Union Bankshares repays $59 million federal loan

Union Bankshares Corp. said yesterday that it has repaid the $59 million it received from the federal government under the Troubled Asset Relief Program.

The Bowling Green-based bank, which is preparing to merge with Richmond-based First Market Bank, has redeemed the preferred stock issued to the Treasury by repaying the money it received in December as part of TARP's capital purchase program.

"Our banks have been well-capitalized throughout the time we have participated in the [capital purchase program]," said G. William Beale, Union Bankshares' president and chief executive officer.

A recent equity offering netted $59 million in mid-September and will provide for any growth opportunities, Beale said.

Union Bankshares also plans to repurchase the common stock warrant issued to the Treasury. That warrant, initially exercisable for 422,636 shares of UBSH's common stock, was reduced by 50 percent to 211,318 shares after the company's successful public offering.

The company has 15 days from yesterday's repurchase to determine whether it will offer to repurchase the common share warrant or allow the Treasury to liquidate the warrant in the open market.

Union Bankshares provides banking in the Northern, Central, Rappahannock, Tidewater and Northern Neck regions through its subsidiaries, Union Bank and Trust Co., Northern Neck State Bank and Rappahannock National Bank.

Its merger with First Market Bank, a privately held federally chartered saving bank with $1.3 billion in assets and 39 branches in central Virginia, is an all-stock deal valued at $105.4 million.

The combined company will create the largest Virginia-based community bank, with 95 branches and total assets of $4 billion. The transaction is pending regulatory approval with the closing expected early in the first quarter. -- Carol Hazard