- Proxy Soliciting Materials (revised) (PRER14A)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No. 2)

Filed by the Registrant     x

Filed by a Party other than the Registrant     ¨

Check the appropriate box:

FIRST BANKSHARES, INC.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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PRELIMINARY—SUBJECT TO COMPLETION

		First Bankshares, Inc.

PROPOSED MERGER—YOUR VOTE IS VERY IMPORTANT

The boards of directors of First Bankshares, Inc. and Xenith Corporation are pleased to deliver this joint proxy statement for the combination of our two companies through a merger of Xenith Corporation with and into First Bankshares. Under the terms of the agreement of merger and the related plan of merger, both as amended, First Bankshares shareholders may elect to retain some or all of their shares in the combined company or to receive $9.23 in cash per share, subject to proration in the event the aggregate cash elections exceed 25% of the shares of First Bankshares common stock outstanding immediately prior to the effective time of the merger, as described in this joint proxy statement. It is estimated that Xenith Corporation shareholders will receive approximately 0.9068 shares in the combined company for each share of Xenith Corporation common stock they own, with the exact exchange ratio determined immediately prior to the effective time based on the book value per share of Xenith Corporation common stock at such time divided by $9.23, as described in this joint proxy statement. We believe that the combined company, which will operate under the name Xenith Bankshares, Inc., will have a strong capital base, which will permit it to expand its business within Hampton Roads, Virginia and beyond to Richmond, Virginia and Northern Virginia, and to increase its opportunities for sound and profitable growth. The initial board of directors of Xenith Bankshares will consist of the existing directors of Xenith Corporation and three additional directors designated by First Bankshares.

The boards of directors of First Bankshares and Xenith Corporation unanimously (1) determined that the agreement of merger and the related plan of merger and the transactions contemplated thereby are fair to and in the best interests of their respective shareholders, (2) approved and adopted the agreement of merger and the related plan of merger and the transactions contemplated thereby and (3) recommend that their respective shareholders vote FOR the proposal to approve the agreement of merger and the related plan of merger and the transactions contemplated thereby, referred to herein as the merger proposal. In addition, the board of directors of First Bankshares unanimously approved and recommends that its shareholders vote FOR the various proposals to amend its articles of incorporation and to elect directors of First Bankshares and other matters described herein.

First Bankshares common stock is listed on the NASDAQ Capital Market under the symbol SUFB. Xenith Corporation is a privately-held company, and its common stock is not publicly traded. We anticipate that after the merger Xenith Bankshares common stock will be listed on the NASDAQ Capital Market under the symbol XBKS.

This joint proxy statement provides detailed information about the merger, the annual meeting of First Bankshares shareholders and the special meeting of Xenith Corporation shareholders. It also provides information about the First Bankshares common stock to be issued to Xenith Corporation shareholders in the event the merger is approved.

Please carefully review and consider the information contained in this joint proxy statement, including the discussion under the heading “ RISK FACTORS ” beginning on page 17, before voting your shares.

Your vote is very important! As described in this joint proxy statement, we cannot complete the merger unless we obtain the necessary government approvals and unless the holders of at least a majority of the outstanding shares of common stock of both First Bankshares and Xenith Corporation approve the merger proposal. The failure to vote, or abstention from voting, by any shareholder of First Bankshares or Xenith Corporation with regard to the merger proposal, or by any shareholder of First Bankshares with regard to the proposals to amend the First Bankshares articles of incorporation, will have the same effect as a vote against the proposals.

It is important that your shares are represented at your shareholder meeting, whether or not you plan to attend the meeting. Accordingly, please complete, date, sign, and return promptly your proxy card in the enclosed envelope. You may attend the meeting and vote your shares in person if you wish, even if you have previously returned your proxy.

We thank you for your consideration and continued support!

Neither the Securities and Exchange Commission, referred to herein as the SEC, nor any state securities commission has approved or disapproved the securities to be issued in the merger or determined if this joint proxy statement is truthful or complete. Any representation to the contrary is a criminal offense.

The securities to be issued in the merger are not savings or deposit accounts and are not insured by the Federal Deposit Insurance Corporation or any other federal or state governmental agency.

This joint proxy statement is dated [              ], 2009. It is first being mailed to shareholders of First Bankshares and Xenith Corporation on or about [              ], 2009.

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First Bankshares, Inc.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON SEPTEMBER [    ], 2009

To the Shareholders of First Bankshares, Inc.:

The annual meeting of shareholders of First Bankshares, Inc. will be held at its North Suffolk office, 3535 Bridge Road, Suffolk, Virginia, on September [      ], 2009 at [      :           .m.], Eastern Time, for the following purposes:

1. To approve the agreement of merger, dated as of May 12, 2009, and amended as of August 14, 2009, between First Bankshares, Inc. and Xenith Corporation, the related plan of merger, and the transactions contemplated thereby, as the same may be amended from time to time (the “merger proposal”) (see Proposal I);

2. To approve an amendment to the First Bankshares articles of incorporation to change the name of First Bankshares, Inc. to Xenith Bankshares, Inc. effective at the effective time of the merger (see Proposal II);

3. To approve an amendment to the First Bankshares articles of incorporation to increase the number of authorized shares of First Bankshares common stock from 10 million to 100 million effective at the effective time of the merger (see Proposal III);

4. To approve an amendment to the First Bankshares articles of incorporation to authorize the issuance of up to 25 million shares of preferred stock effective at the effective time of the merger (see Proposal IV);

5. To approve an amendment to the First Bankshares articles of incorporation to amend certain shareholder voting requirements effective at the effective time of the merger (see Proposal V);

6. To approve an amendment to the First Bankshares articles of incorporation to establish cause as the sole standard for removing directors effective at the effective time of the merger (see Proposal VI);

7. To approve an amendment to the First Bankshares articles of incorporation to amend the procedures for persons other than directors and officers seeking indemnification from First Bankshares effective at the effective time of the merger (see Proposal VII);

8. To elect as directors the nine nominees to the First Bankshares board of directors named in the joint proxy statement, for terms expiring at the 2010 annual meeting or until their successors are duly elected and qualified or until such directors resign as provided in the merger proposal (see Proposal VIII);

9. To approve any motion to adjourn or postpone the annual meeting to a later date or dates, if necessary, to solicit additional proxies if there are insufficient votes at the time of the annual meeting to achieve a quorum or to approve any of the proposals above (see Proposal IX); and

10. To transact such other business as may properly come before the annual meeting or any adjournment or postponement thereof.

