sold or agreed to a sale in the past year, while several of those that remain have been boosting their capital cushions.

First Home Bancorp in Seminole raised $9.4 million in equity in a private placement that wrapped up this month, while USAmeriBank and HomeBancorp each raised $15 million in debt offerings earlier this year.

Each of the banks are Small Business Administration lenders, and have been growing their SBA lending programs. The SBA's 7(a) program, which provides financing for general business purposes, has surged in recent years as more lenders get into the business, American Banker reported.

First Citrus had $283.2 million in total loans outstanding as of June 30, up 20 percent from the same day a year earlier. That boosted income from interest, and was part of the reason net earnings jumped 275 percent year-over year, to $544,000, or 33 cents a share, for the quarter ended June 30. The bank had $145,000 in net income, or 9 cents a share, in the second quarter of 2016.

"We've been having a good run of growth and we anticipate that continuing," Barrett said. He expects the bank's assets to grow to $400 million next year and $500 million the following year.

Industry observers have questioned whether banks with less than $1 billion in assets can survive in a consolidating sector.

Barrett said First Citrus is making money because it invested in the staff and management talent needed by a larger bank two years ago, and it's now seeing operating efficiencies and economies of scale that are resulting from that investment.

The equity offering by First Home Bancorp was oversubscribed, which highlights the rebound in the banking industry in Tampa and in much of Florida, American Banker said.

First Home worked with an investment banking firm, Skyway Capital, and sold stock to institutional investors as well as some area individuals.

First Citrus is taking a different approach.

"We've never had institutional investors or private equity investors. We've always had our clients own our stock. They haven't had a chance to have a bite of the apple since 2003, and we want them to," Barrett said. "We're still a small bank and we want to integrate the right shareholders."

See original article in Tampa Bay Business Journal
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13850 Sheldon Road | Tampa, FL 33626

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4302 West Kennedy Blvd. | Tampa, FL 33609

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4240 Henderson Boulevard | Tampa, FL 33629

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