“I’m in a much better mood as a banker today than I have been over the last four years,” said Presley, chief executive of First Capital Bancorp.
The Glen Allen-based parent of First Capital Bank said Wednesday that it would close this week on a capital raise that will net it $17.8 million in fresh cash.
First Capital announced the plan in January and offered millions of shares to both existing shareholders and a Northern Virginia investor known for buying into community banks.
It disclosed Wednesday that it sold 8.91 million shares at $2 apiece during the offering, reaching the goal it set from the get-go. The buyers were a combination of shareholders and Kenneth Lehman, an investor from Arlington.
Davenport & Co. worked the deal for First Capital.
Lehman was the bank’s ace in the hole. He agreed to buy up to 4.9 million shares if First Capital’s shareholders didn’t bite on the offer.
Lehman is a shareholder and director of several East Coast banks and was at one time an attorney with the Securities and Exchange Commission.
Once the raise officially closes Friday, the bank has three uses in mind for the cash, Presley said.
First is growing the bank by potentially adding employees and branches.
“We were pretty explicit in our prospectus that we were going to use it for growth first and take advantage of opportunities we see in the market,” Presley said. “We do have a location in Mechanicsville that we own that we would like to start building a branch at at some point.”
Some of the proceeds will also be used to help the bank continue to work through its non-performing assets. Like many of its local peers, First Capital has been working to get bad loans off the books. It had $22 million in non-performing assets at the end of March.
Presley, who was the founding chief executive of the former First Market Bank and has been at the helm of First Capital for three years, said the bank might look at repaying some of its TARP capital.
The bank received $10.9 million from the U.S. Treasury in 2009 as part of the TARP Capital Purchase Program.
This is the bank’s first capital raise since 2007 and the first capital raise attempted by a local bank since Franklin Federal Savings Bank netted about $138 million early last year.
Bank of Virginia gave up majority ownership of itself in 2010 to a group of Virginia investors in exchange for $10.3 million in fresh capital.
Central Virginia Bank shelved a $15 million raise in late 2010. The failed Virginia Business Bank tried to raise $20 million in 2010 but couldn’t reach its goal.
First Capital was founded in 1998 and has $530 million in total assets. It turned a first-quarter profit of $134,000.
“In any capital raise I’ve ever been involved in, you can feel good or bad [going into it], but you don’t know how it’s going to go until you get to the end,” Presley said.