SCHEDULE 13D/A: Kenneth Lehman Boosts Stake in Blue Ridge Bankshares to 30.7% and Secures Board Representation

Kenneth R. Lehman has significantly increased his beneficial ownership in Blue Ridge Bankshares, Inc. to 30.7% through a series of private placement investments and warrant conversions, securing a board seat and substantial influence.

Summary

• Kenneth R. Lehman beneficially owns 29,998,257 shares of Blue Ridge Bankshares, Inc. Common Stock, representing 30.7% of the outstanding shares, assuming full exercise of his warrants.
• His current direct ownership is 19,998,257 shares, or 22.8% of the 87,785,224 shares outstanding as of March 20, 2025.
• This ownership includes 10,000,000 shares underlying warrants.
• Lehman acquired these shares and warrants through an Amended and Restated Securities Purchase Agreement dated April 3, 2024, which was part of a $150,000,000 private placement.
• On June 28, 2024, his 4,703 Series B Preferred Shares converted into 18,812,000 Common Stock, and warrants for 2,500 Series B Shares converted into warrants for 10,000,000 Common Stock.
• He has sole voting and dispositive power over his reported shares.
• Lehman has the right to designate an individual to the boards of directors of Blue Ridge Bankshares, Inc. and its subsidiary, Blue Ridge Bank, National Association, as long as he maintains at least 4.9% ownership.
• Trevor Montano was appointed to the Issuer's board on April 1, 2024, as designated by Lehman.
• Lehman and other significant purchasers have gross-up rights to maintain their proportionate ownership in future equity issuances.
• The Issuer filed a registration statement on July 22, 2024, which became effective on July 29, 2024, to allow for the resale of the acquired securities.
• On April 17, 2025, Lehman modified a credit facility, collateralizing $17.0 million of a $33.5 million revolving line of credit with 5,000,000 shares of Common Stock, maturing around October 25, 2026.
• He also holds 1,000,000 shares in a margin account as of April 17, 2025, with no current margin borrowing.

Sentiment

Score: 7

Explanation: The document reflects a significant, strategic investment by a major shareholder, Kenneth R. Lehman, who has increased his stake and secured board representation. This indicates confidence in the company's future. The private placement raised substantial capital for the Issuer. However, the use of shares as collateral for a credit facility and potential margin accounts introduces personal financial risks for the reporting person, which could indirectly impact the company if forced sales occur.

Positives

• Significant insider ownership (Kenneth R. Lehman holds 30.7% fully diluted), aligning his interests with shareholders.
• Secured board representation for Kenneth R. Lehman (via Trevor Montano's appointment), indicating direct influence on corporate strategy and governance.
• Gross-up rights for significant investors, allowing them to maintain their proportionate ownership and prevent dilution in future equity offerings.
• Successful private placement raising $150,000,000, providing capital to the Issuer.
• Registration statement for resale of securities is effective, providing liquidity options for the reporting person and other purchasers.

Risks

• Credit Facility Risk: The lender of the $33.5 million credit facility (with $17.0 million borrowed) collateralized by 5,000,000 shares of Common Stock may require pre-payment, additional collateral, or foreclose on the pledged shares upon certain customary events.
• Margin Account Risk: If shares are held in margin accounts, brokers may require repayment of margin loans, additional collateral, or sell pledged shares without notice upon certain customary events, potentially leading to forced sales at unfavorable prices.
• Dilution Risk (for other shareholders): The conversion of preferred shares and warrants into common stock, as well as the potential exercise of warrants, increases the total outstanding common stock, which could dilute the ownership percentage of existing common shareholders not participating in the private placement.
• Concentration Risk: Kenneth R. Lehman's significant ownership (30.7%) could lead to concentration of control, potentially impacting corporate decisions.

Future Outlook

The document primarily details past transactions and current ownership structure. It mentions warrants are exercisable until April 3, 2029, and the Issuer is required to keep the registration statement effective for resale of securities until certain conditions are met. It also outlines the ongoing board representation rights and gross-up rights for the reporting person.

Industry Context

This filing indicates a significant investment by a single individual in a regional bank (Blue Ridge Bankshares, Inc.). Such large, concentrated investments, often accompanied by board representation and special rights (like gross-up rights), are common in situations where an investor seeks to influence corporate strategy, potentially for a turnaround or growth phase. It suggests a belief in the long-term value of the banking sector or this specific institution.

Management Changes

Corporate Governance

Related Party Transactions

• The Amended and Restated Securities Purchase Agreement dated April 3, 2024, between the Issuer and Kenneth R. Lehman (and other investors) for the private placement of securities.
• The Registration Rights Agreement dated April 3, 2024, between the Issuer and Kenneth R. Lehman (and other purchasers) regarding the resale of acquired securities.

Stakeholder Impact

• Shareholders: Existing shareholders (not participating in the private placement) may experience dilution due to the conversion of preferred shares and warrants. However, the significant investment and board representation by a major shareholder could signal stability and strategic direction.
• Management/Board: The appointment of a board member designated by a significant shareholder indicates increased oversight and potential strategic alignment with a major investor's vision.
• Creditors: The private placement raised $150,000,000, which could improve the Issuer's financial position and ability to meet obligations.

Next Steps

• Warrants held by Kenneth R. Lehman are exercisable until April 3, 2029.
• The Issuer is required to use commercially reasonable efforts to keep the registration statement effective for resale of Registrable Securities until they are sold or cease to be Registrable Securities.
• The credit facility collateralized by Lehman's shares matures on or about October 25, 2026.

Key Dates

Recommendation

Keywords

Blue Ridge Bankshares, BRBS, Kenneth R. Lehman, Schedule 13D, Beneficial Ownership, Private Placement, Warrants, Preferred Stock Conversion, Board Representation, Corporate Governance, Shareholder Activism, Financial Services, Banking, SEC Filing, Insider Ownership, Credit Facility, Margin Account