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Cordia Bancorp turned down four other offers before going with First Citizens

Four othercompanies were interested enough to submit offers to acquire Midlothian,Va.-based Cordia Bancorp Inc.before the latter eventually struck a deal with Raleigh, N.C.-based

Accordingto the background of Cordia and First Citizens' deal included in a Schedule14A, 30 institutions who might be interested in a transaction were contacted. Halfof that number executed nondisclosure agreements, with four financialinstitutions submitting their offers.

In theirrespective non-binding preliminary indication of interest letters, company Aoffered consideration of approximately $5.00 per Cordia common share,consisting of 65% stock and 35% cash. Company B's offer was $4.32 per Cordiacommon share, consisting of 75% stock and 25% cash. Company C offered $5.25 to$5.75 per Cordia common share, consisting of 75% stock and 25% cash. Finally,company D proposed a consideration of $4.50 per Cordia common share, consistingof 70% stock and 30% cash. Offers from companies B, C and D also had fixedexchange ratio for the stock consideration. Cordia received these non-bindingpreliminary indication of interest letters on Dec. 21, 2015.

After a fewdays of meetings and discussions, Cordia decided to pursue talks with companiesA, C and D, requesting that company A revise its bid to remove the exclusivityprovision, and for company C to revise its bid to allow for a floating, asopposed to a fixed, exchange ratio. These two companies each submitted revisednon-binding indication of interest letters reflecting the revisions on Jan. 6.

Over thenext several weeks, representatives of Cordia met with representatives of thethree companies while also negotiating the sale of its CordiaGrad student loanorigination platform to Jack Zoeller, the former President and CEO of Cordiaand Bank of Virginia.

On Jan. 15,company A told Cordia that while it continued to be interested in pursuing apotential deal, it also requested that further discussions be put on hold untilBank of Virginia sold its CordiaGrad student loan origination platform andcertain student loans. Company C also expressed its interest in the terms ofthe CordiaGrad sale.

A few weekslater, company D told Cordia that it was still interested in a deal, but alsoasked Cordia to commit to a transaction by March 1. Company D also disclosedthat it was already beginning due diligence on another acquisition opportunity.

On Feb. 4,company C lowered its offer to a range of $4.25 to $4.75.

On Feb. 11and 12, Cordia decision makers met to review an updated 2016 budget for Cordiathat reflected the sale of CordiaGrad. Up for discussion were the earningsprojections used to generate the budget and the potential impact of therecapture of Cordia's deferred tax asset. After the revised budget wasapproved, copies were provided to the three remaining interested parties.

On Feb. 18,Cordia's decision makers opted to continue discussions with company A, due to itsoffer having the highest indicated value at the time. Company D was alsoinformed that the pro forma capital levels of the combined organization betweenitself and Cordia created some doubt about the ability to obtain regulatoryapproval for the deal.

On March 1,Cordia sold itsstudent loan origination platform to Zoeller, who left the company inconnection with the transaction.

Discussionsbetween Cordia and company A continued through March, with company B alsoreaching to express a renewed interest in a business combination. Company Beventually submitted a revised non-binding indication of interest letteroffering a consideration of $4.75 to $5.00 per Cordia common share, consistingof all stock consideration with a floating exchange ratio, subject to upper andlower limits. It was also in March when First Citizens reached out to Cordiaalso to express interest in a potential deal.

Company Apulled out of negotiations on April 7, telling Cordia that it would not besubmitting an updated proposal.

On April13, First Citizens submitted a non-binding indication of interest letter thatreflected an all-cash consideration of $5.07 per Cordia common share, whilecompany B offered $4.79 per Cordia common share, consisting of all stockconsideration with a fixed exchange ratio.

After morediscussions, Cordia's board eventually decided to continue discussions withFirst Citizens. The latter also eventually agreed to increase its offer to$5.15 per share. The two finally executed the merger agreement on May 19,announcing the dealbefore the market opening of May 20.