Under Virginia law, you will not have the right to assert appraisal rights with respect to the merger.

The accompanying joint proxy statement further describes the matters to be considered at the annual meeting. Copies of the agreement of merger and the related plan of merger, both as amended, (including the proposed amended and restated articles of incorporation of Xenith Bankshares, Inc.) have been included as Annex A and Annex B , respectively, to the accompanying joint proxy statement.

The First Bankshares board of directors has set August 17, 2009 as the record date for the annual meeting. Only holders of record of shares of First Bankshares common stock at the close of business on August 17, 2009 will be entitled to notice of and to vote at the annual meeting and any adjournment or postponement thereof.

You are cordially invited to attend the annual meeting. To ensure your representation at the First Bankshares annual meeting, please complete and return the enclosed proxy card in the envelope marked “PROXY CARD ENCLOSED.” Please vote promptly whether or not you expect to attend the annual meeting. Submitting a proxy now will not prevent you from being able to vote at the annual meeting by attending in person and casting a vote.

The First Bankshares board of directors unanimously recommends that you vote FOR each of the annual meeting proposals, all of which are described in detail in the accompanying joint proxy statement.

[              ], 2009

PLEASE VOTE YOUR SHARES PROMPTLY. YOU CAN FIND INSTRUCTIONS FOR VOTING ON THE ENCLOSED PROXY CARD. IF YOU HAVE QUESTIONS ABOUT THE PROPOSALS OR ABOUT VOTING YOUR SHARES, PLEASE CONTACT REGAN & ASSOCIATES, INC. AT (800) 737-3426 (TOLL FREE) OR VIA EMAIL AT INFO@REGANPROXY.COM.

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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON SEPTEMBER [    ], 2009

To the Shareholders of Xenith Corporation:

A special meeting of shareholders of Xenith Corporation will be held at The Commonwealth Club, 401 West Franklin Street, Richmond, Virginia, on September [      ], 2009 at [      :           .m.], Eastern Time, for the following purposes:

1. To approve the agreement of merger, dated as of May 12, 2009, and amended as of August 14, 2009, between First Bankshares, Inc. and Xenith Corporation, the related plan of merger, and the transactions contemplated thereby, as the same may be amended from time to time (the “merger proposal”) (see Proposal I);

2. To approve any motion to adjourn or postpone the special meeting to a later date or dates, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to achieve a quorum or to approve the merger proposal (see Proposal IX); and

3. To transact such other business as may properly come before the special meeting or any adjournment or postponement thereof.

Under Virginia law, Xenith Corporation shareholders have the right to assert appraisal rights with respect to the merger and demand in writing that Xenith Corporation pay the fair value of your shares of Xenith Corporation common stock. In order to exercise and perfect appraisal rights, generally you must:

A copy of the applicable Virginia statutory provisions is included in the joint proxy statement as Annex D , and a more detailed description of the procedures to demand and perfect appraisal rights is included in the section entitled “PROPOSAL I – APPROVAL OF THE MERGER AND RELATED MATTERS—Dissenting Xenith Corporation Shareholders.”

The accompanying joint proxy statement further describes the matters to be considered at the special meeting. Copies of the agreement of merger and the related plan of merger, both as amended, have been included as Annex A and Annex B , respectively, to the accompanying joint proxy statement.

The Xenith Corporation board of directors has set August 19, 2009 as the record date for the special meeting. Only holders of record of shares of Xenith Corporation common stock at the close of business on August 19, 2009 will be entitled to notice of and to vote at the special meeting and any adjournment or postponement thereof.

You are cordially invited to attend the special meeting. To ensure your representation at the Xenith Corporation special meeting, please complete and return the enclosed proxy card. Please vote promptly whether or not you expect to attend the special meeting. Submitting a proxy now will not prevent you from being able to vote at the special meeting by attending in person and casting a vote.

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The Xenith Corporation board of directors unanimously recommends that you vote FOR the merger proposal and FOR the proposal to approve any motion to adjourn or postpone the special meeting to a later date or dates if necessary to solicit additional proxies.

[              ], 2009

PLEASE VOTE YOUR SHARES PROMPTLY. YOU CAN FIND INSTRUCTIONS FOR VOTING ON THE ENCLOSED PROXY CARD. IF YOU HAVE QUESTIONS ABOUT THE PROPOSALS OR ABOUT VOTING YOUR SHARES, PLEASE CONTACT W. JEFFERSON O’FLAHERTY, EXECUTIVE VICE PRESIDENT OF XENITH CORPORATION, AT (804) 433-2200.

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ABOUT THIS JOINT PROXY STATEMENT

You should read carefully the detailed information set forth in this joint proxy statement, including the “ RISK FACTORS ” section beginning on page 17, before deciding how to vote your shares. Unless otherwise specified in this joint proxy statement or the context otherwise requires:

As noted below, the surviving legal entity in the merger will be First Bankshares, which, as noted below, will change its name to Xenith Bankshares in the merger if First Bankshares shareholders approve Proposal II. References in this joint proxy statement to “Xenith Bankshares common stock” are to the common stock of the surviving legal entity in the merger.

You should rely only on the information contained in this joint proxy statement regarding the matters to be considered at the shareholder meetings. Neither First Bankshares nor Xenith Corporation has authorized anyone to provide you with information that is different from what is contained in this joint proxy statement. This joint proxy statement is dated [              ], 2009. You should not assume that the information contained in the joint proxy statement is accurate as of any date other than such date, and neither the mailing of this joint proxy statement to shareholders nor the issuance of Xenith Bankshares common stock in the merger will create any implication to the contrary.

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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SHAREHOLDER MEETINGS

The following questions and answers briefly address some commonly asked questions about the First Bankshares and Xenith Corporation shareholder meetings. They do not address all questions and do not include all the information that may be important to you as a shareholder of First Bankshares or Xenith Corporation. We urge you to carefully read this entire joint proxy statement, including the annexes to this joint proxy statement .

