Bay Banks of Virginia Inc., the holding company for Bank of Lancaster, and Virginia BanCorp Inc., the holding company for Virginia Commonwealth Bank, last week jointly announced that shareholders of both companies voted March 15 in separate meetings to approve their agreement to merge.
Following the merger, these two historic community banks in Central Virginia will operate as a single entity under the Virginia Commonwealth Bank brand. The parties plan to officially merge the holding companies and banks in early April, with combined assets expected to be more than $800 million.
“The shareholders of Bay Banks overwhelmingly agreed with those of Virginia BanCorp in the vision of a merger of equals,” said Randal R. Greene, president and chief executive officer of Bay Banks of Virginia. “We will witness two locally owned community banks, each with more than 80 years of service to their communities, unite to serve our customers with new services and even greater financial strength.”
“Our shareholders are enthusiastic about adding new capabilities and services to current and new Central Virginia customers,” said C. Frank Scott III, president and chief executive officer of Virginia BanCorp. “It is important to note that we will continue to be locally owned and focused on Richmond and our Central Virginia customers. We will build on each bank’s reputation and provide new services within business banking, residential and commercial mortgages and wealth management.”
The combined bank will locate its new corporate office in Richmond.
Virginia BanCorp shareholders will receive 4,586,397 shares of Bay Banks’ stock, which is approximately 49% of the total shares outstanding, for a total deal value of $40.1 million, based on the price of Bay Banks’ stock on March 16, 2017. Current Bay Banks shareholders will maintain approximately 51% interest in the newly merged entity.
Regulatory approvals for the merger have been received from the Virginia State Corporation Commission and the Federal Reserve.
Bank of Lancaster, based in Kilmarnock, operates 11 branches in the Northern Neck and in Richmond. Virginia Commonwealth Bank operates eight branches from Petersburg to Suffolk, including Richmond.
Bank of Lancaster branches will maintain their identity until banking systems are consolidated in the fourth quarter of this year.
“We are committed to making the transition as seamless as possible for our customers and employees,” said Greene.