Since the merger that made it into an $800 million institution in April, Virginia Commonwealth Bank has wasted little time in investing in a new headquarters and luring local talent.
Now the bank has loaded up its capital cache as it remains on the hunt for future deals.
VCB and its Bay Banks of Virginia parent company announced last week the completion of a $35 million capital raise, which after paying lawyers and investment bankers and the like, netted around $32.9 million.
CEO Randy Greene and Chairman Frank Scott said last week the added cash will help the bank in its continued evolution from the merger that combined Kilmarnock-based Bank of Lancaster and Petersburg-based VCB.
“We wanted to support what we’re doing here,” Greene said. “As soon as we announced the merger, we started put together a Richmond team and really focusing on growing this Richmond market.
Now headquartered in the West End, the bank is marching toward $1 billion in assets and has continued to beef up its local commercial lending and wealth management team by attracting seasoned bankers from competitors both large and small.
“We’re right on the cusp of being a billion-dollar bank,” Greene said. “We’re just the right size to handle larger transactions, handle middle-market-type commercial accounts. This is enough capital, excluding any acquisition, to grow to $1.3-$1.4 billion.”
The capital raise is the result of a private placement that sold 3.78 million shares at $9.25 per share to the bank’s existing shareholders, institutional investors and other new accredited investors.
Atlanta-based investment banking firm FIG Partners handled the offering for VCB. Williams Mullen was its legal counsel in the effort.
Scott said the bank is positioning itself as an acquirer, ready to capitalize on openings it sees in Richmond and around the statement because of consolidation. He said the bank has in mind future acquisitions of other banks and wealth management firms.
“We’re not doing this to sell, we’ve got a banking institution and resources and people and we see great growth in our future,” Scott said, adding that those efforts were verified by the success of the capital raise.
Its target market for future deals, Scott said, is all of Central Virginia, in which the bank includes Fredericksburg and Lynchburg, in addition to Hampton Roads. That would add to VCB’s 19 branches that span Richmond and the Tri-Cities across to the Northern Neck.
“There’s been a void because of some of the recent acquisitions and we’ve seen the acquirer retreat from the market somewhat,” he said.
Citing recent industry statistics VCB included in an investor slideshow, Greene said there were 220 banks headquartered in Virginia in 1990. As of the end of the second quarter of this year, there were 74.
“This has created a lot of opportunity,” Greene said.