Bay Banks of Virginia in Kilmarnock has agreed to buy Virginia BanCorp in Petersburg.
The $468 million-asset Bay Banks said in a press release Thursday that it will exchange an undisclosed amount in stock for the $326 million-asset Virginia BanCorp. The deal, promoted as a merger of equals, is expected to close in the second quarter.
The company will move its headquarters to Richmond, Va., where it will have nearly $300 million in deposits. Virginia Commonwealth Bank, which is part of Virginia BanCorp, will be the surviving bank.
Randal Greene, Bay Banks' president and chief executive, will keep those posts and will become vice chairman, while C. Frank Scott 3rd, Virginia BanCorp's president and CEO, will become chairman. Each company will appoint five directors.
The deal is expected to be immediately accretive to earnings per share. It should take Bay Banks less than three years to earn back any dilution to its tangible book value dilution. The companies expects to cut 14% of their combined noninterest expenses by 2018.
FIG Partners and Williams Mullen advised Bay Banks. Performance Trust Capital Partners and LeClairRyan advised Virginia BanCorp.