The merger cannot be completed unless the First Bankshares and Xenith Corporation shareholders approve the merger proposal. First Bankshares is holding its annual meeting and Xenith Corporation is holding a special meeting to vote on the proposals necessary to complete the merger. Information about these meetings, the merger and other business to be considered by shareholders is contained in this joint proxy statement.

The Xenith Corporation special meeting is scheduled to take place on September [     ] , 2009 at [      :           .m.], Eastern Time, at The Commonwealth Club, 401 West Franklin Street, Richmond, Virginia.

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For each share of Xenith Corporation stock that you own at the effective time of the merger, it is estimated that you will receive approximately 0.9068 shares of Xenith Bankshares common stock, with the exact exchange ratio determined immediately prior to the effective time of the merger based on the book value per share of Xenith Corporation common stock at such time divided by $9.23, as described in this joint proxy statement. For more information, see “PROPOSAL I – APPROVAL OF THE MERGER AND RELATED MATTERS—Merger Consideration” on page 57 and “—Cash Election; Surrender of Stock Certificates” on page 60.

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If you revoke your cash election form and do not submit a subsequent cash election form prior to the election deadline, you will be deemed to have not made a cash election with respect to your shares of First Bankshares common stock.

If First Bankshares shareholders approve Proposal II, and if you are a First Bankshares shareholder and have not elected to receive cash for any of your First Bankshares shares, the stock certificates for your shares of First Bankshares (whether they refer to SuffolkFirst Bank or First Bankshares) will represent that same number of shares of Xenith Bankshares common stock at the effective time of the merger. Promptly following the merger, the exchange agent will forward to you instructions regarding how to surrender those First Bankshares stock certificates and receive Xenith Bankshares stock certificates for the same number of shares.

If First Bankshares shareholders do not approve Proposal II and you are a First Bankshares shareholder, the stock certificates for your shares of First Bankshares that have not been exchanged for cash will automatically represent an equal number of shares of common stock of the combined company and will not need to be exchanged.

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If you are a Xenith Corporation shareholder, promptly after the merger is completed, the exchange agent will automatically deliver to you a stock certificate for the number of shares of Xenith Bankshares common stock equal to your shares of Xenith Corporation common stock multiplied by the exchange ratio. If you are a Xenith Corporation shareholder, you will not receive any fractional shares of Xenith Bankshares common stock. Instead, you will receive a cash payment (without interest) in lieu of such fractional share in an amount determined by multiplying the fractional share interest to which you would otherwise be entitled by $9.23.

Yes, if you are a Xenith Corporation shareholder, because the number of shares of Xenith Bankshares common stock received by Xenith Corporation shareholders will be based on the book value of Xenith Corporation immediately prior to the effective time of the merger. Any delay in closing the merger or any unanticipated expenses will reduce the number of shares of Xenith Bankshares common stock to be received by Xenith Corporation shareholders in the merger. In addition, the value of the merger consideration to be received by Xenith Corporation shareholders will fluctuate based on the market price of First Bankshares common stock, which could change for a variety of reasons, many of which are out of First Bankshares’ control.

In addition, if you are a First Bankshares shareholder of record and you are interested in receiving cash for any of your First Bankshares shares, you should make an election as indicated on the cash election form and return the signed cash election form, which will be sent under separate cover, along with your original stock certificate(s) in the separate envelope marked “ELECTION FORM ENCLOSED” as soon as possible and in any event so that it is received prior to the election deadline.

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If you hold your shares of First Bankshares common stock in “street name” ( i.e., your bank, broker or other financial intermediary holds your shares for you), you should receive instructions regarding cash election procedures directly from your bank or broker. If you have any questions regarding these procedures, you should contact your bank or broker directly, or you may contact First Bankshares at the address or telephone number listed on page 16.

If you choose either of the first or second methods, you must submit your notice of revocation or your new proxy card no later than the beginning of the shareholder meeting or, if the shareholder meeting is adjourned or postponed, before the adjourned or postponed meeting is actually held. If you are a First Bankshares shareholder, your submissions must be mailed to First Bankshares’ Corporate Secretary at the address listed on page 16. If you are a Xenith Corporation shareholder, your submissions must be mailed to Xenith Corporation’s Corporate Secretary at the address listed on page 16.

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If you are a shareholder of Xenith Corporation common stock, if you have not voted in favor of the merger and have demanded appraisal for your shares in accordance with the Virginia Stock Corporation Act, your shares will not be converted into a right to receive shares of Xenith Bankshares. Instead, you will have only the rights given to dissenting shareholders pursuant to Article 15 of the Virginia Stock Corporation Act, unless you later fail to perfect your right to appraisal or otherwise withdraw or lose your right to appraisal. If you fail to perfect, withdraw or otherwise lose your right to appraisal, your shares will be treated as if they had converted into the right to receive the number of shares of Xenith Bankshares common stock that you are entitled to receive under the merger agreement. You are urged to consult Article 15 of the Virginia Stock Corporation Act, which is reprinted in its entirety as Annex D to this joint proxy statement.

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RISK FACTORS

In addition to the other information included in this joint proxy statement, you should carefully consider the material risks described below before deciding how to vote your shares.

Risks Related to the Merger

The operating performance and financial position of First Bankshares could deteriorate and Xenith Corporation could still be obligated to complete the merger, except in limited circumstances.

As described in “—Risks Related to the Banking Industry” beginning on page 21, and “—Risks Related to the Combined Company” beginning on page 23, financial institutions throughout the country, including First Bankshares, are faced with significant challenges resulting from the current economic environment. It is possible that First Bankshares could incur losses, be required by regulators or elect to increase its loan loss reserve or otherwise see its operating performance, financial position or prospects weaken. In such circumstances, Xenith Corporation will be obligated to complete the merger unless such developments constitute, or could reasonably be expected to result in, a material adverse effect, as such term is defined in the merger agreement, on First Bankshares or cause a representation or warranty of First Bankshares to be materially untrue at the completion of the merger.

