The investors buying 1st Mariner Bank said Monday that they've received the regulatory approvals they need and expect to close on the deal as soon as next week, turning the page on the Baltimore institution's most tumultuous chapter.

The purchasers — who go by the name RKJS Bank — said they will put about $91 million in cash into the bank to recapitalize it, "significantly improving the strength of its balance sheet."

The Federal Deposit Insurance Corp. and Maryland's financial regulation agency both approved the transaction. The approvals were the last major hurdle for a deal that's been a long time in coming.

Howard Feinglass, a Baltimore native who heads New York investment firm Priam Capital, and Baltimore bankers Robert D. Kunisch Jr. and Jack E. Steil have worked to get a stake in 1st Mariner for more than three years.

The group they formed, a mix of local and out-of-state players, prevailed in an April auction of the bank overseen by the U.S. Bankruptcy Court. 1st Mariner isn't in bankruptcy, but its parent company filed for that protection in February.

RKJS expects to close sometime this month, tentatively next week. The buyers' goal is to make the long-struggling 1st Mariner a leading financial institution in the region.

"It's been a long road for everybody," said Kunisch, the incoming president and chief operating officer. "Come next week, you're going to have a viable locally operated bank in Baltimore … that will be open for business and looking for clients."

Both he and Steil, the incoming chairman and CEO, are among the local investors. Others include Josh Fidler, co-chairman of real estate developer Chesapeake Realty Partners in Owings Mills, and Hunt Valley private-equity firm Keyser Capital.

Mark Kaufman, Maryland's commissioner of financial regulation, said he's pleased to see outside institutional capital flowing to a Baltimore bank — and very happy that 1st Mariner will at long last have enough money to grow.

"For the market, this is terrific," he said. "Having the largest [local] institution in this market be troubled is not good for anybody."

The bank's parent, First Mariner Bancorp, was buffeted by "Alt-A" mortgages — neither prime nor subprime — that went bad after the housing boom. It worked for years to improve its situation but finally filed for bankruptcy protection after missing a deadline to pay millions of dollars in interest payments to creditors.

Despite those woes, the RKJS group saw value in the bank. It's a Baltimore institution in a market where bigger locally owned banks were gobbled up by out-of-state competitors.

Founded in 1995, 1st Mariner has about $925 million in deposits and 16 branches in Baltimore city and county as well as Anne Arundel, Carroll, Harford and Howard counties. It employs about 430 people.

Kunisch said the cash infusion will make 1st Mariner "adequately capitalized," according to FDIC rules. The incoming team expects that the regulatory order the bank is operating under will be lifted, but not immediately, because 1st Mariner would need to undergo exams by the FDIC first.

Kunisch said so much of the effort to buy 1st Mariner involved elements outside his and Steil's control. The most dramatic example was when the bank's parent company declared that a competing bidder won the auction — a decision reversed after the RKJS group convinced creditors that it was willing to pay more and had the wherewithal to get the deal done.

The final purchase price, including an escalation clause that kicked in, is about $18.7 million.

Now, Steil says, comes the part he's been waiting for.

"We go to work," he said. "We stop dialing for dollars, and we start actually working as bankers."

jhopkins@baltsun.com

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