Cordia Bancorp will invest $3 million to consolidate control of Bank of Virginia (BOVA).
The move will position the $170 million-asset company to make acquisitions and raise capital, Jack Zoeller, Bank of Virginia's chairman and chief executive, said in a Tuesday press release. He is also Cordia's president and chief executive.
Cordia's investment and Bank of Virginia's conversion to a wholly owned subsidiary will be conducted as two separate transactions. Under terms of the investment, Cordia will buy about 4.1 million shares of the bank's common stock at 72 cents a share. Other bank shareholders will be allowed to buy up to $2 million in stock at the same price in an offering that should take place before Sept. 30.
Cordia will then exchange shares of its stock for all shares of the Midlothian, Va., bank that it does not already own, giving Cordia full ownership. Cordia owns 59.8% of the bank after buying a majority stake in December 2010 for $10.3 million. The proposed share exchange requires approval by shareholders of Cordia and Bank of Virginia.
Bank of Virginia had said in June that it was looking to raise between $2 million and $10 million in new capital.