Investment Banking - Village Bank and Trust Financial Corp.

Transactions | Banking

Client: Village Bank and Trust Financial Corp.
Industry: Banking
Transaction Type: Common Stock Offering
Role: Co-Financial Advisor

  • Village Bank and Trust Financial Corp. (NASDAQ: VBFC), is the parent company of Village Bank, an 11-branch bank headquartered in Midlothian, VA, providing a full range of banking and financial services to individual and corporate customers in the Greater Richmond Region.
  • As of December 31, 2014, VBFC had $434 million in assets, but had elevated nonperforming assets and tangible common equity to tangible assets of just 0.95%.
  • On March 27, VBFC successfully completed a rights offering and concurrent standby offerings with the aggregate issuance 1,051,866 common shares at $13.87 per share for gross proceeds of approximately $14.6 million. The investment from standby purchaser Kenneth R. Lehman was $8.0 million in total, including the $4.6 million value of series A (TARP) preferred stock exchanged for common shares.
  • With the offering, VBFC retired a substantial portion of the series A preferred stock, which will reduce future preferred dividend obligations by more than 60%. Additionally, VBFC intends to contribute $5.0 million to unit Village Bank to increase its capital levels and retain in excess of $3.5 million for the holding company for its general needs.
  • The rights offering was significantly oversubscribed and had strong support from insiders and long-time shareholders.
  • Together, the offerings were sized and structured to enable VBFC to preserve its substantial deferred tax asset.