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Although the merger is conditioned on Xenith Corporation having raised gross proceeds of not less than $40.0 million in a private offering of its common stock, it is not certain how much of those proceeds will consist of cash available for use in Xenith Bankshares’ operations after the completion of the merger.

Among other conditions, the completion of the merger is conditioned upon Xenith Corporation having completed a private offering of its common stock resulting in gross proceeds (including amounts previously contributed and amounts committed to be contributed) available at the completion of the merger of not less than $40.0 million. On June 26, 2009, Xenith Corporation sold an aggregate of 4,758,100 shares of its common stock at a price of $10.00 per share, resulting in gross proceeds to Xenith Corporation of $47.58 million. The calculation of the gross proceeds from the private offering, however, includes shares of Xenith Corporation common stock that were issued to BankCap Partners Fund in satisfaction of all advances for organizational expenses made prior to the completion of the private offering ($9.0 million) and future advances for organizational expenses committed to be made by BankCap Partners Fund during the period beginning on the closing date of the private offering and ending immediately prior to the completion of the merger ($1.75 million). In the event that BankCap Partners Fund does not advance all of the committed $1.75 million prior to the completion of the merger for organizational expenses, it will pay Xenith Corporation an amount in cash equal to the portion of the $1.75 million that it has not advanced as of that date as the final payment for its shares. Assuming that (i) the merger is completed on September 30, 2009 and (ii) Xenith Corporation does not incur any unanticipated expenses, Xenith Corporation does not expect to draw on the amount committed to be advanced by BankCap Partners Fund for pre-merger organizational expenses. Consequently, Xenith Corporation estimates that the actual cash proceeds from the private offering will be approximately $38.40 million (after deducting offering costs of $181,000). Xenith Corporation expects to use the cash proceeds from the private offering to fund (i) a cash payment of $600,000 to an affiliate of BankCap Partners Fund for a licensing and administrative support services agreement and (ii) a cash payment of up to $5.25 million to cash-electing First Bankshares shareholders in the merger. As such, the net cash proceeds from the private offering that will be available for use by Xenith Bankshares in its operations upon completion of the merger will be less than $47.58 million. Based on the assumptions discussed above, Xenith Corporation estimates that the net cash proceeds from the private offering available for use in Xenith Bankshares operations following the completion of the merger will be approximately $32.55 million. See “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF XENITH CORPORATION—Private Offering” beginning on page 148 for more information.

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Combining Xenith Corporation and First Bankshares may be more difficult, costly or time-consuming than expected, or could result in the loss of customers.

Xenith Corporation and First Bankshares have operated, and, until the completion of the merger, will continue to operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of ongoing business or inconsistencies in standards, controls, procedures and policies that adversely affect First Bankshares’ ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits of the merger. Integration efforts between the two companies will also divert management attention and resources. These integration matters could have an adverse effect on each company during the pre-merger transition period and on the combined company, Xenith Bankshares, for an undetermined period after the completion of the merger. As with any merger involving banking institutions, there also may be disruptions that cause us to lose customers or cause customers to withdraw their deposits. There can be no assurance that customers will readily accept changes to their banking arrangements after the completion of the merger.

The proposed merger is subject to the receipt of consents and approvals from government entities that may not be received or that may impose conditions that could have an adverse effect on the combined company.

Before the merger may be completed, various approvals or consents must be obtained from the Federal Reserve Board and various bank regulatory and other authorities. These governmental entities, including the Federal Reserve Board, may not permit the merger or may impose conditions on the completion of the merger or require changes to the terms of the merger. Although we currently expect that required consents and approvals will be received and that no such conditions or changes will be imposed, there can be no assurance in that regard. Any such conditions or changes could have the effect of delaying completion of the merger or imposing additional costs on or limiting the revenues of the combined company following the merger, any of which might have a material adverse effect on the combined company following the merger.

The market price of Xenith Bankshares common stock may be lower than that of First Bankshares common stock or lower than the $9.23 cash election price.

Changes in the market price of Xenith Bankshares common stock may result from a variety of factors, including general market and economic conditions, changes in Xenith Bankshares’ business, operations and prospects, and regulatory considerations. Many of these factors will be beyond Xenith Bankshares’ control. There can be no assurance that the market price of Xenith Bankshares common stock following the completion of the merger will not be lower than the current market price of First Bankshares common stock or the $9.23 cash election price.

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The unaudited pro forma condensed combined financial information included in this joint proxy statement is presented for illustrative purposes only and Xenith Bankshares’ actual financial position and results of operations after the merger may differ materially from the unaudited pro forma condensed combined financial information included in this joint proxy statement.

The unaudited pro forma condensed combined financial information in this joint proxy statement is presented for illustrative purposes only and is not necessarily indicative of what Xenith Bankshares’ actual financial position or results of operations would have been had the merger been completed on the dates indicated. This data reflects adjustments, which are based upon preliminary estimates, to allocate the purchase price to First Bankshares’ net assets and liabilities based on their estimated fair values. The purchase price allocation reflected in this joint proxy statement is preliminary, and final allocation of the purchase price will be based upon the actual purchase price and the fair value of the assets and liabilities of First Bankshares as of the date of the completion of the merger. In addition, subsequent to the merger completion date, there may be further refinements of the purchase price allocation as additional information becomes available. Accordingly, the final acquisition accounting adjustments may differ materially from the pro forma adjustments reflected in this joint proxy statement. See “UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION” for more information.

The directors and executive officers of First Bankshares and Xenith Corporation have financial interests in the merger that are different from, or in addition to, the interests of the shareholders of First Bankshares and Xenith Corporation.

Executive officers of First Bankshares and Xenith Corporation negotiated the terms of the merger agreement, and the boards of directors of First Bankshares and Xenith Corporation unanimously approved the merger agreement and the transactions contemplated thereby. In considering these facts and the other information contained in this joint proxy statement, you should be aware that certain executive officers and directors of First Bankshares and Xenith Corporation are expected to receive certain benefits in connection with the merger, including entry into employment agreements and seats on the boards of directors of Xenith Bankshares or Xenith Bank or both. See “PROPOSAL I – APPROVAL OF THE MERGER AND RELATED MATTERS—Interests of Directors and Executive Officers in the Merger” for more information.

