Two TARP Banks Amend Merger Terms

It's been nearly three months since two Virginia-based banks agreed to merge:  Union Bankshares Corporation and First Market Bank.

The merger is still on, but in the past few days the parties have amended some of the important terms.  (Those wishing to see the documents filed with the Securities and Exchange Commission can find them here, here, here, and here).

Under the terms of the March 30 merger agreement, First Market Bank was intended to be a separate subsidiary of Union Bankshares. That is no longer the case.

Now the merger is expected to occur in the fourth quarter of 2009. First Market is to be rolled into Union Bank & Trust --  Union Bankshares' biggest unit -- in the first quarter of 2010.

After the merger, the combined institution will have 97 branches throughout Virginia, with more than $4.0 billion in assets.  The holding company will be based in Richmond.

According to this press release about the revised merger terms, Union Bankshares will "change its name to 'Union First Market Bankshares Corporation' or another name agreed upon by the parties."  The parties may also rename the "continuing bank" sometime in the future.  

The press release claims that the merger of the banks will result "...in a more diversified and more competitive enterprise that is better positioned to meet the needs of the Virginia communities they currently serve."

Union Bankshares got $59 million in government aid on Dec. 19 through the $700 billion Troubled Asset Relief Program. It issued the Treasury Department preferred stock and warrants in return.

First Market Bank took $33.9 million on February 6 under the same TARP initiative, known as the Capital Purchase Program. It also preferred stock and warrants in exchange for the cash.