Atlantic Bay Mortgage Group, Virginia Community Bank call off deal
Atlantic Bay Mortgage Group and Virginia Community Bank have agreed to back out of a merger that would have been a rare instance of a nondepository lender acquiring depository institution.
The two companies decided to withdraw from the deal after becoming frustrated with the prolonged and uncertain timeline for the closing of the merger process. The timeline has "remained unclear," according to a press release issued by Atlantic Bay Mortgage Group.
"Due to these circumstances, both companies believe it is no longer in the best interests of the organizations to continue the process," Atlantic Bay said in the release. "Atlantic Bay and Virginia Community Bank think it's best for their respective shareholders, employees and clients to move forward separately."
The mutual decision to withdraw the companies' merger application, which was submitted to the Federal Deposit Insurance Corp. and the Virginia Bureau of Financial Institutions, comes more than a year after the two companies agreed to the deal. Atlantic Bay would have purchased a majority stake in the bank in the transaction, which was aimed at helping to diversify its funding sources.
The two companies will continue their original partnership, in which Atlantic Bay provides mortgage lending services and operational support to the bank through Lender Select Mortgage Group, a brand name Atlantic Bay does business under to provide private-label mortgage services to community banks.
"While this process has been an arduous one, we certainly value the relationships we have built with Virginia Community Bank through this process," said Atlantic Bay Mortgage Group CEO Brian Holland in the press release.