Survival plan mapped for Mile High Banks

LONGMONT – Mile High Banks will receive up to $1 million from Strategic Growth Bancorp Inc. while the bank’s holding company goes through Chapter 11 reorganization, according to U.S. Bankruptcy Court filings.

Dan Allen, president of the Longmont-based bank, said last week that Mike High Banks will be sold to and recapitalized with $90 million in new capital from Strategic Growth Bancorp., an El Paso, Texas,-based bank holding company. Mile High owes more than $43 million in debts, according to the bankruptcy court document.

All of Mile High Banks’ stock will be bought by Strategic Growth Bancorp for $5.5 million, subject to a court-ordered competitive bidding process. The Longmont-based bank’s name and brand will not change, Allen has said.

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The bank’s parent company, Big Sandy Holding Co. in Limon, is going through voluntary Chapter 11 reorganization, a process that could take 90 days, said Fred Joseph, commissioner at the Colorado Division of Banking. Other bidders may come forward in the bank sale process, Joseph said.

Mile High Banks operates independently from the holding company.

Mile High Banks currently has equity capital of $22 million, Allen has said. The bank has been operating under federal regulatory supervision since Dec. 1, when the Federal Deposit Insurance Corp. issued a “supervisory prompt correction action directive” calling for the bank to find more capital.