State and federal banking regulators are looking for potential buyers for Heritage Bank of Florida, indicating they may close the small, Lutz-based bank.
An FDIC marketing document provided to potential buyers says the Division of Financial Institutions may close Heritage Bank in the near future and appoint the FDIC as receiver. It offers prospective buyers a chance to review Heritage Bank's financial details and gives them a couple of options for buying it.
The Florida's Division of Financial Institutions typically intervenes when a state-chartered bank fails. It is a unit of Florida's Office of Financial Regulation.
The FDIC and the Office of Financial Regulation both declined comment.
Two Heritage Bank officials, bank Chairman Clyde Hobby and Chief Executive Officer Richard Adams, did not return calls.
Heritage Bank was founded in 1999 and operates three branches in Tampa, Lutz and Wesley Chapel. It has total assets of about $227 million.
Its recent financial filings show the bank has lost money and dealt with a shortage of capital. For example, it lost $7.5 million in the quarter that ended June 30 and reported a "Tier 1 capital ratio" — basically, how much capital it has when compared to total assets – of just 0.51 percent, according to its most recent financial report.
These days, experts say banks should have a Tier 1 Capital ratio of 8 percent to be considered well capitalized.
Two years ago, the FDIC ordered Heritage Bank to take a series of steps to improve its financial health and operations, including increasing its equity capital and improving the bank's management.
According to the FDIC's marketing document, the agency offers potential buyers two options for purchasing Heritage Bank: either by assuming all of its assets or by entering into a "loss share" agreement with the FDIC.
In the latter case, the FDIC may agree to cover a certain amount of losses that the buyer incurs if too many troubled loans go sour.
Theoretically, the bank's leaders could save the bank if they find a quick source of money. But, that seldom happens once the FDIC starts marketing a bank for sale, said Russ Hunt, an investment banker in Tampa who advises banks.
"A very small number of banks could come back from the brink at that point," Hunt said.
If the state closes Heritage Bank and appoints the FDIC as receiver, customers' accounts would be shifted over to the new acquiring bank. In other recent bank closures, a bank typically was shut down on a Friday and the acquiring bank started operating the closed bank's branches by the following Monday.
The FDIC insures deposits up to $250,000.
If shut, Heritage Bank would be the first bank based in the Tampa area closed by regulators this year. However, regulators have shut seven other Florida-based banks this year, including two last week, First East Side Savings Bank of Tamarac and GulfSouth Private Bank of Destin.