Virginia National Bank shareholders suggest exploring sale or merger - Work It, Cville: News

Facebook Twitter RSS
Monday, September 1, 2014

Virginia National Bank shareholders suggest exploring sale or merger

Font Size:
Default font size
Larger font size

Posted: Wednesday, March 19, 2014 8:00 pm | Updated: 10:35 am, Thu Mar 20, 2014.

A federal filing by a member of a small group of Virginia National Bank shareholders says the Charlottesville-based bank should informally explore the option of a sale or merger.

In the March 14 Schedule 13D filing with the U.S. Securities and Exchange Commission, SRCM Holdings LLC and Swift Run Capital Management wrote that Virginia National Bankshares Corp. is “an attractive banking franchise located in a stable, growing marketplace, one that is potentially desirable to many bank merger partners or acquirers.”

Led by local investor Tim Mullen, the companies control about 9 percent of the bank’s shares, according to the filing. The shares acquired and held by Mullen and his companies “represent an attractive investment opportunity,” the filing states.

The investment companies say earnings derived from Virginia National’s commercial bank operations could support a dividend of 80 cents to $1 annually. At the end of 2013, Virginia National had $513 million in total assets and $296.7 million in net loans outstanding, according to a February earnings statement.

Options the filing identifies include a sale or merger, or Virginia National remaining a “stand-alone entity.” The document says a single “interested party” has contacted SCRM and the shareholders “believe there are many others who may have interest.”

Virginia National President and CEO Glenn Rust said no one has contacted the bank. He said he understands the outside interest and it bodes well.

“We have built a very attractive banking enterprise,” Rust said, but “we haven’t been contacted. We have a large amount of earnings and we’ve chosen to look at wealth management

Michael Ho, a finance professor at the Darden Graduate School of Business Administration at the University of Virginia, agreed with Rust’s assessment of the bank. He added that Virginia National is not obligated to take action in response to the investor group’s interest.

“What could happen here is, if you shake the trees and the stock gets attention maybe other people will come in and they’ll want to buy,” Ho said.

In detailing the interest in a possible sale, the investors wrote that current trading levels “do not appropriately value the benefits of recent actions by the [bank’s] management, including permanent operating expense reductions at the commercial bank, a liquid and clean balance sheet and a new wealth management business model which is likely to produce a more consistent revenue stream.”

If a sale eventually were to come to fruition, “whoever is going to buy them wouldn’t shut down the branches,” Ho said. “Somebody is going to want them for their local touch and feel for the customer, even more so than the wealth management business.”

And with the bank’s focus on consumer products and services, and its recent entrance into wealth management, “it’s probably an attractive target if somebody were to buy them,” Ho said.

Click to view Celebrations

Power Thought

You may be disappointed if you fail, but you are doomed if you don’t try. –Beverly Sills

You may be disappointed if you fail, but you are doomed if you don’t try. –Beverly Sills

Follow us on Facebook

Now Accepting New Patients!
Kilby Pediatrics is now accepting new patients! Call 540.829.4900 today to schedule an appointment.
5% OFF at Culpeper Window & Siding
5% OFF at Culpeper Window & Siding. (Cannot be combined with any other offer.)
Free Estimate
Contact Craig Construction today for a FREE estimate!
Call Graystone Homes Today!
Graystone Homes is best known for our high-end custom homes and renovations - but that's not all we do! Call Graystone today at 540-825-1600 to schedule an appointment and learn more. 
Avery Square Townhome Community
Stop by today and check out the Avery Square Townhome Community - a new community of luxury townhomes with resort-style amenities that is unique to Charlottesville.! Townhomes starting at just $274,900.
Sale at Fantastic Sams!
Going on Now! Sale on all Fantastic Sam Line of Products! Stop in today!