The Lancaster investor group looking to buy Stonebridge Bank has withdrawn federal and state applications to buy the bank, but intends to revise and refile the applications.
After its purchase, the group plans to move the bank to Lancaster County and rename it Hamilton Bank.
Former state Rep. Gordon Denlinger, who is heading up the investment group, said the plan is to resubmit the applications by July 15.
“There are some structural changes, though the underlying project remains virtually unchanged,” Denlinger said.
Mark McCollom, co-head of financial institutions for consulting firm Griffin Financial Group, said the issues were minor and have been corrected to a structure more in line with what the group believes regulators are asking for.
In the meantime, the regulatory snag has complicated the bank’s fundraising, McCollom said.
When the group was raising capital initially, the subscription documents listed a May 31 deadline for buying Stonebridge. When the group missed that date, it had to return to investors the $10 million it had raised.
McCollom said the investment group reached out to each investor to let them know what happened.
“The biggest question we got, I’d say, was people asking, ‘So you didn’t raise enough, huh?’ That wasn’t the case,” McCollom said. “When we told them what happened and how we’re going about it now, they were still enthusiastic about the bank.”
Once the group resubmits its application to be granted a bank charter, it can raise the money again. Both Denlinger and McCollom expected the original investors to invest again.
The group won the right to buy Stonebridge when the bank went up for sale in a bankruptcy auction in November. The investment group’s bid of $570,000 persuaded the bankruptcy court to grant it permission to buy the bank’s assets, though the group also needs permission from federal and state regulators.