Blue Ridge Bankshares, Inc. Announces the Signing, Closing and Funding of Amended and Restated Definitive Purchase Agreements for $150 Million in a Private Placement of Common and Preferred Stock
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The capital infusion of $150 million into Blue Ridge Bankshares is a significant financial maneuver that can have substantial implications for the company's strategic positioning and financial stability. From a financial perspective, the use of proceeds to enhance capital levels is a proactive step towards satisfying regulatory requirements, notably the capital ratios mandated by the Office of the Comptroller of the Currency. This move is likely to be viewed positively by investors as it suggests a commitment to maintaining a robust balance sheet.
Moreover, the decision to reposition business lines indicates an adaptive strategy, potentially aiming to optimize the bank's operations in response to market demands or regulatory changes. Supporting organic growth is an indicator of a long-term investment in the bank's core capabilities, which may lead to increased revenue and market share over time. However, investors should monitor the effectiveness of these strategic initiatives in contributing to the bank's performance, as well as the potential dilution of existing shares due to the issuance of new stock.
Blue Ridge's strategic initiatives, as funded by this capital raise, reflect an intent to strengthen its position within the community banking sector. The repositioning of business lines could be an effort to capture niche markets or to diversify services to reduce risk. For stakeholders, the success of these initiatives is contingent upon the bank's ability to identify and effectively serve emerging customer needs, which could differentiate it from competitors.
It's important to note that the private placement supersedes a previous transaction, indicating a pivot in fundraising strategy. This could suggest that Blue Ridge is actively managing its capital structure to navigate unforeseen challenges, such as the shareholder inquiry mentioned. Stakeholders should consider the implications of such inquiries on governance and investor relations, as they may influence market perception and confidence in the bank's management.
The banking industry is heavily regulated and Blue Ridge's actions demonstrate an awareness of the importance of compliance with regulatory standards. Enhancing capital levels not only satisfies regulatory requirements but also serves as a buffer against potential financial downturns. This is particularly relevant in the context of community banks, where capital adequacy is critical to maintain trust and local market presence.
Stakeholders should be aware that while the capital raise may address the immediate needs outlined by the Consent Order, it is also indicative of previous regulatory concerns. The ability of Blue Ridge to effectively navigate these concerns and improve its regulatory standing will be a key factor in its long-term success and could impact investor sentiment. Continuous monitoring of the bank's regulatory compliance and the performance of its repositioned business lines will be essential for assessing future financial health and stability.
Capital expected to allow the bank to reposition business lines, support organic growth and further enhance capital levels of the core community bank
This Private Placement supersedes and replaces the
"Although we believe we had nearly satisfied the appropriate closing conditions of the Previous Transaction, we received a shareholder inquiry that has raised questions about how votes were tabulated by an outside party on the articles amendment proposal at the shareholders meeting that made it difficult to move forward in a timely fashion, so we felt the best path was to adjust the offering structure," said President and CEO, G. William "Billy" Beale. "We appreciate the commitment of the investors from the Previous Transaction to
The Private Placement
Pursuant to the securities purchase agreements, the Company has issued 3.4 million new common shares at a price of
Upon receipt of requisite shareholder approvals for both the (i) issuance of common shares in the Private Placement in excess of
Assuming the conversion of all shares of Series B preferred stock into common shares and accounting for the common-equivalent value of the Series C preferred stock, the Company would have issued 60 million shares of common and common equivalent shares at a
The Private Placement was led by Kenneth R. Lehman, a private investor, with many years of experience investing in banks, with participation from Castle Creek Capital Partners VIII L.P. ("Castle Creek"), other new and existing institutional investors, and certain
With the closing of the Private Placement,
Advisors on the Offering
Piper Sandler & Co. acted as sole placement agent for the Private Placement. Williams Mullen served as legal counsel to the Company and Troutman Pepper Hamilton Sanders, LLP served as legal counsel to the placement agent. Fenimore Kay Harrison LLP served as legal counsel to Mr. Lehman and Sidley Austin LLP served as legal counsel to Castle Creek.
Forward-Looking Statements
This release of Blue Ridge Bankshares, Inc. contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of the Company's beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and are typically identified with words such as "may," "could," "should," "will," "would," "believe," "anticipate," "estimate," "expect," "aim," "intend," "plan," or words or phases of similar meaning. The Company cautions that the forward-looking statements are based largely on its expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company's control. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements.
The following factors, among others, could cause the Company's financial performance to differ materially from that expressed in such forward-looking statements: (i) the strength of
The foregoing factors should not be considered exhaustive and should be read together with other cautionary statements that are included in filings the Company makes from time to time with the SEC. Any one of these risks or factors could have a material adverse impact on the Company's results of operations or financial condition, or cause the Company's actual results, performance or achievements to differ materially from those expressed in, or implied by, forward-looking information and statements contained in this release. Moreover, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict all risks and uncertainties that could have an impact on its forward-looking statements. Therefore, the Company cautions not to place undue reliance on its forward-looking information and statements, which speak only as of the date of this release. The Company does not undertake to, and will not, update or revise these forward-looking statements after the date hereof, whether as a result of new information, future events, or otherwise.
Important Information about the Transactions and Where to Find It
Security holders may obtain free copies of these documents, once they are filed, and other documents filed with the SEC by
Certain investments discussed above involve the sale of securities in private transactions that will not be registered under the Securities Act of 1933, as amended, and will be subject to the resale restrictions under that Act. Such securities may not be offered or sold absent registration or an applicable exemption from registration. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
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SOURCE Blue Ridge Bankshares, Inc.
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