Bluegrass Community Bank to be bought by Monticello Banking

Published 9:48 am Thursday, February 15, 2018

Danville-based Bluegrass Community Bank will be bought by Monticello Bankshares Inc., according to a news release given to The Advocate-Messenger on Wednesday.

Monticello Bankshares Inc. is the holding company for Monticello Banking Company in Monticello; it plans acquire Bluegrass Bancorp Inc., the parent company of Bluegrass Community Bank through a merger.

“The cash transaction is subject to Bluegrass Bancorp shareholder approval and regulatory approval and is expected to close during the second quarter of 2018,” according to the release. “Monticello Bankshares will purchase Bluegrass Bancorp and its subsidiary bank for a total purchase price approximately equal to the shareholders’ equity  of Bluegrass Bancorp after accounting for certain Bluegrass Bancorp transaction-related expenses and operations up to the closing date.”

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Bluegrass Community Bank has two locations, one on Smokey Way off the bypass in Danville and one on East Second Street in Perryville.

Lowery Anderson, chairman and president of Bluegrass Bancorp, said he couldn’t speak for Monticello Bankshares, but “my understanding is that both locations will stay open and continue to operate as they have.”

“The only thing (customers are) going to see changed is access to more products and services that Monticello can offer. They’re going to have the same locations, the same people servicing them, they’ll just have more access services,” Anderson said. “Our customers should be in good shape going forward.”

Bluegrass Community Bank opened in March 2009 and was “the first bank chartered in the state of Kentucky in almost three years,” according to the bank’s website.

“The bank is the result of a vision of a group of local business and community leaders who saw the need for a locally based, locally focused community bank,” the website reads. “Armed with their vision of a new bank for this community, the group moved forward by successfully completing the chartering process including raising more than $9 million in new capital to open the bank.”

Anderson said 2009 “was probably the worst time since the Great Depression to open a financial institution.” He noted there haven’t been any banks chartered in Kentucky since Bluegrass Community Bank was chartered — a “testament” to the difficult economy that Bluegrass began in.

“The board faced the decision of whether to raise more capital or sell the institution,” he said. The board thought it was in the best interests of customers and shareholders to sell, he said.

Bluegrass customers shouldn’t see any changes from the merger “other than more options for their banking,” Anderson said.

“Monticello management has met with the current employees and they’re very excited to get started and get the acquisition closed,” he said.

Anderson said a final sale price is not known because it will depend on what Bluegrass Community is valued at when the sale closes. Shareholders will be asked to authorize the sale in March, he said.

According to the news release, Monticello Banking operates 16 locations in Barren, Casey, Clinton, Harlan, Pulaski, Russell, Warren and Wayne counties. At the end of 2017, “Monticello Banking Company had approximately $693 million in assets and $602 million in deposits.”

Kenny Ramsey, president and CEO of Monticello Bankshares, was not immediately available for comment Wednesday afternoon. Ramsey provided a statement in the news release: “We’ve very excited about the transaction with Bluegrass Bancorp and becoming part of the Danville community. The merger is a very natural fit for both Monticello Bankshares and Bluegrass Bancorp. We share the same core values of service to customers, employees and communities, and this merger will only strengthen our ability to continue providing great service.”

Anderson also provided a statement in the news release: “We’re very pleased to be partnering with Monticello Bankshares, an institution with a long history and tradition of dedication to its communities. The merger with Monticello Bankshares will allow our combined employees to continue serving our communities in a highly competitive banking market.”

In addition to Anderson, Bluegrass Community Bank’s board of directors includes Elizabeth Boyle, Wyatt L. Godfrey, Tim Kidd, William D. Ruth III, Joseph L. Sharpe, Kimberly Z. Smith and John Stomberger, according to the bank’s website.

This story will be updated as more information becomes available.