Theresignation of Hampton RoadsBankshares Inc.'s president and CEO in September 2015prompted Xenith BanksharesInc. — which had long considered potentialacquisitions — to suggest a combination.
HamptonRoads agreed to explore the idea but continued its search for a new CEO, while CharlesJohnston temporarily assumed the role. The parties began conducting duediligence in November and hoped to reach a preliminary agreement by mid-January2016.
Initialterms included an all-stock transaction, under which Xenith would merge intoHampton Roads but retain its name as the resulting entity's brand. Johnstonproposed an exchange ratio of 3.8Hampton Roads shares for each Xenithshare. It was also suggested that the combined board be composed ofeight Hampton Roads directorsand four Xenith directors.These terms were eventually amended to an exchange rate of 4.4 and a 13-member board,comprising eight HamptonRoads directors and five Xenith directors, with one from Hampton Roads serving aschairman.
On Jan. 14, HamptonRoads decided to suspend its search for a new CEO. The following day, theparties entered into a letter of intent and began mutual due diligence. Thefirst draft of the merger was sent out Jan. 26. Following further negotiations,the boards of Hampton Roads and Xenith on Feb. 10 each voted unanimously infavor of the merger'sterms.
Thedeal was executed and announced the same day. The press release also listed thecombined institution's management team. A Form S-4 filed April 7 added thatHampton Roads' chief risk officer, John Marshall, would be chief riskofficer of the resulting entity, and that Thomas Dix III, Hampton Roads CFO,and Edward Phillips Jr., Xenith chief lending officer, would be co-heads ofcommercial lending.
Xenith President and CEO T. Gaylon Layfield is set to be CEOof the combined entity.