Hampton Roads Bankshares withdraws stock offering

Hampton Roads Bankshares Inc., citing a lack of sufficient investor support, said Wednesday that it withdrew a public offering for as many as 32.5 million new common shares.

The Norfolk-based parent of Bank of Hampton Roads, Gateway Bank and Shore Bank had been hoping to raise between $110 million and $130 million of capital from the offering, John A.B. "Andy" Davies Jr., its president and CEO, said.

In recent weeks, Hampton Roads Bankshares' management made several presentations to institutional investors in New York, Boston and San Francisco, Davies said. About 70 percent of those attending hadn't heard of Hampton Roads Bankshares, he said, and the response from many was that "this is a new company with a new CEO."

Prospective investors said they wanted to see how the company's management dealt with the high level of its non-performing assets, Davies said. Their message was, "You've got to take more time and come back," he said.

One drawback was that the offering would have severely diluted the 21.8 million common shares that Hampton Roads Bankshares has outstanding. However, the additional capital would have provided greater resources for Hampton Roads Bankshares to weather further deterioration in the quality of its loans.

When it reported financial results for the April-through-June quarter earlier this month, the company said the volume of its troubled loans and foreclosed real estate had jumped to 4.95 percent of total assets from 1.34 percent at the end of 2008.

The company, which has been hit in recent months by a rising volume of sour loans, said it lost $43.23 million in the second quarter partly because of a $33.71 million provision for loan losses.

Tom Shean, (757) 446-2379, tom.shean@pilotonline.com