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.

David J. Fairchild figured he would follow his father into the family insurance business. But that didn’t happen. His father died early, and the business was sold. “I never thought about being a banker,“ said Fairchild.

First Market Bank and Union Bank and Trust will combine operations with a new name—rather than operate as separate banks—when their parent companies merge. The initial merger deal between First Market and Union Bankshares Corp. called for First Market to operate as a separate subsidiary under the combined publicly traded firm to be called Union First Market Bankshares Corp.

Two local banks are trying to shake loose the new-home construction market, which has been in a slump for more than two years. First Market Bank and Union Bankshares Corp. are undercutting prevailing mortgage interest rates by nearly a full percentage point—but with a caveat. The loans are only on homes that the banks financed for builders.

First Market Bank is hooking up with a bigger state bank, creating the largest Virginia-based financial institution. First Market Bank, mostly owned by Ukrop’s Super Markets Inc., said yesterday that it plans to join Union Bankshares Corp. in Bowling Green in a deal valued at $105 million.