Federal regulators have approved the unorthodox purchase of Virginia's Home Bancorp by neighboring Essex Bancorp - a deal in which the acquiree is bailing out the acquirer.

The Office of Thrift Supervision, which regulates both companies, approved the deal on Tuesday. Regulatory lawyers had expressed doubt that the agency would approve the deal, viewing it as a last-ditch effort by a struggling company, Essex, to save itself from a takeover.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.