Mile High Banks to be sold, recapitalized
All of Mile High Banks' stock will be bought by Strategic Growth for $5.5 million, subject to a court-ordered competitive bidding process, according to the bank's news release. The Longmont-based bank's name and brand will not change, President Dan Allen said.
With the $90 million in new capital, the bank will meet capital requirements set by federal banking regulators and will be able to resume making loans, Allen said.
"This will position the bank to grow its footprint and have the capital we need to bring additional financial products to our customer base," Allen said. "We're really excited about the transaction."
The bank's parent company, Big Sandy Holding Co. in Limon, will ask for court approval to sell the bank's common stock to Strategic Growth.
The process will be conducted under the supervision of the U.S. Bankruptcy Court in Denver following a Chapter 11 filing by the holding company.
"This transaction is the most effective way to recapitalize and position the bank ... all without financial assistance from the government or taxpayers," Allen said in the news release.
Other qualified bidders will be given the chance to submit competing bids for the stock being sold. Any qualified bidder also would be required to recapitalize the bank to an appropriate level and to demonstrate the ability to promptly receive required regulatory approvals, Mile High said.
Mile High Banks currently has equity capital of $22 million, Allen said. The FDIC notified the bank on Aug. 5, 2011, that it was undercapitalized.
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