Addition and subtraction

Several Virginia banks were in a M&A mood in 2015

Published March 1, 2016 by Robert Powell, III

Last year was a time of mergers and acquisitions for several Virginia banks.

McLean-based Capital One Financial Corp., the nation’s seventh-largest commercial bank, completed its $9 billion acquisition of General Electric Capital Corp.’s Healthcare Financial Services lending business in December.

The GE unit is being combined with Capital One’s existing health-care banking business to form Capital One Healthcare, a provider of financial services with more than $11 billion in total outstanding balances. The deal represents one of Capital One’s latest moves beyond its credit card business.

In January 2015, Portsmouth-based TowneBank completed its $275 million acquisition of Richmond-based Franklin Financial Corp., the parent company of Franklin Federal Savings Bank.

In December, TowneBank said it planned to acquire Chesapeake-based Monarch Financial Holdings Inc., the parent company of Monarch Bank, in a deal worth $220.6 million. The acquisition, expected to close in the second quarter, would create a financial institution with $7.3 billion in assets and a 20.6 percent share of bank deposits in the Hampton Roads market.

In October, Charlotte, N.C.-based Park Sterling Corp. announced plans to acquire the Glen Allen-based holding company of First Capital Bank in a deal valued at $82.5 million. First Capital operates eight branches in the Richmond area. The combined company will have about $3.1 billion in total assets, $2.2 billion in loans, $2.4 billion in total deposits and 60 offices in four states.

Meanwhile, in Southern Virginia, Danville-based American National Bankshares in January 2015 completed its $24.2 million merger with MainStreet BankShares Inc., the holding company for Franklin Community Bank. The deal expanded American National’s footprint into the Roanoke metro area, adding three bank branches in Franklin County and the Smith Mountain Lake area.

The merger movement has continued this year. Virginia Beach-based Hampton Roads Bankshares Inc., the parent company of the Bank of Hampton Roads, and Richmond-based Xenith Bankshares Inc., the holding company for Xenith Bank, in February announced plans to combine their operations in a $107.2 million merger. It would create a Richmond-based company retaining the Xenith name that would have total assets of $2.9 billion and deposits of $2.5 billion.

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