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Acquisition
9 Months Ended
Sep. 30, 2020
Business Combinations [Abstract]  
Acquisition

Note 2 – Acquisition

On December 15, 2019, the Company completed the acquisition of Virginia Community Bankshares, Inc. (“VCB”), the holding company for Virginia Community Bank, pursuant to the terms of the Agreement and Plan of Reorganization, dated May 13, 2019, between the Company and VCB.  Under the agreement, VCB’s shareholders had the right to receive, at the holder’s election, either $58.00 per share in cash or 3.05 shares of the Company’s common stock, subject to the allocation and proration procedures set forth in the agreement, plus cash in lieu of fractional shares.  

Note 2 – Acquisition, continued

A summary of the assets received and liabilities assumed and related adjustments are as follows:

 

 

 

 

Assets

As Recorded by Virginia Community Bankshares, Inc.

 

 

Adjustments

 

 

As Recorded by     Blue Ridge Bankshares, Inc.

 

Cash and due from banks

$

9,678,700

 

 

$

 

 

$

9,678,700

 

Investment securities available-for-sale

 

43,419,481

 

 

 

(470,191

)

(1)

 

42,949,290

 

Restricted equity securities

 

302,700

 

 

 

 

 

 

302,700

 

Held-for-investment loans

 

173,871,523

 

 

 

(900,020

)

(2)

 

172,971,503

 

Furniture, fixtures, and equipment

 

6,435,695

 

 

 

3,296,872

 

(3)

 

9,732,567

 

Other real estate owned

 

87,427

 

 

 

(87,427

)

(4)

 

-

 

Accrued interest receivable

 

864,154

 

 

 

-

 

 

 

864,154

 

Core deposit intangible

 

-

 

 

 

1,690,000

 

(5)

 

1,690,000

 

Other assets

 

8,069,497

 

 

 

549,976

 

(6)

 

8,619,473

 

   Total assets acquired

$

242,729,177

 

 

$

4,079,210

 

 

$

246,808,387

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Deposits

$

217,953,153

 

 

$

118,621

 

(7)

$

218,071,774

 

Other liabilities

 

1,296,520

 

 

 

-

 

 

 

1,296,520

 

   Total liabilities assumed

$

219,249,673

 

 

$

118,621

 

 

$

219,368,294

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets acquired

 

 

 

 

 

 

 

 

 

27,440,093

 

Total consideration paid

 

 

 

 

 

 

 

 

 

44,048,371

 

Goodwill

 

 

 

 

 

 

 

 

$

16,608,278

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Adjustment to reflect estimated fair value of security portfolio

 

(2)

Adjustment to reflect estimated fair value and credit mark on loans of $(2,318,569), and elimination of VCB’s allowance for loan and lease losses

 

(3)

Adjustment to reflect estimated fair value of furniture, fixtures, and equipment

 

(4)

Adjustment to reflect estimated fair value of Other Real Estate Owned (“OREO”)

 

(5)

Adjustment to reflect recording of core deposit intangible

 

(6)

Adjustment to reflect estimated fair value of other assets and the recording of deferred taxes related to acquisition

 

(7)

Adjustment to reflect estimated fair value of deposits

 

A summary of the consideration paid is as follows:

 

 

 

 

 

Common stock issued (1,312,919 shares)

$

27,401,831

 

Cash payments to common shareholders

 

16,646,540

 

   Total consideration paid

$

44,048,371

 

 

On August 12, 2020, the Company entered into a definitive merger agreement to acquire Bay Banks of Virginia, Inc., in an all-stock transaction (the “merger agreement”).  Subject to the terms and conditions stated in the merger agreement, upon the consummation of the merger each share of Bay Banks common stock will be converted into the right to receive 0.5000 shares of the Company’s common stock.  The transaction is expected to close in the first quarter of 2021.  Refer to Part II, Item 1A “Risk Factors” for additional information.