Xenith Bankshares, Inc. Announces Plans to Cease Operations of its Mortgage Banking Subsidiary, Gateway Bank Mortgage, Inc.
September 16 2016 - 5:25PM
Xenith Bankshares, Inc. (formerly known as Hampton Roads
Bankshares, Inc.) (NASDAQ:XBKS), parent company of Xenith Bank
(formerly known as The Bank of Hampton Roads), announced today that
Gateway Bank Mortgage, Inc. (GBMI) and its parent company, Xenith
Bank, have entered into a definitive asset purchase agreement to
sell certain assets of GBMI, which provides mortgage banking
services, including the origination and processing of residential
mortgage loans for sale into the secondary market, to a multi-state
home lender.
Under the terms of the asset purchase agreement, effective at
closing, GBMI will cease taking new mortgage loan applications.
However, all applications with prospective borrowers that are in
process at that time will continue to be managed by GBMI toward
closing, funding and sale to investors in the ordinary course of
business. Management of Xenith Bank and GBMI expect processing of
these applications and investor funding of these loans will be
substantially complete by December 31, 2016.
T. Gaylon Layfield, III, CEO of Xenith Bankshares, stated, “We
wish Glenn Astolfi, President and CEO of GBMI, and his team the
very best in their transition to new employment. Our decision
to exit the mortgage origination business was based on a number of
factors, including the substantial costs of regulatory compliance
in the post-Dodd Frank world and the absolute scale required to be
competitive in today’s mortgage banking market. Weighing the
investments required to achieve this scale against our desire to
focus on our core business strategies, we elected to work with
Glenn to effect this outcome. While GBMI contributed to our
earnings, we did not believe our share of the earnings was adequate
to compensate our shareholders for the risks inherent in the
mortgage banking business. In our drive to become more efficient, I
believe exiting the mortgage banking operations currently conducted
through GBMI is an important step in that process. Notwithstanding
this agreement, we intend to continue to provide access for our
clients to competitive residential mortgage financing options
through Xenith Bank branches.”
About Xenith Bankshares, Inc.
Xenith Bankshares, Inc. (“XBKS”) is the holding company for
Xenith Bank, a full-service commercial bank headquartered in
Richmond, Virginia. XBKS is the fifth largest community bank
by deposits headquartered in the Commonwealth of Virginia.
Xenith Bank specifically targets the banking needs of middle market
and small businesses, local real estate developers and investors,
private banking clients and individuals, and retail banking
clients. Through various divisions, XBKS also offers mortgage
banking services and marine finance. Xenith Bank’s
regional area of operations spans from Baltimore, Maryland and
Rehoboth Beach, Delaware, to Raleigh and eastern North Carolina,
complementing its significant presence in Greater Washington, D.C.,
Greater Richmond, Virginia, Greater Hampton Roads, Virginia and on
the Eastern Shore of Maryland and Virginia. Xenith Bank has
42 full-service branches and five loan production offices located
across these areas with its headquarters centrally-located in
Richmond. XBKS’s common stock trades on The NASDAQ Stock Market
under the symbol “XBKS.”
Additional information about XBKS and its subsidiaries can be
found at www.xenithbank.com.
Caution About Forward-Looking Statements
All statements other than statements of historical facts
contained in this press release are forward-looking
statements. Forward-looking statements made in this press
release reflect beliefs, assumptions and expectations of future
events or results, taking into account the information currently
available to XBKS. These beliefs, assumptions and
expectations may change as a result of many possible events,
circumstances or factors, not all of which are currently known to
XBKS. If a change occurs, XBKS’s business, financial
condition, liquidity, results of operations and prospects may vary
materially from those expressed in, or implied by, the
forward-looking statements. Accordingly, you should not place
undue reliance on these forward-looking statements. Factors
related to the transaction that may cause actual results to differ
materially from those contemplated by these forward-looking
statements include among others: the ability to complete the
transaction as expected and within the expected timeframe; a higher
than expected number of GBMI employees leaving GBMI and not
continuing with the purchaser; and the possibility that one or more
conditions to the completion of the transaction may not be
satisfied and that in any event could give rise to a termination of
the asset purchase agreement. Additional factors include
among others: difficulties and delays in integrating the merger of
the Hampton Roads Bankshares, Inc. and legacy Xenith Bankshares,
Inc. businesses or fully realizing cost savings and other benefits;
business disruptions following the merger; changes in asset quality
and credit risk; the inability to sustain revenue and earnings
growth; changes in interest rates and capital markets; inflation;
customer borrowing, repayment, investment and deposit practices;
customer disintermediation; the introduction, withdrawal, success
and timing of business initiatives; competitive conditions; the
inability to realize cost savings or revenues or to implement
integration plans and other consequences associated with mergers,
acquisitions and divestitures; economic conditions; the inability
to realize deferred tax assets within expected time frames or at
all; and the impact, extent and timing of technological changes,
capital management activities and other actions of the Federal
Reserve Board and legislative and regulatory actions and reforms;
and the risks discussed in XBKS’s public filings with the
Securities and Exchange Commission, including those outlined under
“Risk Factors” in XBKS’s registration statement on Form S-4
(Registration Statement No: 333-210643). Except as required
by applicable law or regulations, XBKS does not undertake, and
specifically disclaims any obligation, to update or revise any
forward-looking statement.
Contact:
Thomas W. Osgood
Executive Vice President, Chief Financial Officer,
Chief Administrative Officer and Treasurer
(804) 433-2209
tosgood@xenithbank.com
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