Bank merger tentatively approved

Published 8:16 pm Monday, September 28, 2009

A merger between First Bankshares Inc., which owns Suffolk First Bank, and Xenith Corp. has been tentatively approved by shareholders from both companies, but the deal could be on hold until the market value of the company rises, according to a company press release.

Shareholders from both companies were set to meet Tuesday to ratify the deal, but an unmet condition of the deal is that the combined company be listed on the NASDAQ Capital Market.

NASDAQ requires that the market value of a company’s publicly held stock be at least $15 million in order to gain a listing. The combined company, Xenith Bankshares Inc., was valued at $11.7 million as of the close of business Sept. 24, though that value had been as high as $16.2 million within the last month.

Directors of both companies continue to support the merger, according to their announcement, and they will seek an adjournment of Tuesday’s meetings until a later date. The adjournment would give them time to continue seeking NASDAQ approval.

Even without that approval, company officials said in their press release, they would seek to remove the NASDAQ-listing condition from the merger agreement and have their shareholders reconsider their votes in light of the new proposal.

Following the merger’s completion, the combined company then would continue its efforts to get listed on the NASDAQ Capital Market.