Jan 11 - Old Dominion National Bank, North Garden, Va., has entered into a stock purchase agreement with a private investor, Wesley Yuan, pursuant to which Yuan has agreed to purchase a significant amount of equity in the bank. In connection with the agreement, the bank expects to commence an equity offering of between $7 million and $12 million, which will be conducted as a private placement to designated outside investors and will be exempt from the registration requirements of the OCC.
Under the agreement, Yuan has agreed to purchase shares in the offering if the bank reaches at least $7 million (including Yuan's investment) in the private placement. Yuan's purchase also is subject to the approval of the Comptroller of the Currency and the Virginia Bureau of Financial Institutions, as well as other customary closing conditions. As a condition of the agreement, Yuan is also expected to be appointed as a director of the bank, and he will be able to designate a majority of the board.
Subject to the conditions above, the offering is expected to close by March 31, 2013, or early in the second quarter of 2013.
"This capital raise, if successful, will enable the Bank to continue to grow as an independent community institution, increase its lending limit, and allow it to take full advantage of the opportunities offered to it in the Charlottesville market and elsewhere," Charles Darnell, the bank's president and CEO, said.
The bank also expects that if the capital raise is successful, it will conduct a rights offering to its current shareholders to give them the opportunity to purchase additional shares, up to 10 percent of the number sold in the private placement, at the same price as Yuan's investment.