Two Maryland banks that announced plans to merge in April have extended the deadline for completing the deal as they await approval from the Federal Reserve Board.
Jefferson Bancorp of Lutherville and Carrollton Bancorp (CRRB) of Columbia announced Friday that they have agreed to extend the deadline for terminating the deal until Feb. 28. Under their original merger agreement, either side could have called off the deal if it was not completed by Dec. 31.
Jefferson, a private-equity backed company formed in 2010 to buy up banks, announced in April that it would by the much-larger Carrollton for about $25 million. Once the sale is completed the $365 million-asset Carrollton would be merged into Jefferson's thrift subsidiary, Bay Bank, creating a roughly $500 million-asset bank with a dozen branches in the Baltimore area.
In a news release Friday, the companies said that the Fed has delayed approval of the deal while it reviews Jefferson's ownership structure The company is largely owned by an affiliate of the Washington investment bank Hovde Financial and its ownership structure was approved by the Office of Thrift Supervision, which was eliminated last year as part of the Dodd-Frank Act The Office of the Comptroller of the Currency has also advised the banks that it would stop processing the merger application until the Fed acts.
"Jefferson has advised Carrollton that it expects to be able to satisfactorily resolve all of the issues raised by the Federal Reserve Board and the OCC to date, but that there cannot be any assurance that such previously raised issues can be satisfactorily resolved or that such agencies will not raise additional issues that cannot be satisfactorily resolved," Carrollton said in a news release.
Also on Friday, Carrollton announced that its chief financial officer, Mark A. Semanie, plans to resign early next year to pursue other opportunities. Semanie was slated to become CFO of the combined company, but Carrollton said Friday that when the deal closes Jefferson's CFO, David Borowy, would be appointed interim CFO until a permanent one is found.
The companies said that they do not believe Semanie's resignation to affect the approval process.