Park Sterling in Charlotte, N.C., has agreed to buy First Capital Bancorp in Glen Allen, Va.
The $2.4 billion-asset Park Sterling said in a press release Thursday that it will pay $82.5 million in cash and stock for the $617 million-asset First Capital. The deal is expected to close in the first quarter.
Park Sterling said the price values First Capital at 151% of its tangible book value and that 70% of the consideration will involve stock.
The deal will expand Park Sterling's operations around Richmond, Va., where it already has two branches. Park Sterling said it expects to incur $10.5 million to $11.5 million in merger-related costs, though it also plans to cut 40% of First Capital’s expenses.
“The partnership helps us achieve our strategic goal of building out our Richmond presence,” James Cherry, Park Sterling's chief executive, said in the release.
Ken Lehman, a former banking lawyer who invests heavily in community banks, bought a 41% stake in First Capital several years ago.
Keefe, Bruyette & Woods and McGuireWoods advised Park Sterling. Banks Street Partners and LeClairRyan advised First Capital.