Benzinga | Jul 14, 2021 04:32PM EDT

Blue Ridge Bankshares And FVCBankcorp Announce All-Stock Merger Of Equals; FVCB Shareholders To Receive 1.1492 Shares Of Blue Ridge Stock



CHARLOTTESVILLE, Va. and FAIRFAX, Va., July 14, 2021 /PRNewswire/ --



* Enhanced Scale to Drive Increased Growth and Profitability: Strengthens core franchise to create 4th largest Virginia-headquartered community bank¹

* Strong, Affluent, Growing Markets of Operation: Strong, affluent growth markets across Virginia, Maryland and North Carolina

* Enhanced Revenue Streams with Increased Sources of Fee Income: Specialty business lines, including mortgage, SBA, government contracting and FinTech partnerships

* Powerful Operating Leverage: Top-tier metrics with meaningful capital generation and flexibility

* Creation of a Stronger Franchise with Greater Scarcity Value: Establishment of a powerful middle-market franchise not currently operating in Virginia with best talent from both franchises

Blue Ridge Bankshares, Inc. (NYSEAM:BRBS) ("Blue Ridge"), the parent company of Blue Ridge Bank, National Association ("Blue Ridge Bank"), and FVCBankcorp, Inc. (NASDAQ:FVCB) ("FVCB"), the parent company of FVCbank, jointly announced today that they have entered into a definitive agreement pursuant to which the companies will combine in an all-stock merger of equals to create the 4th largest Virginia-headquartered community bank¹ based on assets.

The transformational partnership will create greater scale to drive growth, improve profitability and enhance shareholder value. The transaction leverages complementary market positions and creates a statewide institution with a presence in key Virginia markets. The combination enhances revenue streams with increased sources of fee income and complementary product lines. The opportunities for improved profitability and enhanced revenue streams should create meaningful capital generation to support further technology initiatives and FinTech partnerships.

Under the terms of the definitive merger agreement, which was unanimously approved by the Boards of Directors of both companies, FVCB shareholders will receive 1.1492 shares of Blue Ridge common stock for each share of FVCB common stock they own. FVCB shareholders will own approximately 47.5% and Blue Ridge shareholders will own approximately 52.5% of the combined company on a fully diluted basis.

The combined company will be headquartered in Fairfax, Virginia and will maintain significant operation centers in other markets.

"This partnership creates a powerful and innovative financial services provider better able to serve its clients and communities of today and tomorrow," said Brian K. Plum, President and Chief Executive Officer of Blue Ridge. "The team at FVCB has built and maintains a high quality banking franchise, and there is no better team with which to unite to capitalize on the opportunities presented by an evolving industry."

"We are thrilled to be partnering with Blue Ridge Bankshares in this merger. Over the past couple of years, the growth initiatives and investments Blue Ridge has made has resulted in expanded profitability and a differentiated platform. Our two companies complement each other beautifully and the combined company will be a formidable competitor across our markets," said David W. Pijor, Chairman and Chief Executive Officer of FVCB. "We believe this merger will enable us to serve our customers with additional products and services, including increased lending capacity and capabilities. As part of a larger and more diverse institution, our employees will have additional opportunities to grow, learn, and develop their careers. Our shareholders should benefit from our increased profitability, liquidity, and increased market capitalization. We look forward to continuing to grow this company across our markets."

Includes community banks headquartered in Virginia with less than $100 1)billion in total assets; excludes Capital One Financial Corporation due to asset size greater than $100 billion; based on total assets as of March 31, 2021

Financially Compelling Transaction for All Shareholders

Top-Tier Profitability: On a pro forma basis, the combined company targets delivering top-tier operating performance, with an estimated 2022 ROAA of approximately 1.4% and an ROATCE of approximately 15%+.

Significant Earnings Per Share Accretion: The transaction is targeted to deliver 16%+ EPS accretion to Blue Ridge in 2022 and 2023, respectively, and 12%+ EPS accretion to FVCB in 2022 and 2023, respectively (shown illustrative for 100% achievement of cost savings).

Manageable Tangible Book Value Per Share Dilution: The mid-single digit tangible book value per share dilution to Blue Ridge is expected to be earned back approximately two years from closing.

Strong Combined Capital Levels: The combined company is expected to have a Common Equity Tier 1 Capital ratio of above 11% at closing. The combined company's targeted strong capital ratios are designed to support growth and capital management strategies.

Governance and Leadership

Reflecting the significant contribution both partners bring to the combined company, the board and executive management team will draw from both sides:

* David W. Pijor, Chairman and Chief Executive Officer of FVCB, will be the Executive Chairman of the combined company

* Brian K. Plum, President and Chief Executive Officer of Blue Ridge, will continue in the role of Chief Executive Officer of the combined company

* Patricia A. Ferrick, President of FVCB, will be the President of the combined company and the President and Chief Executive Officer of the combined bank

* Jennifer L. Deacon, Chief Financial Officer of FVCB, will be the Chief Financial Officer of the combined company

* The Board of Directors of the combined company will consist of 16 directors -- eight Blue Ridge Board members and eight FVCB Board members, with an independent Blue Ridge director serving as Lead Director

* Mr. Pijor, Mr. Plum, and Ms. Ferrick will all be named directors of the combined company

Approval and Timing

The merger is expected to close in the fourth quarter of 2021 or early first quarter 2022, subject to satisfaction of customary closing conditions, including receipt of regulatory approvals and approval by the shareholders of each company.

Transaction Advisors

Raymond James served as financial advisor to Blue Ridge, with Williams Mullen serving as legal advisor. Piper Sandler & Co. served as financial advisor to FVCB, with Troutman Pepper serving as legal advisor.

About Blue Ridge

Blue Ridge Bankshares, Inc. is the holding company for Blue Ridge Bank, National Association. The Company, through its subsidiaries and affiliates, provides a wide range of financial services including retail and commercial banking, payroll, insurance, card payments, wholesale and retail mortgage lending, and government-guaranteed lending. The Company also provides investment and wealth management services and management services for personal and corporate trusts, including estate planning, and trust administration. Visit www.mybrb.com for more information.

About FVCB

FVCBankcorp, Inc. is the holding company for FVCbank, a wholly-owned subsidiary that commenced operations in November 2007. FVCbank is a $1.88 billion asset-sized Virginia-chartered community bank serving the banking needs of commercial businesses, nonprofit organizations, professional service entities, their owners and employees located in the greater Baltimore and Washington D.C., metropolitan areas. FVCbank is based in Fairfax, Virginia, and has 10 full-service offices in Arlington, Fairfax, Manassas, Reston and Springfield, Virginia, Washington D.C., and Baltimore, Bethesda, and Rockville, Maryland.