West Chester based bank holding company Stonebridge Financial Corp. announced on Tuesday that it had reached an agreement to sell its wholly owned subsidiary, Stonebridge Bank pending regulatory approval.

Stonebridge Financial Corp. filed a voluntary petition in the United States Bankruptcy Court for the Eastern District of Pennsylvania back in June, stating that it was taking the action “in order to significantly strengthen the bank’s balance sheet and improve its financial position as a well-capitalized bank.”

“The sale of Stonebridge Bank through the 363 sale process will create a bank poised for growth,” said Daniel J. Machon, Jr., President and CEO of Stonebridge Financial Corp. and Stonebridge Bank. “Upon approval by the regulatory authorities, the bank will continue its mission to create a strong and secure community bank.  Upon closing, the bank’s balance sheet and financial position should be greatly improved.”

There was no need to wait long for offers, as a group of investors made what is known as a ‘stalking horse bid’ to buy the bank within a day of the bankruptcy announcement. The court approved the sale of the bank to the highest and best qualified bidder under section 363 of the Bankruptcy Code on Monday.

Pending regulatory approval, the group of investors that have already signed the purchase agreement, intends to close on the proposed transaction during the second quarter of next year.

“We are very excited with the opportunity ahead of us. The recent merger activities in the marketplace, and expectations of further consolidation, have created an opening for a locally-owned and based community bank in the south-central Pennsylvania region,” said lead investor and former State Representative, Gordon Denlinger. “We are pleased that Stonebridge Bank, pending regulatory approval, will be the platform from which to execute our vision and mission.”