Union Bankshares Corporation (NasdaqGS:UBSH) entered into a definitive merger agreement to acquire Xenith Bankshares, Inc. (NasdaqGS:XBKS) from a group of shareholders for approximately $690 million on May 19, 2017. Under the terms of the all-stock transaction, each outstanding share of Xenith common stock will be converted into the right to receive 0.9354 shares of Union common stock. All outstanding in-the-money Xenith options and U.S. treasury warrants will be cashed out at closing. The remaining in-the-money warrants will be converted into Union Bankshares warrants. Each restricted stock award and restricted stock unit award, which is unvested or contingent and outstanding immediately prior to the effective time, shall vest fully and shall be converted into the right to receive the merger consideration. Shareholders owning more than 4.9% of Xenith common stock will, after the closing of the merger, be subject to a restriction on the sale of their Union shares for 60 days. Post deal, the combined entity will be owned 67% by Union and 33% by Xenith. In the event of termination, a termination fee of $26.5 million shall be payable by the party that terminates the deal.

Following the closing of the merger, John C. Asbury, President and Chief Executive Officer of Union, will continue as President and Chief Executive Officer of the combined organization, Robert M. Gorman will operate as Executive Vice President and Chief Financial Officer, Raymond D. Smoot, Chairman of Union Bankshares Corporation's Board of Directors, will continue to serve as Chairman of the Board of combined company and T. Gaylon Layfield, III, Chief Executive Officer for Xenith, will serve for a transitional period as Executive Vice Chairman of Union Bank & Trust. Following the closing of the merger, the Union Board of Directors will expand to 20 members and will be composed of 18 members from the current Union Board and 2 members from the Xenith Board.

The deal is subject to the satisfaction of customary closing conditions including regulatory approval, shareholders' approval from both Union Bankshares and Xenith Bankshares, registration statement effectiveness, and listing approval being obtained. In consideration of the merger, extensive due diligence was performed by both companies over a six-week period. The merger agreement has been approved by the Board of Directors of each company. On May 19, 2017, BCP Fund I Virginia Holdings entered into a voting agreement to vote all of its shares in favour of the transaction. As of September 15, 2017 a special meeting of Xenith Bankshares and Union Bankshares is to be held on October 26, 2017 wherein they will vote in favor of or against the transaction. As of October 17, 2017, the Federal Reserve Bank of Richmond and the Virginia State Corporation Commission granted approval for the transaction. All the regulatory approvals have now been received. As of October 26, 2017, shareholders of Xenith Bankshares and Union Bankshares approved the transaction. The deal is expected to be completed in early January 2018. The deal is expected to be immediately accretive to tangible book value with no earn back period. Scott Anderson,Lisa J. Schultz, Chris Mihok and Eric Kalinowski of Keefe, Bruyette and Woods, Inc. acted as the financial advisor while Jacob A. Lutz, R. Mason Bayler, Seth Winter, Mark Windon Jones, Lynda Crouse, Robert Friedman, Dan Howell, Greg Matisoff and Beth Petty of Troutman Sanders LLP acted as legal advisors to Union Bankshares Corporation. Jon Doyle, Scott M. Clark and Josh Shropa Sandler O'Neill + Partners, L.P. acted as financial advisor while T. Justin Moore, II, Brian L. Hager, Waverly Pulley III and Lake Taylor Jr. of Hunton & Williams LLP acted as legal advisor to Xenith Bankshares. Computershare, Inc. acted as transfer agent to Union Bankshares. Scott Anderson, Lisa Schultz, Eric Kalinowski, Chris Mihok, Chris Kochard, Stephen Gunlock, Owen Elliott, Brad Rigoli and Jack Sanders of KBW LLC acted as financial advisors to Union Bankshares. H. Rodgin Cohen, Alison Ressler, Aaron B. Werner, Michael T. Escue, Jason J. Cabral and Rita Anne O'Neill of Sullivan & Cromwell LLP acted as legal advisors to Xenith Bankshares.

Union Bankshares Corporation (NasdaqGS:UBSH) completed the acquisition of Xenith Bankshares, Inc. (NasdaqGS:XBKS) from a group of shareholders on January 1, 2018. Union Bankshares Corporation will separately operate the former Xenith Bank branches as Xenith Bank, a division of Union Bank & Trust of Richmond, Virginia until systems conversion in late May 2018. Pursuant to the merger agreement, Patrick E. Corbin and Thomas G. Snead have been named to the Board of Directors of Union Bankshares Corporation.