Virginia bank deal, dogged by regulatory concerns, is called off

A Virginia bank merger that was delayed last year over regulatory concerns has been called off.

FVCBankcorp in Fairfax and Blue Ridge Bankshares in Charlottesville have agreed to terminate their deal, which was announced in July 2021, the companies said Thursday.

The deal, billed as a merger of equals, would have created a $5 billion-asset bank with a foothold in the Northern Virginia market. It was initially expected to close in the first quarter of 2022.

But in November, the two companies warned that the merger could be delayed until the second or third quarter due to regulatory concerns flagged by the Office of the Comptroller of the Currency.

The $2.7 billion-asset Blue Ridge said at that time that it had created an initiative to address issues the OCC raised. While Blue Ridge did not provide any details about the nature of the OCC’s concerns, consumer advocates had written to the agency earlier in the year with complaints about the bank’s student lending program. Blue Ridge has offered income-share agreements, in which students pledge some of their post-graduation income as part of an education financing arrangement.

In their letter to the OCC, the consumer groups said Blue Ridge had evaded consumer protection rules by claiming their product was not a form of credit.

In terminating the merger, both companies agreed to pay their own costs and expenses connected to the deal, and neither will pay a termination fee. The two companies did not say whether the OCC’s concerns played a role in their decision to terminate the merger.

Blue Ridge President and CEO Brian Plum and FVCB Chairman and CEO David Pijor issued a joint statement, which said: “Our boards of directors mutually concluded after careful consideration that it would not be prudent to continue to pursue the proposed merger of our companies. The termination of the merger agreement positions both companies to focus on the consistent growth and value creation they have each delivered through the years."