Xenith Bankshares (XBKS) in Richmond, Va., has agreed to buy Colonial Virginia Bank in Gloucester, Va.
The $680 million-asset Xenith will exchange 2.65 shares of its stock for each share of the $115 million-asset Colonial Virginia. The deal that is expected to close in the second quarter. Colonial Virginia has two branches in Gloucester and a loan production office in Yorktown, Va.
"We view this transaction as an opportunity to grow and expand our competitive position in the Greater Hampton Roads, Virginia region, which is one of our target markets," T. Gaylon Layfield 3rd, Xenith's president and chief executive, said in a press release. "This acquisition enables us to continue to leverage the infrastructure we have built over the last several years."
"The last few years have brought a historic amount of increased regulation, heightened competition from banks and nonbanks, and a difficult economic environment," Robert Bailey, Colonial Virginia's president and CEO, said in the release. "Across the country, community banks are partnering to improve efficiencies in order to overcome these challenges."
Xenith said it expects the deal to generate more than 20% earnings accretion this year, excluding merger-related costs. It also expects to earn back in tangible book value dilution in less than 18 months.
Xenith was advised by SunTrust Robinson Humphrey and Hunton & Williams. Central Virginia was advised by Sandler O'Neill and Williams Mullen.
