FB had received a preliminary approval on December 4, 2008 for participation in the CPP. After careful consideration, the Board of Directors of FB decided not to participate in the CPP due to various factors, including its entry into an Agreement of Merger with Xenith Corporation dated May 12, 2009.
As per the terms of the Merger Agreement, FB and Xenith Corporation will combine to form a one-bank holding company under the name Xenith Bankshares. Prior to closing the merger, Xenith Corporation will complete a private placement offering of its common stock raising at least $40 million in gross proceeds.
Darrell Swanigan, President and CEO of First Bankshares and SuffolkFirst Bank, said: “We appreciate the Treasury’s recognition of our financial strength in approving our participation in the TARP Capital Purchase Program. However, we believe that the merger with Xenith Corporation is the better course of action for our bank, as it will enable us to increase our legal lending limit and at the same time enhance our ability to reach out to a larger segment of the market.
