Just as it did three years ago, Xenith bank is starting off its summer with an acquisition.
The Richmond bank finalized its acquisition on Monday of Gloucester-based Colonial Virginia Bank.
CVB shareholders received 2.65 shares of Xenith stock for each CVB share they own, putting the value of the deal at about $9.7 million.
First announced in March, the deal brings Xenith’s size to about $800 million in total assets. That’s about twice its size when it closed its last two purchases in the summer of 2011. It marks Xenith’s fourth merger or acquisition since it was founded in 2009 by taking on the assets of a bank in Suffolk.
Gaylon Layfield, Xenith’s chief executive, said the bank is now focused on internal growth, but more deals aren’t out of the question.
“We also continue to look at opportunities that from time to time present themselves,” Layfield said. “It’s very hard to predict. You just pay attention to it on a day-to-day basis.”
In taking on the $115 million bank, Xenith adds CVB’s $71 million loan portfolio and $99 million deposit base, as well as its three offices in Gloucester and York counties. Xenith already has three locations in Suffolk, one in northern Virginia, and two in Richmond.
The 10-year-old Colonial Virginia Bank brand will remain in its three offices for the foreseeable future and will be branded as a division of Xenith Bank.
Xenith will initially bring over 26 CVB employees. Once the two banks merge their back-end systems and processes, 11 of those workers in duplicative positions will be let go.
Bob Bailey, CVB’s chief executive, is staying on with Xenith to lead the Peninsula and Gloucester operations.
This is the third deal to be either be announced or finalized in the Richmond banking scene in 2014. Consolidation has been gaining some momentum among community banks, and many in the banking industry have begun to eye a certain size threshold as an ideal strategy to survive and thrive in the industry.
Richmond-based Union Bankshares acquired StellarOne Bank on Jan. 1 in a deal that made it the biggest bank in the state at $7 billion in assets.
EVB, a $1 billion bank headquartered in Tappahannock, has a deal in the works to buy Newport News-based Virginia Company Bank in a deal valued at $9.6 million.
Layfield said increased size and scale is important for attractive shareholder returns and competitive customer service and that Xenith recognizes the need to grow.
But he isn’t convinced that all smaller banks won’t make it.
“You hear a lot about ‘small banks can’t survive,’” he said. “I’m not sure I believe that.
“I think we have to be careful about making these sort of sweeping statements. The market is not monolithic.”