First Bankshares, Xenith weigh stock-listing options

SUFFOLK

First Bankshares Inc. and Xenith Corp., which cautioned Friday of a complication in their merger agreement, said Tuesday that both companies had adjourned their meetings for shareholder approval until Oct. 15.

First Bankshares, parent of SuffolkFirst Bank, and Xenith, a bank startup company in Richmond, agreed in May to a consolidation that would transform SuffolkFirst into Xenith Bank and create a new holding company, Xenith Bankshares Inc.

The companies' plans call for expanding Xenith's reach to Richmond and Northern Virginia and to move its headquarters to Richmond.

One condition of their merger was that publicly held shares of the combined company be approved for listing on the Nasdaq Capital Market. However, the market value of their shares haven't met the $15 million minimum required by Nasdaq, First Bankshares and Xenith said.

Nasdaq's market-value calculation excludes those shares held by executives, directors and investors with stakes of 10 percent or more, the companies noted.

The combined market value of their shares Monday, the companies said, was $11.5 million.

"The boards of both companies still unanimously support the merger" and the companies continue to talk with Nasdaq, T. Gaylon Layfield III, Xenith's president and CEO, said.

Both companies, he said, will distribute information to their shareholders about waiving the listing condition in their merger agreement, if necessary.

If they cannot meet the market-value requirement for a listing on the Nasdaq Capital Market, the merged company will seek to have its share price quoted on the OTC Bulletin Board or on the so-called Pink Sheets system until the Nasdaq listing is approved, First Bankshares and Xenith said.

First Bankshares' stock didn't trade Tuesday. On Monday, the share price rose 50 cents in light trading to close at $5.75.

Tom Shean, (757) 446-2379, tom.shean@pilotonline.com