Eastern Virginia Bankshares, Inc. Signs Agreement to Acquire Virginia Company Bank

Eastern Virginia Bankshares, Inc. Signs Agreement to Acquire Virginia Company Bank

  • Posted: 05/29/2014
  • Castle Creek

TAPPAHANNOCK, Va.–(PRNewswire)–Eastern Virginia Bankshares, Inc. (NASDAQ: EVBS) (“EVBS”), the one bank holding company for EVB, and Virginia Company Bank (OTCQB: VGNA) announced today that EVBS, EVB and Virginia Company Bank have entered into a definitive Agreement and Plan of Reorganization (the “Agreement”) under which Virginia Company Bank will merge into EVB, with EVB being the surviving bank, in a mixed-consideration transaction with an aggregate deal value of approximately $9.6 million.

Under the terms of the Agreement, each share of common stock of Virginia Company Bank will be converted into and become the right to receive the following consideration, at the election of the shareholder: $6.25 in cash without interest, or 0.9259 shares of common stock of EVBS (subject to the payment of cash in lieu of fractional shares).

The Agreement provides that no more than 25% of the outstanding common shares of Virginia Company Bank will be converted into cash consideration. If the aggregate number of cash-electing common shares of Virginia Company Bank is greater than 25%, then the number of cash-electing common shares will be subject to proration, as more fully described in the Agreement.

Each share of preferred stock of Virginia Company Bank outstanding at the effective time of the merger will be canceled in exchange for the right to receive one share of a new series of preferred stock of EVBS with substantially identical rights to the Virginia Company Bank preferred stock, including, without limitation, identical liquidation preferences and voting rights.

EVBS anticipates the transaction to be mid-single digits accretive, on a percentage basis, to diluted earnings per share.  Tangible book value per share, pro forma for the conversion of EVBS’s outstanding mandatorily convertible Series B Preferred Stock, is expected to be diluted less than 1.5% with an earnback period of less than two years.

Joe A. Shearin, President and Chief Executive Officer of EVBS and EVB, stated, “We are extremely pleased to announce this plan to combine our two great organizations which share such similar dedication to their customers, shareholders and the communities they serve.  This   transaction brings opportunity for growth in a very desirable market and is consistent with our strategic goals of expanding the EVB franchise into the greater Richmond area and toward Newport News and Norfolk.  Virginia Company Bank has earned a reputation for exceptional client service, which is a testament to the strong leadership team in place.  We are delighted to have Mark Hanna, Virginia Company Bank’s President and Chief Executive Officer, join our team as President of Peninsula Region and look forward to welcoming him and the customers, employees and communities of Virginia Company Bank to the EVB family.  We are very excited about the future prospects for our combined organization and the expanded branch network that Virginia Company Bank brings to the existing EVB organization.”

Mark C. Hanna, President and Chief Executive Officer of Virginia Company Bank, added, “EVB is a long-standing, well-managed institution with deep roots in Virginia, and we are delighted to be joining forces with them. We believe this merger is in the best interests of all of our key constituents, including our shareholders, who will have an opportunity to benefit from being part of a larger, profitable and growing institution; our customers, who will have access to a wider variety of products, services and increased lending capacity; and our employees, who will have additional opportunities for growth.”

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