Lancaster investors withdraw application to buy Stonebridge
A group of Lancaster County investors has withdrawn its application to purchase West Chester-based Stonebridge Bank, according to information filed with state regulators.
The investors, operating as Hamilton Bancorp, Inc., have been trying to purchase Stonebridge and rebuild it as Hamilton Bank since late 2015 but have hit several regulatory bumps along the way.
A banking department spokesman declined to comment on the application beyond confirming it had been withdrawn. Several people involved with Hamilton Bank also declined to comment.
In the past, the bank has withdrawn applications then refiled them after making changes they felt would better meet regulators' demands.
The investors, led by former state Rep. Gordon Denlinger, submitted the winning bid to purchase Stonebridge in November 2015 after Stonebridge's holding company declared bankruptcy. They intended to buy the struggling bank for its charter by late summer or early fall of 2016 and rebuild it as Hamilton Bank in Lancaster County.
Hamilton's founders, however, have run into several hurdles along the way, including having to return more than $10.7 million to investors after they missed a deadline to complete the purchase last year, as well as being hit with a $190,000 fine this summer for allegedly selling unregistered securities. In an agreement with regulators, the bank did not admit or deny the allegations.
The bank's leaders have persisted, saying this summer that they and their investors were still committed to seeing the purchase through.
Denlinger hopes Hamilton will fill a void in Lancaster County, where several banks have merged into larger institutions, he told the Central Penn Business Journal in 2015. The Hamilton moniker, in fact, is a call-back to a former Lancaster bank of the same name.
Hamilton is far from the only bank eyeing the Lancaster area, where institutions like Orrstown, Mid Penn, PeoplesBank and Centric have all looked to expand their footprint since the loss of Susquehanna, Metro and National Penn banks.
Purchasing a struggling bank's charter, then renaming and relocating it, would be easier than starting a bank from scratch, Denlinger, who worked in finance before entering politics, said at the time.
The investors behind the planned Advantage Bank expect to use a similar strategy as they try to kindle another new bank in the midstate, they said in November.