The Bank Slate


Blue Ridge in Va. raising $150M through private placement

Blue Ridge Bankshares in Charlottesville, Va., has received a much-needed capital infusion.

The $3.3 billion-asset company said in a press release that it has agreements to raise $150 million through a private placement led by private investor Kenneth Lehman with participation from Castle Creek Capital Partners and existing investors, directors and officers.

The company will sell 60 million new shares of common stock at $2.50 each and roughly 29.4 million warrants to buy common stock at a strike price equal to $2.50 per share.

Blue Ridge said it plans to use the capital for a variety of purposes, including repositioning business lines, supporting organic growth and enhancing its bank’s capital levels.

“We are delighted to welcome our new shareholders and additional investment from current shareholders,” Billy Beale, the company’s president and CEO, said in the release. “This transaction represents a significant step for our Virginia-based community bank to build a stronger platform for growth and shareholder value.”

Lehman will own about 25% of Blue Ridge’s common stock and Castle Creek will own roughly 12.5%.

After the private placement closes, Lehman and Castle Creek plan to identify certain criticized assets and develop an asset resolution plan for Blue Ridge. The investors will be allowed to appoint up to three new directors to join the company’s board.

Blue Ridge has been operating under a written agreement with the Office of the Comptroller of the Currency that limits its Banking-as-a-Service vertical and mandates other improvements.

Blue Ridge, which lost a total of $60 million in the second and third quarters and suspended its dividend, recently disclosed that it could raise capital after the OCC required its bank to establish individual minimum capital ratios “that are higher than those required for capital adequacy purposes generally.”

Piper Sandler was the sole placement agent for the private placement. Williams Mullen was the company’s legal counsel, while Troutman Pepper Hamilton Sanders served as legal counsel to the placement agent. Fenimore Kay Harrison advised Lehman and Sidley Austin advised Castle Creek.

Leave a Reply

Your email address will not be published. Required fields are marked *