TARP banks announce merger

Union Bankshares Corp., a Virginia company that got $59 million in taxpayer capital through the Troubled Asset Relief Program, is acquiring another bank that got $33.9 million in federal aid.

Union Bankshares said it signed an agreement to buy First Market Bank, of Richmond, Va., in an all-stock deal worth $105.4 million.

Union Bankshares is based in Bowling Green. It said the merger would make it the largest Virginia-based community banking organization, with 97 branches and more than $3.9 billion in assets.

The banks said they expected to complete the merger by the end of the year. The combined company will have headquarters in Richmond and operate under the name Union First Market Bankshares Corp.

Union Bankshares currently has three operating units - Union Bank, Northern Neck State Bank and Rappahannock National Bank.

Union Bankshares is a publicly traded company. It had profits of $14.5 million last year, down 26.5 percent from 2007.

First Market Bank is privately held. It has 39 branches, mostly in the Richmond area, and more than $1.3 billion in assets.

Union Bankshares sold $59 million in preferred stock to the Treasury Department in December as part of the $700 billion TARP initiative. First Market got $33.9 million last month.

First Market's shareholders will control roughly one-third of the combined company. The bank is owned by Ukrop's Super Markets Inc., a grocery chain that houses many of its branches, members of the Ukrop family and Markel Corp., a property and casualty insurer.