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The merger and acquisition surge in the community bank sector is in full swing, but some banks have bucked the trend.
One example is Seminole-based First Home Bank — which recently posted record quarterly earnings and completed a successful capital raise of nearly $10 million.
On earnings, the bank, a subsidiary of First Home Bancorp Inc., had $1.3 million in net income in the 2017 first quarter. That's up 45% over the same quarter of 2016, when it had $894,000, according to a statement. Assets rose 18% in the first quarter, to $179.5 million, a surge bank officials attribute to strong loan growth. The bank also set aside $1.2 million for future loan losses, which brings its total loan loss reserve to 4.1% of all loans.
“During the first quarter, we grew and strengthened our balance sheet substantially, while continuing to produce exceptional earnings,” First Home CEO Anthony Leo says in a statement. “Much of our success is attributable to the outstanding performance of our SBA Lending Division, which now places among the nation's top 10 SBA lenders.”
A few months after that announcement, First Home Bank dipped into the time machine, circa the early and mid 2000s, when banks raised capital with relative ease.
First Home Bank, in a private placement with institutional investors and select accredited investors, raised $9.4 million, according to a separate statement. The bank's initial target, Leo says in the release, was $8 million. First Home, which hired Tampa-based Skyway Capital Markets to handle the capital raise, intends to use the net proceeds of the offering for general corporate purposes and growth capital.
Skyway officials hope the First Home Bank capital raise is the first of many more it handles for community banks. The boutique investment-banking firm only recently entered the community bank sector. “Over the last year, Skyway has served as placement agent and advisor on approximately $200 million in capital transactions for financial services and real estate firms,” says Marty Traber, chairman of Skyway's capital markets group, in a statement. “Community banks are a natural extension to our success in those industries.”
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