Shareholders' Equity

12 Months Ended

Dec. 31, 2011

Shareholders' Equity [Abstract]

Shareholders' Equity

13. Shareholders' Equity

Reverse Stock Split

On June 28, 2011 the Company completed a one-for-four reverse split of its common stock, as reflected at the opening of trading on the following day. In connection with the reverse stock split, every four shares of issued and outstanding common stock of the Company at the Effective Date were exchanged for one share of newly issued common stock of the Company. Fractional shares were rounded up to the next whole share. Immediately prior to the Effective Date, the Company had 75,000,000 authorized common shares and 50,906,222 shares of common stock outstanding. After giving effect to the stock split, the Company had 75,000,000 authorized common shares and 12,726,399 shares of common stock outstanding. Authorized but unissued common shares were 62,255,999 at February 24, 2012.

Common Shares

During August 2010, the Company's shareholders' approved an amendment to the Company's Amended and Restated Articles of Incorporation to increase the number of authorized shares of common stock from 25,000,000 shares to 75,000,000 shares and reduce the par value of the common stock from $5.00 per share to $0.01 per share. In October 2010, the Company issued 9,993,995 shares of common stock to a group of institutional investors in a private placement (the "Private Placement"). An additional 307,508 shares were issued in December 2010 and January 2011 to legacy shareholders as of October 6, 2010, and 654,031 shares were issued to the institutional investors in the first quarter 2011 in a follow-on offering related to the Private Placement. In connection with these share issuances, the Company received gross proceeds of $106 million and $8 million in the fourth quarter 2010 and first quarter 2011, respectively. Of the proceeds received, $96 million and $8 million were contributed to the Bank in fourth quarter 2010 and first quarter 2011, respectively.

As disclosed in Note 16, Equity Based Compensation, as of February 24, 2012 the Company has reserved a total of 442,145 shares for future issuance under various equity incentive plans. During the year ended December 31, 2011, the Company awarded a total of 106,784 shares of restricted stock to directors and management and 383,251 stock options to management.

Authorized Preferred Shares

The Company has authorized preferred stock of 2,500,000 shares with such preferences, limitations and relative rights within legal limits of the class, or one or more series within the class, as are set by the Board of Directors. To date, the Company has not issued any preferred shares.

Cash Dividends

The Board of Directors has not declared or paid a dividend on the Company's common stock since the first quarter 2009. Currently, the Company must obtain prior approval from the Federal Reserve Bank of Richmond to pay a dividend to its shareholders. Dividends from the Bank are the Company's primary source of funds for payment of dividends to its common shareholders. Under the terms of a Consent Order the Bank entered into with the FDIC and the State Board in June 2010 (the "Consent Order"), the Bank is currently prohibited from paying dividends to the Company without the prior consent of these regulatory agencies.

Recapitalization

In connection with the Private Placement, the Company evaluated the appropriate accounting for the transaction by analyzing investor ownership, independence, risk, solicitation and collaboration considerations. Based on the analysis of these factors, the Company concluded that the Private Placement transaction resulted in a recapitalization of the Company's ownership for which push-down accounting was not required.