River Bank to merge with Blue Ridge Bankshare Inc.

Published 4:40 pm Thursday, April 7, 2016

Blue Ridge Bankshare Inc. has announced the acquisition of River Bancorp Inc., the parent holding company of River Community Bank.

According to a press release from River Community Bank, “River operates four branches in and surrounding Martinsville, Virginia and will add approximately $115 million in assets, $100 million in loans and $98 million in deposits to Blue Ridge.”

A branch of River Community Bank is located in Drakes Branch at 4677 Main St.

President and Chief Executive Officer of River Ronald D. Haley said the only changes that are expected to occur in Drakes Branch would be a change of signage.

“Branches very seldom change,” Haley said. He said the location could potentially offer more products to customers.

The release stated that Blue Ridge will acquire River based on an agreement of 70 percent stock and 30 percent cash with the transaction being valued at $12.4 million.

“We are delighted to combine forces with a bank that has been the financial foundation of its communities for over 120 years,” Haley said in the release.

“Leadership of both banks share the same vision for the combined bank: one that remains customer centric and committed to our communities. Customers of both banks will benefit by an increase in products and services.  River Community and Blue Ridge know their customers and their families. Decisions will continue to be made locally by bankers with a vested interest in the community.”

According to the release, shareholders of River Community Bank will be given the opportunity to receive $16.57 in cash or 0.9821 of common stock in Blue Ridge for each share currently in River Community Bank.

Brian K. Plum, president and chief executive officer of Blue Ridge, said in the release, “We are excited to announce the combination of Blue Ridge and River. This transaction affords us the opportunity to partner with an excellent financial institution with similar values and the same rigorous commitment to serving our communities. Our partnership with River furthers our strategy of organic growth and selective expansion while seeking acquisitions with significant earnings accretion and reasonable earn back periods. We see River as a natural complement to our existing footprint in the Shenandoah Valley and Piedmont and look forward to welcoming our new customers, employees and community members.”

The release stated that Blue Ridge expects more than 30 percent of growth by gradual addition, relative to earnings per share.

Ultimately, the company estimates an earn-back period for book value dilution of just under two years.