The parent company of Virginia Commonwealth Bank is planning to combine with Blue Ridge Bankshares in an all-stock merger that would create the fourth largest community bank in Virginia with $2.4 billion in assets.
Henrico County-based Bay Banks of Virginia Inc. announced the planned merger with Charlottesville-based Blue Ridge Bankshares Inc., the parent of Blue Ridge Bank, on Thursday.
The companies said the boards of both holding companies have unanimously approved the deal. Shareholders will have to vote on the merger, which also requires regulatory approval. The companies said they plan to close the deal in the first quarter of 2021.
Terms of the merger agreement call for Bay Banks shareholders to receive 0.50 shares of Blue Ridge common stock for each share of Bay Banks common stock they own. Bay Banks shareholders would own 54% of the combined company while Blue Ridge shareholders would own 46%.
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The combined company and bank would operate under the Blue Ridge name and trade under the ticker symbol “BRBS” on the New York Stock Exchange.
The holding company will have its headquarters in Charlottesville, but the Blue Ridge Bank subsidiary will be based in Henrico.
The companies said they have identified $8.2 million dollars in expected net cost savings from merging the operations. About 75% of those saving would be realized in 2021.
Bay Banks became the holding company in April 2017 of Virginia Commonwealth Bank and Bank of Lancaster, when the two 80-plus-year-old community banks merged, operating under the Virginia Commonwealth Bank name.
It has 18 banking offices in the Richmond region, the Northern Neck region, Middlesex County and the Hampton Roads area. Bay Banks is also the holding company for VCB Financial Group Inc.
Blue Ridge Bank has 14 branches primarily in the Piedmont, Southside, and Shenandoah Valley regions of Virginia. It also operates one branch under the name Carolina State Bank in Greensboro, N.C. The company also has 13 mortgage offices in Virginia and North Carolina.
The combined bank would have 33 branches, about $1.9 billion in loans and $2.2 billion in deposits, ranking it fourth in deposit market share for community banks with less than $10 billion in assets in Virginia.
Brian K. Plum, the chief executive officer of Blue Ridge, will continue as CEO of the combined company. Randal R. Greene, the CEO of Bay Banks, will become the chief operating officer of the combined company and CEO of Blue Ridge Bank.
Executives with both companies said the merger would enable the banks to better serve community customers.
“This combination creates additional resources to invest in our communities and the technologies necessary to maintain and improve upon our core commitment to providing responsive, client-centric financial services,” Plum said in a statement.
In December, Blue Ridge Bankshares completed its merger with Virginia Community Bankshares Inc., the holding company for Virginia Community Bank, valued at about $42.5 million.