Baltimore, MD (February 12, 2014) – Venable LLP announced today that it represents the acquiring bank in its potential acquisition of 1st Mariner Bank from its holding company, First Mariner Bancorp, in a transaction that will result in an approximately $100 million recapitalization of the bank. First Mariner Bancorp’s press release, a copy of which is linked here and which was issued on February 10, 2014, provides in part:
First Mariner Bancorp (FMAR) announced today that it will sell its wholly owned subsidiary, 1st Mariner Bank, to a new bank formed by investors. The sale will recapitalize the bank with approximately $100 million, enabling it to meet all state and federal capital standards, significantly improving the strength of its balance sheet, and advancing its business plan to become one of the region's leading financial institutions.
The investors, led by Priam Capital, Patriot Financial Partners, GCP Capital Partners and TFO Financial Institutions Restructuring Fund LLC, as well as several prominent members of the Baltimore business community, formed an interim bank that has signed an agreement with the holding company to acquire 1st Mariner Bank for a cash payment to the holding company, subject to a competitive bidding process for higher and better offers.
If the interim bank is the successful bidder, the agreement calls for it to acquire the bank from First Mariner Bancorp and then recapitalize the bank to a level which will satisfy all capital requirements imposed by the bank's federal and state regulators and will position the bank for future growth and prosperity. The 1st Mariner Bank name will be retained.
To facilitate the transaction, the holding company intends to file a voluntary petition in the U.S. Bankruptcy Court for the District of Maryland under Chapter 11 of the U.S. Bankruptcy Code and to sell the bank in a 363 sale in the bankruptcy.
This filing affects only the bank holding company. The bank will not file bankruptcy, will operate separately from the holding company and will conduct business as usual throughout the reorganization process. Deposits continue to be insured to the fullest extent possible by the Federal Deposit Insurance Corporation (FDIC). There will be no impact on depositors, creditors or vendors of 1st Mariner Bank.
The multi-practice Venable team included lawyers from the corporate, regulatory, bankruptcy, tax, benefits and litigation groups. Bryson L. Cook oversaw the matter; Michael D. Schiffer led the negotiations with the holding company and the bank and coordinated the project; Eric R. Smith led the negotiations with investors; John B. Beaty handled bank regulatory issues; Richard L. Wasserman handled bankruptcy matters; and others provided practice-specific advice; drafted deal, regulatory and bankruptcy documentation; performed due diligence; and otherwise assisted the team. The Venable team will continue to advise the acquiring bank through the bankruptcy proceeding and in seeking regulatory approval and, if the acquiring bank is the winning bidder in the bankruptcy auction, the team will assist in closing the transaction.
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