Although the members of the board of directors of each of First Bankshares and Xenith Corporation were aware of these additional interests and considered them when they approved the merger agreement and the transactions contemplated thereby, shareholders of First Bankshares and Xenith Corporation should understand that some of the directors and officers of First Bankshares and Xenith Corporation will receive benefits or other payments in connection with the merger that other shareholders will not receive.

The following risk factors related to the merger address issues of particular interest to First Bankshares shareholders. However, these risk factors may also be material to shareholders of Xenith Corporation in deciding how to vote their shares in connection with the merger proposal. Accordingly, we encourage all shareholders of First Bankshares and Xenith Corporation to read the following risk factors .

Completion of the merger will result in a “change of control” of First Bankshares, and shareholders of First Bankshares will have less influence on the management and policies of Xenith Bankshares than they had on First Bankshares before the merger.

After the merger is complete, it is anticipated that approximately 74.03% of the shares of Xenith Bankshares, on a fully diluted basis, will be held by former shareholders of Xenith Corporation and approximately 25.97% by former shareholders of First Bankshares. In addition, the board of directors of Xenith Bankshares will include the current seven directors of Xenith Corporation and three directors of First Bankshares (on an initial board of 10 directors). Thus, the merger will be considered to effect a “change of control” of First Bankshares. Consequently, shareholders of First Bankshares will have less influence on the management and policies of Xenith Bankshares after the merger than they now have on the management and policies of First Bankshares. For more information about the board of directors and management of Xenith Bankshares, see “PROPOSAL I – APPROVAL OF THE MERGER AND RELATED MATTERS—Management and Operations after the Merger.”

First Bankshares shareholders who are entitled to vote at the annual meeting approximately 16.7% of First Bankshares common stock outstanding as of the record date for the annual meeting have entered into a voting agreement pursuant to which they have agreed to vote their shares of First Bankshares common stock for approval of the merger proposal.

                First Bankshares’ current articles of incorporation provide that the merger proposal must be approved by the affirmative vote of the holders of a majority of First Bankshares’ outstanding common stock. As an inducement to Xenith Corporation to enter into the merger agreement, each of First Bankshares’ officers and directors, and certain affiliates and family members related to such persons, entered into a voting agreement with Xenith Corporation. Pursuant to the voting agreement, these existing First Bankshares shareholders have agreed, subject to certain very limited exceptions, to vote all their shares of First Bankshares common stock owned or subsequently acquired by them to approve the merger proposal. As of the record date for the annual meeting, these shareholders were entitled to vote at the annual meeting approximately 16.7% of the outstanding shares of First Bankshares common stock entitled to vote at the annual meeting. The existence of this voting agreement makes it more difficult for First Bankshares shareholders who do not vote for the merger proposal to prevent the approval of the merger proposal. See “PROPOSAL I – APPROVAL OF THE MERGER AND RELATED MATTERS—Voting Agreements.”

If you are a First Bankshares shareholder and you tender some or all of your shares of First Bankshares common stock to make a cash election, you will not be able to sell those shares unless you revoke your cash election with respect to those shares prior to the cash election deadline.

If you are a First Bankshares shareholder of record and want to make a valid cash election, you will need to deliver your stock certificate(s) (or an affidavit for lost certificates) and a properly completed and signed cash election form, which will be sent to you under separate cover, to the exchange agent prior to the cash election deadline, which is 5:00 p.m., Eastern Time, September [__], 2009. You will not be able to sell any shares of First Bankshares common stock that you have delivered as part of your cash election unless you revoke your cash election before the cash election deadline by providing written notice of revocation to the exchange agent. If you do not revoke your cash election, you will not be able to sell your shares of First Bankshares common stock for any reason until you receive cash or shares of Xenith Bankshares common stock in the merger. In the time between the cash election deadline and the closing of the merger, the market price of First Bankshares common stock may change, and you might otherwise want to sell your shares of First Bankshares common stock to gain access to cash, make other investments, or for other reasons. The date that you will receive your merger consideration depends on the completion date of the merger, which is uncertain. The completion date of the merger might be later than expected due to unforeseen events, such as delays in obtaining regulatory approvals. See “PROPOSAL I – APPROVAL OF THE MERGER AND RELATED MATTERS—Cash Election; Surrender of Stock Certificates” on page 60 for more information.

First Bankshares shareholders may not receive merger consideration in the proportion of cash or both stock and cash they elect.

Shareholders of First Bankshares may elect to retain their shares of First Bankshares common stock or to receive $9.23 in cash per share, subject to proration in the event the aggregate cash elections exceed 25% of the total number of shares of First Bankshares common stock outstanding immediately prior to the effective time of the merger. As such, if all First Bankshares shareholders elected to receive cash for all of their shares of First Bankshares common stock, each shareholder would receive cash for only one-quarter of his or her shares and would retain the other three-quarters of his or her shares, notwithstanding his or her elections. Accordingly, at the time a cash-electing First Bankshares shareholder votes on the proposal to approve the merger, he or she would only be guaranteed to receive cash for 25% of his or her shares.

Shareholders of First Bankshares who elect to receive cash in the merger will limit or eliminate their participation in future growth of Xenith Bankshares.

To the extent shareholders of First Bankshares receive cash in the merger, they will own less interest in Xenith Bankshares, which will afford them less opportunity to participate in future growth, if any, in the value of Xenith Bankshares. If a First Bankshares shareholder receives cash in the merger for all of his or her shares of First Bankshares common stock, he or she will not participate at all in future growth, if any, in the value of Xenith Bankshares.

Upon completion of the merger, First Bankshares’ articles of incorporation, to the extent First Bankshares shareholders approve Proposals II through VII, and bylaws will be amended and restated and First Bankshares shareholders who elect to retain some or all of their First Bankshares common stock will have different rights as shareholders that may be less advantageous than their current rights.

