Hampton Roads Bankshares Inc. said late last week that it closed $235 million of the previously announced $255 million private placement that would lift its banking subsidiaries back into "well capitalized."
A group of investors, led by Anchorage Advisors LLC, CapGen Financial Group and The Carlyle Group are swooping in to help the Norfolk, Va., company and its subsidiaries, Shore Bank and Bank of Hampton Roads after being "critically undercapitalized" due to problem real estate loans.
The $3 billion-asset company had a consolidated total risk-based capital ratio of 2.86% as of June 30.
Hampton Roads issued 587.5 million common shares at 40 cents a share to the investor groups. The remaining $20 million of the private placement, along with issuing an additional 50 million common shares in conjunction with a common stock rights offering, are expected to close in the fourth quarter.
Hampton Roads also said that it expanded the rights offering, to $40 million, at the same price as the private placement. A commencement date for the rights offering has not been set.
Also in connection to the private placement's closing, Hampton Roads will allow shareholders to exchange their Series A and B preferred stock into newly issued common stock.
At closing Sept. 28, shareholders of more than 95% of those preferred shares outstanding had accepted the exchange.
The Treasury Department has agreed to convert into common shares Hampton Roads' Series C preferred shares and warrants that it held as part of the deal.
This would ultimately free the Treasury from its $80.3 million investment in the company through the Troubled Asset Relief Program.