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Blue Ridge Bankshares acquiring River Bancorp in stock-and-cash deal

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Blue Ridge Bankshares acquiring River Bancorp in stock-and-cash deal

Luray, Va.-based BlueRidge Bankshares Inc. agreed to acquire Martinsville, Va.-based in a stock-and-cashtransaction valued at approximately $12.4 million, based on the 30-day volume weightedaverage price of Blue Ridge common stock, according to a March 31 news release.

Under the terms of the deal, River Bancorp shareholders will have the right to receiveeither $16.57 in cash or 0.9821 of a Blue Ridge Bankshares common share for eachRiver Bancorp common share they hold.

If the 30-day volume weighted average price of Blue Ridge Banksharescommon stock two trading days prior to the closing of the merger is greater thanor equal to $18.00, then the stock exchange ratio will be adjusted so that the RiverBancorp shareholders who elect to receive stock will receive $17.68 worth of BlueRidge Bankshares common stock for each River common share. If the volume weightedaverage price is less than or equal to $16.00, then the stock exchange ratio willbe adjusted so that the River Bancorp shareholders who elect to receive stock willreceive $15.71 worth of Blue Ridge Bankshares common stock for each River Bancorpcommon share.

Shareholder elections are subject to adjustment so that the overallmix of consideration to be paid to River Bancorp shareholders consists of about70% Blue Ridge Bankshares common stock and 30% cash.

On an aggregate basis, SNL calculates the deal to be 109.2% ofbook and tangible book and 8.8x earnings. The price is 12.67% of deposits and 10.85%of assets, and the tangible book premium-to-core deposits ratio is 1.70%.

For comparison, SNL valuations for bank and thrift targets inthe Southeast between March 31, 2015, and March 31, 2016, averaged 142.88% of book,144.83% of tangible book and had a median of 23.92x last-12-months earnings, onan aggregate basis.

The deal is expected to close in the third quarter, subject tocustomary closing conditions, including regulatory approvals, and approval fromthe shareholders of Blue Ridge Bankshares and River Bancorp. Blue Ridge Banksharesexpects the transaction to be more than 30% accretive to earnings per share withan estimated earn-back period for book value dilution of less than two years.

River Bancorp, the parent of River Community Bank NA ($114.3 million), operates four branchesin and surrounding Martinsville, Va. It will add approximately $115 million in assets,$100 million in loans, and $98 million in deposits to Blue Ridge Bankshares.

Blue Ridge Bankshares is the parent of Luray-based ($266.8 million).Upon completion of the deal, the company will have about $384 million in assets,$296 million in loans, plus an additional $21 million in mortgage loans held forsale, and $294 million in deposits, based on financials reported as of Dec. 31,2015.

Additionally, the completion of the transaction will see threeRiver Bancorp directors join the board of Blue Ridge Bankshares. Brian Plum, presidentand CEO of Blue Ridge Bankshares, will continue to serve as president and CEO ofthe company. Ronald Haley, River Bancorp's president and CEO, will serve as presidentand COO of the combined bank and as a director on the Blue Ridge Bankshares board.

Sandler O'Neill & Partners LP, with Scott Clark and Avi Barakas lead bankers, served as financial adviser to Blue Ridge Bankshares in the transaction.LeClairRyan acted as legal counsel, led by Scott Richter.

River Bancorp was advised by Banks Street Partners LLC as financialadviser and Woods Rogers PLC and Bryan Cave LLP as legal counsel.Woods Rogers was represented by Nicholas Conte and Talfourd Kemper, and Bryan Cavewas represented by Jonathan Hightower.

According to SNL data, Blue Ridge Bankshares will enter MartinsvilleCity, Va., with one branch to be ranked fifth with a 7.49% share of approximately$723.4 million in total market deposits, and it will enter Henry County, Va., withone branch to be ranked seventh with a 2.31% share of about $564.5 million in totalmarket deposits. The company will also enter Charlotte County, Va., with one branchto be ranked fourth with an 11.93% share of approximately $149.0 million in totalmarket deposits, and will enter Patrick County, Va., with one branch to be rankedfifth with a 5.66% share of roughly $252.9 million in total market deposits.

Click on the map belowto access a larger version as a PDF. To use branch analytics tools to compare marketoverlap, click here.To create custom maps, click here.