| Item 1.01 | Entry into a Material Definitive Agreement |
On May 28, 2020, Blue Ridge Bankshares, Inc. (the “Company”) entered into a Subordinated Note Purchase Agreement (the “Purchase Agreement”) with an institutional investor pursuant to which the Company sold and issued a 6.000%fixed-to-floating rate subordinated note due 2030 (the “Note”) with a principal amount of $15.0 million.
The Note will initially bear interest at 6.000% per annum, beginning May 28, 2020 to but excluding June 1, 2025, payable semi-annually in arrears. From and including June 1, 2025 to but excluding June 1, 2030, or up to an earlier redemption date, the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month SOFR (as defined in the Note) plus 587 basis points, payable quarterly in arrears. Beginning on June 1, 2025 through maturity, the Note may be redeemed, at the Company’s option, on any scheduled interest payment date. The Note will mature on June 1, 2030. The Purchase Agreement contains certain customary representations, warranties and covenants made by the Company, on the one hand, and the purchaser of the Note, on the other hand.
If certain events of default occur, such as the bankruptcy of the Company, the principal amount of the Note may become due and immediately payable. The Note will be an unsecured, subordinated obligation of the Company and will rank junior in right of payment to the Company’s existing and future senior indebtedness. The Note is not convertible into common stock or preferred stock, and is not callable by the holder.
The Note has been structured to qualify as Tier 2 capital under bank regulatory guidelines, and the proceeds from the sale of the Note will be utilized for general corporate purposes, including the potential repayment of the Company’s existing subordinated debt (which debt becomes callable in December 2020) and supporting capital levels at Blue Ridge Bank, N.A., the Company’s subsidiary bank.
The Note was offered and sold in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.
The foregoing descriptions of the Purchase Agreement and the Note do not purport to be complete and are qualified in their entirety by reference to the forms of the Purchase Agreement and the Note which are attached hereto as Exhibits 10.1 and 4.1, respectively, and are incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant. |
The information set forth under Item 1.01 above is incorporated by reference into this Item 2.03.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
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