Capital expected to allow the bank to
reposition business lines, support organic growth and further
enhance capital levels of the core community bank
CHARLOTTESVILLE, Va.,
April 3, 2024 /PRNewswire/ -- Blue
Ridge Bankshares, Inc. (the "Company" or "Blue Ridge") (NYSE American: BRBS), the
holding company of Blue Ridge Bank, National Association ("Blue
Ridge Bank") and BRB Financial Group, Inc. ("BRB Financial Group"),
has closed on definitive securities purchase agreements for gross
proceeds of $150 ,000,000 in a
private placement of Blue Ridge's
common and preferred stock (the "Private Placement").
This Private Placement supersedes and replaces the $150 million purchase, offering and sale of
Blue Ridge common stock that was
announced on December 22, 2023 (the
"Previous Transaction"), for which all closing conditions were not
satisfied.
Blue Ridge intends to use the
capital to propel its near-term strategic initiatives, which
include repositioning business lines, supporting organic growth,
and further enhancing the core community bank's capital levels,
including complying with the capital ratios set forth in the
previously disclosed Consent Order issued by the Office of the
Comptroller of the Currency to Blue Ridge Bank.
"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 Blue Ridge
as this continues to represent a significant step for our
Virginia-based community bank to
build a stronger platform for growth and shareholder value."
The Private Placement
Pursuant to the securities purchase agreements, the Company has
issued 3.4 million new common shares at a price of $2.50 per share, 14,150 shares of convertible
Series B or Series C preferred stock, and 7,383 warrants to
purchase convertible Series B or Series C preferred stock of
Blue Ridge. Each share of
convertible Series B and Series C preferred stock represents the
equivalent of 4,000 shares of Blue Ridge common stock.
Upon receipt of requisite shareholder approvals for both the (i)
issuance of common shares in the Private Placement in excess of 20%
of the Company's outstanding common shares, including upon
conversion of the preferred stock, and (ii) increase in authorized
common shares from 50,000,000 to 150,000,000, all shares of the
Series B preferred stock will convert into common shares and the
Series B preferred stock warrants will convert into warrants to
acquire common shares.
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 $2.50 price and would have
approximately 29.5 million common stock warrants outstanding with a
strike price of $2.50. The
transaction terms represent the same infusion of common equity
capital as contemplated by the Previous Transaction.
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 Blue
Ridge directors and officers.
With the closing of the Private Placement, Blue Ridge expects to add up to three new
investor-appointed representatives to the Board of Directors of
Blue Ridge and Blue Ridge Bank,
subject to regulatory approval, with the total Blue Ridge Board downsizing to 13 members at
the conclusion of Blue Ridge's
2024 annual meeting of shareholders.
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 United States economy in general and the
strength of the local economies in which the Company conducts
operations; (ii) the effects of, and changes in, the macroeconomic
environment and financial market conditions, including monetary and
fiscal policies, interest rates and inflation; (iii) the Company's
ability to obtain shareholder approvals necessary for the
conversion or exchange of preferred stock to common stock; (iv) the
impact of, and the ability to comply with, the terms of the Consent
Order with the Office of the Comptroller of the Currency ("OCC"),
including the heightened capital requirements and other
restrictions therein, and other regulatory directives; (v) the
imposition of additional regulatory actions or restrictions for
noncompliance with the Consent Order or otherwise; (vi) the
Company's involvement in, and the outcome of, any litigation, legal
proceedings or enforcement actions that may be instituted against
the Company; (vii) reputational risk and potential adverse
reactions of the Company's customers, suppliers, employees, or
other business partners; (viii) the Company's ability to manage its
fintech relationships, including implementing enhanced controls and
procedures, complying with OCC directives and applicable laws and
regulations, maintaining deposit levels and the quality of loans
associated with these relationships and, in certain cases, winding
down certain of these partnerships; (ix) the quality and
composition of the Company's loan and investment portfolios,
including changes in the level of the Company's nonperforming
assets and charge-offs; (x) the Company's management of risks
inherent in its loan portfolio, the credit quality of its
borrowers, and the risk of a prolonged downturn in the real estate
market, which could impair the value of the Company's collateral
and its ability to sell collateral upon any foreclosure; (xi) the
ability to maintain adequate liquidity by retaining deposits and
secondary funding sources, especially if the Company's or
industry's reputation become damaged; (xii) maintaining capital
levels adequate to support the Company's business and to comply
with OCC directives; (xiii) the timely development of competitive
new products and services and the acceptance of these products and
services by new and existing customers; (xiv) changes in consumer
spending and savings habits; (xv) the willingness of users to
substitute competitors' products and services for the Company's
products and services; (xvi) deposit flows; (xvii) technological
and social media changes; (xviii) potential exposure to
fraud, negligence, computer theft, and cyber-crime;
(xviii) the effects of acquisitions the Company may make, including,
without limitation, the failure to achieve the expected revenue
growth and/or expense savings from such transactions; (ix)
adverse developments in the financial industry generally, such as
recent bank failures, responsive measures to mitigate and manage
such developments, related supervisory and regulatory actions and
costs, and related impacts on customer and client behavior; (xx)
changing bank regulatory conditions, policies or programs, whether
arising as new legislation or regulatory initiatives, that could
lead to restrictions on activities of banks generally, or Blue
Ridge Bank in particular, more restrictive regulatory capital
requirements, increased costs, including deposit insurance
premiums, regulation or prohibition of certain income producing
activities or changes in the secondary market for loans and other
products; (xxi) the impact of changes in financial services
policies, laws, and regulations, including laws, regulations and
policies concerning taxes, banking, securities, real estate and
insurance, and the application thereof by regulatory bodies; (xxii)
the effect of changes in accounting standards, policies and
practices as may be adopted from time to time; (xxiii) estimates of
the fair value and other accounting values, subject to impairment
assessments, of certain of the Company's assets and liabilities;
(xxiv) geopolitical conditions, including acts or threats of
terrorism and/or military conflicts, or actions taken by
the United States or other
governments in response to acts or threats of terrorism and/or
military conflicts, which could impact business and economic
conditions in the United States
and abroad; (xxv) the occurrence or continuation of widespread
health emergencies or pandemics, significant natural disasters,
severe weather conditions, floods and other catastrophic events; and
(xxvi) other risks and factors identified in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and "Risk Factors" sections and elsewhere in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2023 and in filings the
Company makes from time to time with the Securities and Exchange
Commission (the "SEC").
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
Blue Ridge intends to file a
proxy statement with the SEC that will be sent to the shareholders
of Blue Ridge seeking their
approval of the transactions described herein. Security
holders are urged to read the proxy statement when it becomes
available (and any other relevant documents filed with the SEC in
connection with the transactions described herein) because such
documents will contain important information regarding Blue Ridge, the transactions, certain
investors in the transactions, and related matters.
Security holders may obtain free copies of these documents, once
they are filed, and other documents filed with the SEC by
Blue Ridge through the website
maintained by the SEC at http://www.sec.gov. Investors and security
holders will also be able to obtain these documents, once they are
filed, free of charge, by requesting them in writing from G.
William Beale, Blue Ridge
Bankshares, Inc., 1807 Seminole Trail, Charlottesville, Virginia 22901, or by
telephone at (540) 743-6521. Blue
Ridge and its directors and executive officers may be deemed
to be participants in the solicitation of proxies from the
shareholders of Blue Ridge.
Information about the directors and executive officers of
Blue Ridge and their ownership of
Blue Ridge's common stock is set
forth in Blue Ridge's proxy
statement in connection with its 2023 annual meeting of
shareholders, as previously filed with the SEC on April 28, 2023.
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.