C1 Financial, Inc. (NYSE:BNK), a Florida commercial bank with principal offices in St. Petersburg, Florida, plans to raise $50 million in its upcoming IPO.
The firm will offer 2.6 million shares at an expected price range of $18-$20 per share. If the IPO can reach the midpoint of that range at $19 per share, BNK will command a market value of $303 million.
Filing, Underwriting Details
BNK filed on July 11, 2014.
Lead Underwriters: Keefe, Bruyette & Woods, Inc.; Raymond James and Associates, Inc.
Underwriters: Hovde Group, LLC; Monroe Financial Partners, Inc.; Sandler O'Neill & Partners, L.P.; Wunderlich Securities, Inc.
Summary: Growing Number of Florida-Based Banking Centers
BNK is a commercial bank operating 28 banking centers, as well as a loan production office on the West Coast of Florida and in Orange and Miami-Dade Counties. The bank's central focus is providing banking services to entrepreneurs, including commercial loans and depository products. The bank is the 20th-largest in Florida in terms of assets, with $1.4 billion in assets as of June 30, 2014.
BNK has pursued a series of acquisitions in recent years in order to expand its presence in Florida. The firm acquired First Community Bank of America in 2011, adding 11 banking centers and $434 million in assets, and The Palm Bank in 2012, adding three banking centers and $119 million in assets. The firm also assumed $241 million in assets and $237 million in deposits of the failed First Community Bank of Southwest Florida from the FDIC in 2013.
BNK offers the following figures in its S-1 balance sheet for the six months ended June 30, 2014:
Net Income: $2,756,000.00
Total Assets: $1,449,214,000.00
Total Liabilities: $1,309,023,000.00
Stockholders' Equity: $140,191,000.00
BNK has expanded its assets and deposits rapidly in recent years. The firm grew its assets from $260 million as of December 31, 2009 to $1.4 billion as of June 30, 2014; over the same period, the firm grew its deposits from $219 million to $1.1 billion. The firm has also expanded its new loan origination from $84 million in 2010 to $418 million in 2013.
Hot Competition in the FL Banking Sector
BNK competes with numerous other firms offering commercial banking services in Florida, many of which have access to significantly greater financial resources than BNK. As such, some of the bank's competitors are able to offer financial products that BNK is unable to provide, and have higher lending limits. Many competitors also have a far larger geographic footprint than BNK, operating statewide or nationwide.
Management: A 2013 Ernst & Young Florida Entrepreneur of the Year
Trevor R. Burgess has served as BNK's CEO since April 1, 2012; he joined the bank as a member of its board in December 2009. Mr. Burgess previously worked for nearly a decade as a managing director for Morgan Stanley & Co. LLC. He also worked as a management consultant at Monitor Company. Mr. Burgess earned his Bachelor's degree from Dartmouth College in 1994. In 2013, he was named the Ernst & Young Florida Entrepreneur of the Year in the Financial Services Category.
Conclusion: Carefully Consider Buying In
We are neutral on this IPO.
BNK has attained profitability, and the firm certainly has made impressive progress in terms of growing its assets and its deposits.
The firm's efforts to expand its geographical footprint through relatively low-cost acquisitions of struggling banks have already borne fruit, and we believe that BNK's continuing commitment to establish connections to its community through the sponsorship of local sports teams and other community-oriented activities will pay dividends.
However, we believe that investors remain wary of banking-related stocks in the aftermath of the Great Recession, meaning that this stock could be slow out of the gate.
While solid, BNK's underwriters are not the most illustrious.
We suggest investors exercise caution in considering this IPO.
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Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.