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Capital expected to allow the bank to reposition business lines, support organic growth and further enhance capital levels of the core community bank

Blue Ridge Bankshares, Inc. (the “Company” or “Blue Ridge”) (NYSE American: BRBS), the holding company of Blue Ridge Bank, National Association (“Blue Ridge Bank”) and BRB Financial Group, Inc. ("BRB Financial Group"), has closed on definitive securities purchase agreements for gross proceeds of $150,000,000 in a private placement of Blue Ridge’s common and preferred stock (the “Private Placement”).  

This Private Placement supersedes and replaces the $150 million purchase, offering and sale of Blue Ridge common stock that was announced on December 22, 2023 (the “Previous Transaction”), for which all closing conditions were not satisfied.  Blue Ridge intends to use the capital to propel its near-term strategic initiatives, which include repositioning business lines, supporting organic growth, and further enhancing the core community bank’s capital levels, including complying with the capital ratios set forth in the previously disclosed Consent Order issued by the Office of the Comptroller of the Currency to Blue Ridge Bank.  

“Although we believe we had nearly satisfied the appropriate closing conditions of the Previous Transaction, we received a shareholder inquiry that has raised questions about how votes were tabulated by an outside party on the articles amendment proposal at the shareholders meeting that made it difficult to move forward in a timely fashion, so we felt the best path was to adjust the offering structure,” said President and CEO, G. William “Billy” Beale. “We appreciate the commitment of the investors from the Previous Transaction to Blue Ridge as this continues to represent a significant step for our Virginia-based community bank to build a stronger platform for growth and shareholder value.” 

The Private Placement 

Pursuant to the securities purchase agreements, the Company has issued 3.4 million new common shares at a price of $2.50 per share, 14,150 shares of convertible Series B or Series C preferred stock, and 7,383 warrants to purchase convertible Series B or Series C preferred stock of Blue Ridge. Each share of convertible Series B and Series C preferred stock represents the equivalent of 4,000 shares of Blue Ridge common stock.  

Upon receipt of requisite shareholder approvals for both the (i) issuance of common shares in the Private Placement in excess of 20% of the Company’s outstanding common shares, including upon conversion of the preferred stock, and (ii) increase in authorized common shares from 50,000,000 to 150,000,000, all shares of the Series B preferred stock will convert into common shares and the Series B preferred stock warrants will convert into warrants to acquire common shares.

 Assuming the conversion of all shares of Series B preferred stock into common shares and accounting for the common-equivalent value of the Series C preferred stock, the Company would have issued 60 million shares of common and common equivalent shares at a $2.50 price and would have approximately 29.5 million common stock warrants outstanding with a strike price of $2.50. The transaction terms represent the same infusion of common equity capital as contemplated by the Previous Transaction.  

The Private Placement was led by Kenneth R. Lehman, a private investor, with many years of experience investing in banks, with participation from Castle Creek Capital Partners VIII L.P. (“Castle Creek”), other new and existing institutional investors, and certain Blue Ridge directors and officers.

 With the closing of the Private Placement, Blue Ridge expects to add up to three new investor-appointed representatives to the Board of Directors of Blue Ridge and Blue Ridge Bank, subject to regulatory approval, with the total Blue Ridge Board downsizing to 13 members at the conclusion of Blue Ridge’s 2024 annual meeting of shareholders. 

Advisors on the Offering

Piper Sandler & Co. acted as sole placement agent for the Private Placement. Williams Mullen served as legal counsel to the Company and Troutman Pepper Hamilton Sanders, LLP served as legal counsel to the placement agent. Fenimore Kay Harrison LLP served as legal counsel to Mr. Lehman and Sidley Austin LLP served as legal counsel to Castle Creek. 

To read this press release in full, click here.