Bay Banks of Virginia, Inc. ( BAYK Quick Quote BAYK - Free Report) and Blue Ridge Bankshares, Inc. recently announced the receipt of all necessary bank regulatory approvals for the pending merger. As a final step, both the companies have decided to arrange meetings of their respective shareholders on Jan 21, 2021 to vote on the merger.
The deal was announced in August 2020, with an aim to create a leading Virginia-based community bank with a pro forma total market capitalization of about $200 million.
The all-stock merger is expected to close in the first quarter of 2021, subject to remaining closing conditions.
Terms of the Agreement
At the time of announcement, it was agreed that shareholders of Bay Banks will receive 0.50 shares of Blue Ridge common stock for each share of Bay Banks common stock they hold. On completion of the deal, the combined company will be 54% owned by Bay Banks shareholders.
Per the terms, the combined company will operate under the Blue Ridge name and will trade under the ticker symbol "BRBS" on the NYSE. Also, the parent company will be headquartered in Charlottesville, VA, while the subsidiary bank will be headquartered in Richmond, VA.
Brian K. Plum, CEO of Blue Ridge, will continue as the CEO of the combined company. Randal R. Greene, CEO of Bay Banks, will become the COO of the combined company and CEO of Blue Ridge Bank. The new board will have 13 members — seven from Blue Ridge and six from Bay Banks.
The deal is expected to be significantly accretive to earnings of both companies in 2021. Also, net cost savings of $8.2 million dollars are expected, with 75% phased in by 2021 and 100% thereafter, representing about 10.5% of the projected 2021 combined non-interest expenses.
Bay Banks of Virginia has been expanding through acquisitions for the past several years. These acquisitions support the company to further diversify its loan, customer and deposit base. The company’s buyouts are in line with its footprint-expansion initiatives, which will likely keep boosting the bank’s profitability in the days ahead.
So far this year, shares of the company have rallied 2.8% against the
industry’s decline of 8.5%.
Currently, the company carries a Zacks Rank #3 (Hold). You can see
. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Similar Actions by Other Banks
In fourth-quarter 2020, several major banks have entered into acquisition deals, thereby bolstering their growth prospects after facing slowdown for most of 2020, due to the pandemic.
Earlier this month,
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