Hampton Roads Bankshares in Virginia Beach, Va., has agreed to buy Xenith Bankshares in Richmond, Va.

The $2 billion-asset Hampton Roads said in a press release Wednesday that it will pay $107.2 million in stock for the $1 billion-asset Xenith. Hampton Roads plans to adopt Xenith's name after the deal's completion, which is expected to occur in the third quarter. The company's headquarters will be in Richmond.

T. Gaylon Layfield 3rd, Xenith's president and chief executive, will become the company's CEO. Donna Richards, Hampton Roads' president, will remain president and will add the title of chief operating officer. Charles Johnston, Hampton Roads' chairman and interim CEO, plans to retire.

Johnston stepped in as Hampton Roads' CEO in September after Douglas Glenn, who had led the company since August 2011, resigned.

"This is an exciting opportunity to combine two financially strong banks with very similar cultures, core values and guiding principles, as well as a shared commitment to building long-term customer relationships with exceptional customer service," Richards said in the release. "As a combined company united under one name, we will bring together the relationship focus of a hometown bank with the sophistication and experience of a larger one. … Xenith's extensive business banking experience will complement Bank of Hampton Roads' retail and consumer focus. "

Thomas Osgood, Xenith's chief financial officer, will keep that title after the deal closes. Thomas Dix 3rd, Hampton Roads' CFO, will become co-head of the company's commercial line of business. Chris Cottrell 3rd, Xenith's chief credit officer, will retain that title.

The companies plan to cut about 10% of their combined expenses. The transaction is expected to be "substantially accretive" to tangible book value per share given the expected recovery of a deferred-tax asset.

Sandler O'Neill and Wachtell, Lipton, Rosen & Katz advised Hampton Roads. Macquarie Capital and Hunton & Williams advised Xenith.

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