While First Bankshares will be the surviving legal entity in the merger, operating under the new name Xenith Bankshares, its articles of incorporation, to the extent First Bankshares shareholders approve Proposals II through VII, and bylaws will be amended and restated in connection with the merger. As such, while First Bankshares shareholders may elect to retain some or all of their shares of First Bankshares common stock, which will become shares of Xenith Bankshares common stock, the articles of incorporation and bylaws governing their rights as shareholders will change. A First Bankshares shareholder may conclude that his or her current rights under the existing First Bankshares articles of incorporation and bylaws are more advantageous than the rights they may have as shareholders of Xenith Bankshares under the amended and restated articles of incorporation and bylaws of Xenith Bankshares. For more information, see “COMPARATIVE RIGHTS OF SHAREHOLDERS.”

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The merger agreement limits First Bankshares’ ability to pursue alternative transactions to the merger and requires First Bankshares to pay a termination fee if it does.

The merger agreement prohibits First Bankshares and its directors, officers, representatives and agents from soliciting, authorizing the solicitation of or, subject to very narrow exceptions, entering into discussions with any third party regarding alternative acquisition proposals. The prohibition limits First Bankshares’ ability to pursue offers that may be superior from a financial point of view from other possible acquirers. If First Bankshares receives an unsolicited proposal from a third party that is superior from a financial point of view to that made by Xenith Corporation and the merger agreement is terminated, First Bankshares would be required to pay a $1.0 million termination fee.

If the merger is not completed, First Bankshares will have incurred substantial expenses without realizing the expected benefits of the merger.

First Bankshares has incurred substantial expenses in connection with the merger. The completion of the merger depends on the satisfaction of certain conditions including the approval of both companies’ shareholders and the approval of state and federal regulatory authorities. Neither First Bankshares nor Xenith Corporation can guarantee that these conditions will be met. If the merger is not completed, these expenses could have a material adverse impact on the financial condition of First Bankshares because it would not have realized the expected benefits of the merger.

The following risk factors related to the merger address issues of particular interest to Xenith Corporation shareholders. However, these risk factors may also be material to shareholders of First Bankshares in deciding how to vote their shares in connection with the merger proposal and whether to elect to receive cash for all or for a portion of their shares. Accordingly, we encourage all shareholders of Xenith Corporation and First Bankshares to read the following risk factors.

Xenith Corporation shareholders who are entitled to vote at the special meeting over 50% of Xenith Corporation common stock outstanding as of the record date for the special meeting have entered into a voting agreement pursuant to which they have agreed to vote their shares of Xenith Corporation common stock for approval of the merger proposal.

Xenith Corporation’s current articles of incorporation provide that the merger proposal must be approved by the affirmative vote of the holders of a majority of Xenith Corporation outstanding common stock. As an inducement to First Bankshares to enter into the merger agreement, each of Xenith Corporation’s shareholders existing as of the date of the merger agreement, BankCap Partners Fund and T. Gaylon Layfield, III, entered into a voting agreement with First Bankshares. Pursuant to the voting agreement, these shareholders have agreed, subject to certain very limited exceptions, to vote all of their shares of Xenith Corporation common stock owned or subsequently acquired by them to approve the merger proposal. As of the record date for the special meeting, these shareholders were entitled to vote at the special meeting approximately 75.7% of the outstanding shares of Xenith Corporation’s common stock entitled to vote at the special meeting. Accordingly, it is expected that the merger proposal will be approved by Xenith Corporation shareholders regardless of whether any Xenith Corporation shareholders who are not party to this voting agreement vote to approve the merger proposal. See “PROPOSAL I – APPROVAL OF THE MERGER AND RELATED MATTERS—Voting Agreements.”

The value of the merger consideration that Xenith Corporation shareholders will receive is not fixed.

Upon the completion of the merger, each share of Xenith Corporation common stock will be converted into the right to receive shares of Xenith Bankshares common stock, pursuant to the terms of the merger agreement. The number of shares of Xenith Bankshares common stock received by each Xenith Corporation shareholder will be based on the net book value per share of Xenith Corporation common stock immediately prior to the effective time of the merger. Xenith Corporation anticipates incurring losses between the date of this joint proxy statement and the closing date of the merger. As a result, any delay in completing the merger or any unanticipated expenses will reduce the number of shares of Xenith Bankshares common stock to be received by Xenith Corporation shareholders in the merger. In addition, the value of the merger consideration to be received by Xenith Corporation shareholders will fluctuate based on the market price of First Bankshares common stock. Stock price changes may result from a variety of factors, including general market and economic conditions, changes in First Bankshares’ business, operations and prospects, and regulatory considerations. Many of these factors are beyond First Bankshares’ control.

Accordingly, at the time that Xenith Corporation shareholders vote with respect to the merger proposal, they will not be able to determine the number of shares of Xenith Bankshares common stock that they will receive in the merger or the value of the Xenith Bankshares common stock they will receive in the merger.

Risks Related to the Banking Industry

Difficult market conditions have adversely affected the banking industry.

Dramatic declines in the housing market over the past two years, with falling home prices and increasing foreclosures, unemployment and under-employment, have negatively impacted the credit performance of real estate related loans and resulted in significant write-downs of asset values by financial institutions. These write-downs, initially of asset-backed securities but spreading to other securities and loans, such as commercial real estate loans, have caused many financial institutions to seek additional capital, to reduce or eliminate dividends, to merge with larger and stronger institutions and, in some cases, to fail. Reflecting concern about the stability of the financial markets generally and the strength of counterparties, many lenders and institutional investors have reduced or ceased providing funding to borrowers, including to other financial institutions. This market turmoil and tightening of credit have led to

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an increased level of commercial and consumer delinquencies, lack of consumer confidence, increased market volatility and widespread reduction of business activity generally. The resulting economic pressure on consumers and commercial borrowers and lack of confidence in the financial markets has adversely affected First Bankshares’ business, financial condition and results of operations. Market developments may affect consumer confidence levels and may cause adverse changes in payment patterns, causing increases in delinquencies and default rates for financial institutions, which may impact charge-offs and provisions for credit and fraud losses. A worsening of these conditions would likely exacerbate the adverse effects of these difficult market conditions on the banking industry and, subsequent to the merger, Xenith Bankshares.

There can be no assurance that enacted legislation or any proposed federal programs will stabilize the U.S. financial system and such legislation and programs may adversely affect First Bankshares and, subsequent to the merger, Xenith Bankshares.

