Village Bank, headquartered on Midlothian Turnpike, is on the path toward a large stock offering. Photo courtesy of CBRE.
A local bank’s plan to raise as much as $13 million in new capital is moving forward.
Village Bank and its parent company are planning a stock offering for shareholders of about 1 million shares, and the company has set a record date of Jan. 20.
A record date is the deadline for anyone who wants to buy shares in the offering to become a recorded Village Bank shareholder.
After Jan. 20, the $433 million Midlothian-based bank will send out a prospectus to those shareholders further outlining the offering. The bank has not set the offering’s completion date.
The move toward the stock offering is the latest sign that company is getting closer to landing a pool of money that would help it continue on its turnaround plan to shed its lingering baggage from the downturn.
The plan includes offering 1 million shares to current shareholders at an expected range of $11 to $13 per share, according to its prospectus. The bank’s directors and executives will purchase up to about 85,000 shares in the offering, or about $1.02 million.
Village also has a deep-pocketed fail-safe in place in the form of a Northern Virginia investor who wants to buy a large stake of the bank.
The bank has entered into what’s known as a standby purchase agreement with Kenneth R. Lehman, an investor and former SEC attorney who invests in community banks. Lehman has agreed to purchase Village shares that are left over after current stockholders have had a chance to buy in on the offering.
The prospectus states that Lehman’s investment could be up to about $8 million.
Two years ago, Lehman bought into Glen Allen-based First Capital Bank through a similar standby purchase arrangement. He ended up owning a 48 percent stake of First Capital, according to the company’s most recent proxy.
Current Village shareholders are getting the first crack before Lehman in an effort to help prevent the dilution of the stake in the bank.
Village has been stuck in somewhat of a holding pattern because of lingering high levels of bad loans and foreclosed real estate since the recession.
It has needed to raise capital to get over that hump, but has been hindered in part by stagnant growth and two stringent agreements with the Federal Reserve and the FDIC. Those agreements require Village to maintain certain levels of capital, and the prospectus says that Village is currently only in partial compliance.
Village has hired Compass Point Research & Trading and Boenning & Scattergood to work the offering. It’s also using Richmond law firm LeClairRyan during the process.
Village Bank, headquartered on Midlothian Turnpike, is on the path toward a large stock offering. Photo courtesy of CBRE.
A local bank’s plan to raise as much as $13 million in new capital is moving forward.
Village Bank and its parent company are planning a stock offering for shareholders of about 1 million shares, and the company has set a record date of Jan. 20.
A record date is the deadline for anyone who wants to buy shares in the offering to become a recorded Village Bank shareholder.
After Jan. 20, the $433 million Midlothian-based bank will send out a prospectus to those shareholders further outlining the offering. The bank has not set the offering’s completion date.
The move toward the stock offering is the latest sign that company is getting closer to landing a pool of money that would help it continue on its turnaround plan to shed its lingering baggage from the downturn.
The plan includes offering 1 million shares to current shareholders at an expected range of $11 to $13 per share, according to its prospectus. The bank’s directors and executives will purchase up to about 85,000 shares in the offering, or about $1.02 million.
Village also has a deep-pocketed fail-safe in place in the form of a Northern Virginia investor who wants to buy a large stake of the bank.
The bank has entered into what’s known as a standby purchase agreement with Kenneth R. Lehman, an investor and former SEC attorney who invests in community banks. Lehman has agreed to purchase Village shares that are left over after current stockholders have had a chance to buy in on the offering.
The prospectus states that Lehman’s investment could be up to about $8 million.
Two years ago, Lehman bought into Glen Allen-based First Capital Bank through a similar standby purchase arrangement. He ended up owning a 48 percent stake of First Capital, according to the company’s most recent proxy.
Current Village shareholders are getting the first crack before Lehman in an effort to help prevent the dilution of the stake in the bank.
Village has been stuck in somewhat of a holding pattern because of lingering high levels of bad loans and foreclosed real estate since the recession.
It has needed to raise capital to get over that hump, but has been hindered in part by stagnant growth and two stringent agreements with the Federal Reserve and the FDIC. Those agreements require Village to maintain certain levels of capital, and the prospectus says that Village is currently only in partial compliance.
Village has hired Compass Point Research & Trading and Boenning & Scattergood to work the offering. It’s also using Richmond law firm LeClairRyan during the process.