Charlottesville-based Blue Ridge Bankshares Inc., the parent holding company of Blue Ridge Bank, announced Thursday it will merge with Richmond-based Bay Banks of Virginia Inc., parent holding company of Virginia Commonwealth Bank, in an all-stock transaction to create a bank with pro forma total market capitalization of nearly $200 million.

Under the terms of the agreement, Bay Banks shareholders will receive 0.5 shares of Blue Ride common stock for each share of Bay Banks common stock they own. Bay Bank shareholders will own approximately 54% while Blue Ridge shareholders will own approximately 46% of the combined company once the transaction is complete.

The bank will operate under the Blue Ridge name and trade under BRBS on the NYSE American stock exchange. The holding company will be based in Charlottesville and the subsidiary bank will be headquartered in Richmond. The pro forma company would have approximately $2.4 billion in assets, $1.9 billion in loans and $2.2 billion in deposits, according to data as of June 30. This would rank the bank No. 4 in the state for community bank deposit market share for institutions under $10 billion in assets.

“This combination creates additional resources to invest in our communities and the technologies necessary to maintain and improve upon our core commitment to providing responsive, client-centric financial services,” Blue Ridge CEO Brian K. Plum said in a statement  “Bay Banks’ combination of longstanding dedicated service to its legacy communities with significant success in key Virginia MSA’s will diversify the combined company’s revenue and market demographics; positioning Blue Ridge as the community bank of choice in its markets.”

Plum will continue as CEO of the combined company and Bay Banks CEO Randal R. Greene will become chief operating officer of the combined company and CEO of Blue Ridge Bank. Bay Banks Chief Financial Officer Judy C. Gavant will become CFO of the combined company and Blue Ridge CFO Amanda Story will become chief accounting officer. Blue Ridge Chief Administrative Officer Jim McCarty will continue in that role for the combined company.

“We are excited to partner with Blue Ridge,” Greene said in a statement. “Blue Ridge has achieved record revenue for the first half of 2020 driven by strong mortgage-related income. This is a great combination of two companies with rich Virginia histories dating back over 200 years combined.”

Raymond James & Associates Inc. served as financial adviser to Blue Ridge while Troutman Pepper Hamilton Sanders LLP served as legal counsel. Bay Banks was advised by Piper Sandler Cos. as financial advisor and Williams Mullen as legal counsel. Strategic Risk Associates LLC advised both companies about credit analysis and testing.

“We remain zealously committed to building a top-performing financial services provider passionately dedicated to serving its communities and clients, and our partnership with Bay Banks reinforces our momentum to fulfill that commitment,” Plum said in a statement.

Subscribe to Virginia Business.

Get our daily e-newsletter.