On October 3, 2008, President George W. Bush signed into law the Emergency Economic Stabilization Act of 2008, referred to herein as the EESA. The legislation was the result of a proposal by former Treasury Secretary Henry Paulson to the U.S. Congress in response to the financial crises affecting the banking system and financial markets and threats to investment banks and other financial institutions. Pursuant to the EESA, the Treasury has the authority to, among other things, purchase up to $700 billion of mortgages, mortgage-backed securities and certain other financial instruments from financial institutions for the purpose of stabilizing and providing liquidity to the U.S. financial markets. Also on October 14, 2008, the Treasury announced a program under the EESA pursuant to which it would provide senior preferred stock investments in participating financial institutions. On October 14, 2008, the FDIC announced the Temporary Loan Guarantee Program under the systemic risk exception to the Federal Deposit Act pursuant to which the FDIC would offer a guarantee of certain financial institution indebtedness in exchange for an insurance premium to be paid to the FDIC by issuing financial institutions. Government-sponsored programs resulting from the EESA and the American Recovery and Reinvestment Act of 2009 continue to be announced. Details of these programs, including the Term Asset-Backed Loan Program and the Public-Private Investment Partnership Program, are forthcoming and continue to evolve.

There can be no assurance as to the actual impact that any governmental program will have on the financial markets or the participation of First Bankshares and, subsequent to the merger, Xenith Bankshares in any of these programs will have on its results. The failure of governmental programs to stabilize the financial markets and a continuation or worsening of current financial market conditions could materially and adversely affect the business, financial condition, results of operations, and access to credit of First Bankshares and, subsequent to the merger, Xenith Bankshares.

Contemplated and proposed legislation, state and federal programs, and increased government control or influence may adversely affect First Bankshares and, subsequent to the merger, Xenith Bankshares by increasing the uncertainty in its lending operations and expose it to increased losses, including legislation that would allow bankruptcy courts to permit modifications to mortgage loans on a debtor’s primary residence, moratoriums on a mortgagor’s right to foreclose on property, and requirements that fees be paid to register other real estate owned property. Statutes and regulations may be altered that may potentially increase First Bankshares’ and, subsequent to the merger, Xenith Bankshares’ costs to service and underwrite mortgage loans. Additionally, federal intervention and operation of formerly private institutions may adversely affect First Bankshares’ and, subsequent to the merger, Xenith Bankshares’ rights under contracts with such institutions, the way in which First Bankshares and, subsequent to the merger, Xenith Bankshares conducts business in certain markets and its competitive position.

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Risks Related to the Combined Company

Xenith Corporation does not have a history as an operating company and Xenith Corporation’s existing board of directors and management will comprise a majority of the board of directors and will hold several of the most senior management positions with Xenith Bankshares.

The existing management of Xenith Corporation is not presently managing a going-concern financial institution. Xenith Corporation is the successor to Xenith Bank (In Organization), which was a Virginia bank (in organization) until discussions with First Bankshares led to a decision to terminate the activities of Xenith Bank (In Organization) prior to its receipt of regulatory approvals to open for business, and to change its name to Xenith Corporation. Although the management and board of directors of Xenith Corporation all have extensive backgrounds in the banking business in Virginia, Mr. Layfield has been inactive in the banking business since his retirement in 1997 from Signet Corporation, a major Virginia-based bank holding company that was acquired in 1997 by First Union Corporation (subsequently Wachovia Corporation and now Wells Fargo & Company). At the time of his retirement, Mr. Layfield was serving as President and Chief Operating Officer of Signet Corporation, as well as serving on Signet’s Corporation’s board of directors, its Management Committee, its Asset and Liability Committee and its Credit Policy Committee. Since his retirement, Mr. Layfield has been serving as president of Timber Resource Management, L.L.C., a privately held timber investment management organization. Other members of Xenith Corporation senior management have had more recent experience in the banking industry, but none of such individuals have been actively employed in a banking institution since June 2008. Although it is anticipated that the existing senior management of First Bankshares will continue in substantially their same management roles within the existing branches of Xenith Bank following the merger, the absence of recent employment of Xenith Corporation’s senior management in the banking industry in Virginia could adversely impact the business of Xenith Bankshares following the merger.

The soundness of other financial institutions with which Xenith Bankshares and Xenith Bank will do business could adversely affect Xenith Bankshares and Xenith Bank.

The ability of Xenith Bank to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. Xenith Bankshares and Xenith Bank will have exposure to many different industries and counterparties, including counterparties in the financial industry, such as commercial banks and other institutional clients. As a result, defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry generally, have led to market-wide liquidity problems and could lead to losses or defaults by Xenith Bankshares, Xenith Bank or by other institutions. Many of these transactions will expose Xenith Bankshares and Xenith Bank to credit risk in the event of default of a counterparty or client. In addition, this credit risk may be exacerbated when the collateral held by Xenith Bankshares or Xenith Bank cannot be realized upon or is liquidated at prices not sufficient to recover the full amount of the financial instrument exposure due them. There is no assurance that any such losses would not materially and adversely affect the results of operations of Xenith Bankshares and Xenith Bank.

For example, in the normal course of its business, SuffolkFirst Bank purchased various loan participations in loans made by Silverton Bank National Association, referred to herein as Silverton, and its subsidiary, Specialty Finance Group, LLC, referred to herein as SFG, totaling approximately $20.9 million (or approximately 18.3% of SuffolkFirst Bank’s total loan portfolio as of June 30, 2009). On May 1, 2009, Silverton was closed by the Comptroller of the Currency and the FDIC was appointed as its receiver, charged with the duty of winding up the affairs of Silverton. On May 5, 2009, SuffolkFirst Bank was informally advised that SFG remains open for business and intends to continue to administer participation agreements in accordance with past practices. Ten of SuffolkFirst Bank’s loan participation agreements are with SFG and three are with Silverton. There can be no assurance that the failure of Silverton will not have an adverse effect on SuffolkFirst Bank’s various loan participations with Silverton and SFG, which, in turn, could potentially lead to increased provisions for loan losses and otherwise adversely affect the operating results and financial condition of First Bankshares and SuffolkFirst Bank.

