Acquisition of Mile High Banks completed
The division approved the transaction Dec. 20, and it wrapped up at the end of 2012, said Fred Joseph, the division's commissioner. Strategic Growth Bancorp in El Paso, Texas, was to buy Mile High Banks' stock for $5.5 million, subject to a court-ordered bidding process, according to U.S. Bankruptcy Court documents filed last fall.
Longmont-based Mile High Banks is expected to keep its name and brand, Dan Allen, president of the bank, has said in the past. Neither Allen nor Ken McCormick, president and chief executive of Strategic Growth Bancorp., were available for comment Thursday. Strategic Growth Bancorp is a bank holding company.
Mile High Banks was to be recapitalized with $90 million in new capital from Strategic Growth Bancorp, according to bankruptcy court documents. The bank's parent company, Big Sandy Holding Co. in Limon, went through voluntary Chapter 11 reorganization. Mile High Banks operates independently from the holding company, according to information from the bank.
Mile High Banks' three local branches - one in Boulder and two in Longmont - were open Thursday. A person who answered the phone at the Boulder branch referred questions about the sale and any possible name changes to the Longmont headquarters, where requests for comment were not returned. Mile High Banks has 13 branches in all.
The bank operated under federal regulatory supervision for about a year, after the Federal Deposit Insurance Corp. issued a "supervisory prompt correction action directive" calling for the bank to find more capital. An FDIC spokesman did not return a call for comment before the Boulder County Business Report's midday deadline Thursday.
The strategy of putting bank parent company Big Sandy Holding Co. through bankruptcy saved the bank from failure, said Tennyson Grebenar, a banking analyst affiliated with the Denver law firm Rothgerber Johnson & Lyons LLP.
The relatively unique strategy saves taxpayer dollars otherwise associated with failed banks, Grebenar said, since the FDIC generally insures customer deposits up to $250,000.
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