RICHMOND, Va., June 1, 2011 /PRNewswire/ -- Xenith Bankshares, Inc. (NASDAQ: XBKS), parent company to Xenith Bank, today announced that Xenith Bank has entered into a definitive purchase agreement with Paragon Commercial Bank to acquire its Richmond, Virginia branch operations as well as certain select loans and deposits associated with Paragon's only Virginia location in Richmond.
Under the terms of the agreement, Xenith Bank will acquire total loans of approximately $60 million at a price of 96.23%, and assume total deposits of approximately $71 million for a premium of 3.92%. All of the acquired loans are located within Xenith's target markets. The loans are primarily commercial & industrial, owner-occupied real estate and commercial real estate loans. The acquired deposits are primarily non-time "core" deposits, consistent with Xenith's stated goal of supporting a large portion of its growth with core deposits, including checking, money market and savings accounts. Xenith Bank also expects to retain key employees of the branch. It is expected that Paragon's existing Richmond branch will be closed and its operations consolidated into Xenith's existing Richmond downtown location after the required regulatory notices have been given and the required notice period has passed.
"We view this transaction as a premium opportunity to grow and strengthen our competitive position in the desirable Richmond market," said T. Gaylon Layfield, III, President and Chief Executive Officer. " We are excited about adding new team members to the Xenith team and the addition of many new customer relationships. This acquisition enables us to leverage the infrastructure we built in 2010 as well as some of the capital that was raised during our recent stock offering, which was completed in April 2011. We believe that the acquisition is an excellent strategic fit with our focus on the Virginia business, real estate and private banking communities. Importantly, we expect this transaction will be immediately accretive to income."
The transaction is subject to state and federal bank regulatory approvals and other customary closing conditions and is expected to close during the third quarter of 2011.