A Northern Virginia investor moved one step closer last week to being able to buy a big piece of a local bank.
Kenneth R. Lehman, who owns large stakes in several East Coast banks, received approval from the Virginia State Corporation Commission to acquire almost half of First Capital Bank.
Lehman last month struck a deal with Glen Allen-based First Capital to be the bank’s $9.8 million failsafe for its pending capital raise.
First Capital is looking to raise $17.8 million in fresh capital. Lehman signed an agreement to buy up to 4.9 million shares if First Capital’s shareholders don’t first bite on an offer.
Lehman, who could not be reached for comment, must still receive approval from federal regulators.
Meanwhile, First Capital is finalizing the prospectus for its capital raise.
First Capital chief executive John Presley said that document should be completed any day and will be mailed to the bank’s shareholders.
The bank said it is trying to close the deal by the end of March, but the process has dragged.
“These days nothing gets approved or worked through the system as fast as it used to,” Presley said.
To receive approval from the SCC’s Bureau of Financial Institutions, Lehman had to submit an application showing his ability as a sound investor and that his investment was a safe move for the bank.
Joe Face, commissioner of the Bureau of Financial Institutions, said the investigative process tries to determine whether such deals are in the public interest.
“We look at the applicant, its ability to acquire, its intentions to acquire and its proposed philosophy once acquired,” Face said. “And we look at the effect it would have on the bank, its customers and the community.”
A track record of bank investing also helps, Face said.
Lehman, a former attorney at the Securities and Exchange Commission, owns or has owned big chunks of other community banks, including Roebling Bank in New Jersey, Graystone Tower Bank in Pennsylvania and the former Strata Bank in Massachusetts.
The capital raise will be First Capital’s first since 2007.
The bank, which has seven branches and $541 million in assets, said the money from the offering would be used as a capital cushion to help the bank deal with bad loans.
It lost $3.75 million in 2011 and had $25.33 million in non-performing assets at year’s end. It is still considered well capitalized by regulatory standards.
First Capital has hired Richmond-based investment banking firm Davenport & Co. to handle the capital raise.
A Northern Virginia investor moved one step closer last week to being able to buy a big piece of a local bank.
Kenneth R. Lehman, who owns large stakes in several East Coast banks, received approval from the Virginia State Corporation Commission to acquire almost half of First Capital Bank.
Lehman last month struck a deal with Glen Allen-based First Capital to be the bank’s $9.8 million failsafe for its pending capital raise.
First Capital is looking to raise $17.8 million in fresh capital. Lehman signed an agreement to buy up to 4.9 million shares if First Capital’s shareholders don’t first bite on an offer.
Lehman, who could not be reached for comment, must still receive approval from federal regulators.
Meanwhile, First Capital is finalizing the prospectus for its capital raise.
First Capital chief executive John Presley said that document should be completed any day and will be mailed to the bank’s shareholders.
The bank said it is trying to close the deal by the end of March, but the process has dragged.
“These days nothing gets approved or worked through the system as fast as it used to,” Presley said.
To receive approval from the SCC’s Bureau of Financial Institutions, Lehman had to submit an application showing his ability as a sound investor and that his investment was a safe move for the bank.
Joe Face, commissioner of the Bureau of Financial Institutions, said the investigative process tries to determine whether such deals are in the public interest.
“We look at the applicant, its ability to acquire, its intentions to acquire and its proposed philosophy once acquired,” Face said. “And we look at the effect it would have on the bank, its customers and the community.”
A track record of bank investing also helps, Face said.
Lehman, a former attorney at the Securities and Exchange Commission, owns or has owned big chunks of other community banks, including Roebling Bank in New Jersey, Graystone Tower Bank in Pennsylvania and the former Strata Bank in Massachusetts.
The capital raise will be First Capital’s first since 2007.
The bank, which has seven branches and $541 million in assets, said the money from the offering would be used as a capital cushion to help the bank deal with bad loans.
It lost $3.75 million in 2011 and had $25.33 million in non-performing assets at year’s end. It is still considered well capitalized by regulatory standards.
First Capital has hired Richmond-based investment banking firm Davenport & Co. to handle the capital raise.