Hampton Roads Bankshares and Gateway Financial to Merge
Hampton Roads Bankshares and Gateway Financial Holdings have executed a definitive agreement in which Gateway Financial Holdings will merge with and into Hampton Roads Bankshares.
Under the terms of the merger agreement, Hampton Roads Bankshares will acquire all of the outstanding shares of Gateway Financial Holdings. Gateway Financial Holdings’ shareholders will receive 0.67 shares of Hampton Roads Bankshares common stock for each share owned of Gateway Financial Holdings.
Preferred shareholders of Gateway Financial Holdings will receive comparable shares in the combined company. Seven members of the Gateway Financial Holdings board of directors will join the Hampton Roads Bankshares board of directors. The companies value the deal at $101 million based upon the 20-day weighted average closing price of Hampton Roads Bankshares’ stock through September 12, 2008, of $11.91.
The merger is anticipated to close in the fourth quarter of 2008 and is conditioned upon customary closing conditions, including receiving the requisite regulatory and stockholder approvals, and upon Gateway Financial Holdings raising approximately $30 million in additional capital.
Pursuant to the terms of the merger agreement, Gateway Financial Holdings will merge with and into Hampton Roads Bankshares. Subsequent to the completion of the merger, Gateway Bank & Trust Company, a subsidiary of Gateway Financial will operate as a wholly owned subsidiary of Hampton Roads Bankshares.
The companies anticipate that Gateway Bank & Trust Company’s offices in Virginia Beach, Chesapeake, Norfolk and Suffolk, Virginia, will be converted to Bank of Hampton Roads locations with the additional consolidation of overlapping market locations. Gateway Bank & Trust Company’s offices outside of South Hampton Roads will continue to operate as either Gateway Bank & Trust Company locations or, as presently the case in Richmond, Virginia, as The Bank of Richmond.
Jack Gibson will be the vice chairman and CEO of Hampton Roads Bankshares and remain president and CEO of Bank of Hampton Roads, a subsidiary of Hampton Roads Bankshares. Ben Berry will become the president of Hampton Roads Bankshares and serve on its board of directors. David Twiddy will become the president and CEO of Gateway Bank & Trust Company and an executive officer of Hampton Roads Bankshares.