Richmond-based Virginia Business Bank will reopen Monday as a branch of another bank after being seized and closed by state and federal regulators.
The State Corporation Commission’s Bureau of Financial Institutions and the Federal Deposit Insurance Corp. (FDIC) took control of the troubled 5-year-old bank on the close of business Friday.
Under an agreement with the FDIC, which was named receiver of the financial institution, Virginia Business Bank is being acquired by Richmond-based Xenith Bank.
In a news release, the SCC said all Virginia Business Bank deposit accounts have been transferred to Xenith and will be available during regular business hours.
Virginia Business Bank is the first state-charted bank in Virginia to fail since 1992.
E. Joseph Face Jr., the Virginia commissioner of financial institutions, noted in the news release that deposits of all Virginia banks are insured by the FDIC up to $250,000.
Virginia Business Bank, which was chartered in early 2006, has one Richmond office location, 9020 Stony Point Parkway, Suite 225.
The bank began business just before the real estate bubble burst, and the nation’s economy slid in to a deep recession at the end of 2007.
According to the bank’s website, its target customers were “commercial customers whose borrowing needs for real estate development, business expansion, private investment and acquisition are in the $1 million to $5 million range.”
The bank consented to a written agreement with the Federal Reserve Board in August 2009 to come up with a plan to improve its financial condition.
Virginia Business Bank attempted to sell $30 million in stock last year but canceled the offering in October when too few investors subscribed.
In a separate move Friday, Xenith anounced it had completed its acquisition of Paragon Commercial Bank’s Richmond operations. The acquisition adds $62 million in loans to Xenith’s total assets and $75million in deposits.
After three months, Paragon’ s Richmond office will close and all Paragon employees and operations will be consolidated with other Xenith locations in Richmond.