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Because Xenith Bank’s loan portfolio is expected to include a substantial amount of commercial and industrial loans and commercial real estate loans, our earnings will be particularly sensitive to the financial and credit risks associated with these types of loans.

The financial and credit risk associated with commercial and industrial loans is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the size of loan balances, which is generally larger than consumer-type loans, and the effects of general economic conditions. Any significant failure to pay on time by Xenith Bank’s customers or a significant default by Xenith Bank’s customers would hurt the results of operations of Xenith Bankshares.

A significant portion of SuffolkFirst Bank’s loan portfolio is, and Xenith Bank’s loan portfolio will continue to be, secured by income producing property. SuffolkFirst Bank’s commercial real estate loan portfolio, which includes owner-occupied commercial real estate, represented over 60.4% of its total loan portfolio as of June 30, 2009. Underwriting and portfolio management activities cannot eliminate all risks related to these loans. Commercial real estate loans will typically be larger than consumer-type loans and may pose higher risks than other types of loans. In addition, it may be more difficult for commercial real estate borrowers to repay their loans in a timely manner in the current difficult economic climate, as commercial real estate borrowers’ abilities to repay their loans frequently depends on successful development of their properties. In addition, Xenith Bank may incur losses on commercial real estate loans due to declines in occupancy rates, rental rates and capitalization rates, which may decrease property values and may potentially decrease the likelihood that a borrower may find permanent financing alternatives. Currently, the availability of permanent financing alternatives in the market has been reduced and has thereby increased the financing risks inherent in SuffolkFirst Bank’s loan portfolio.

In addition to commercial real estate loans that are or will be secured by commercial real estate, Xenith Bank’s commercial and industrial loans will include owner-occupied real estate loans that are secured in part by the value of the real estate. The primary source of repayment for owner-occupied real estate loans is the cash flow produced by the related commercial enterprise, and the value of the real estate is a secondary source of repayment of the loan. Given the continued weaknesses in the commercial real estate market in general, there may be loans where the value of SuffolkFirst Bank’s collateral has been negatively impacted. Additionally, the weakening of the commercial real estate market may increase the likelihood of default of these commercial real estate loans, which would negatively impact loan portfolio performance and potentially negatively impact the results of operations and asset quality. If SuffolkFirst Bank or Xenith Bank is required to liquidate the collateral securing a loan to satisfy the debt during a period of reduced real estate values, its earnings and capital could be adversely affected. In addition, banking regulators are giving greater scrutiny to commercial real estate lending and may require banks with higher levels of commercial real estate loans to implement improved or additional underwriting, internal controls, risk management policies and portfolio stress testing. In banks with certain levels of commercial real estate loan concentrations, regulators are also considering requiring increased levels of reserves for loan losses as well as the need for additional capital. Any of these events could increase our costs, require management time and attention and negatively impact our business.

If the value of assets securing loans made by SuffolkFirst Bank decline materially, a significant portion of SuffolkFirst Bank’s loan portfolio could become undercapitalized, which could have a material adverse effect on SuffolkFirst Bank and, subsequent to the merger, Xenith Bank.

The loan portfolio of SuffolkFirst Bank contains a significant number of loans that were originated based on values that were higher than values determined under current market conditions. These loans are primarily secured by real estate, the values of which have declined in the Southeastern region of Virginia in which SuffolkFirst Bank operates. As a result, the loans have become under-collateralized, which could leave SuffolkFirst Bank and, subsequent to the merger, Xenith Bank unsecured with respect to a portion of the loan. First Bankshares does not anticipate that current market conditions will increase significantly in the short-term, which may result in losses to SuffolkFirst Bank in the amount of any shortfall between current market value and the remaining principal of the loan in the event of liquidation of the collateral securing such loans. Asset quality issues may arise as a result of the general decrease in market values and could cause First Bankshares’ and, subsequent to the merger, Xenith Bankshares’ interest income and net interest margin to decrease and its provisions for loan losses to increase, which could adversely affect its results of operations and financial condition.

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Decisions regarding credit risk could be inaccurate and the allowance for loan losses may be inadequate, which could materially and adversely affect the business, financial condition, results of operations and future prospects of Xenith Bankshares.

Xenith Bank’s loan portfolio and investments in marketable securities will expose it to credit risk. Inherent risks in lending also include the inability to compete with other lenders, lack of control over fluctuations in interest rates and collateral values, principally real estate, and economic downturns. Making loans will be an essential element of Xenith Bank’s business, and there is a risk that the loans will not be repaid. The risk of nonpayment is affected by a number of factors, including:

As do all financial institutions, SuffolkFirst Bank maintains, and Xenith Bank will maintain, an allowance for loan and lease losses and other reserves to absorb the level of losses in its portfolios. SuffolkFirst Bank has attempted to maintain appropriate reserves to provide for probable losses inherent in SuffolkFirst Bank’s loan portfolio. However, SuffolkFirst Bank’s reserves may not be sufficient to cover the loan and lease losses that it actually incurs. While SuffolkFirst Bank maintains, and Xenith Bank will maintain, a reserve at a level management believes is adequate, its charge-offs could exceed these reserves. See also “—The soundness of other financial institutions with which Xenith Bankshares and Xenith Bank will do business could adversely affect Xenith Bankshares and Xenith Bank” on page 23.

As of June 30, 2009, SuffolkFirst Bank had an allowance for loan and lease losses of $2.2 million, which represented approximately 1.9% of SuffolkFirst Bank’s total loans. The allowance for loan and lease losses reflected an increase of $503,000 over the allowance as of December 31, 2008. At June 30, 2009, non-performing assets were $2.7 million, an increase from $677,000 at December 31, 2008. These non-performing assets represent loans either not currently accruing interest or identified as higher risk loans and any further deterioration in the financial condition of the borrowers associated with those loans could increase SuffolkFirst Bank’s potential loan losses. If SuffolkFirst Bank or, subsequent to the merger, Xenith Bank experiences defaults by borrowers to a greater extent than anticipated, First Bankshares’, or, subsequent to the merger, Xenith Bankshares’ earnings would be negatively impacted.

As of the date of the merger, as part of Xenith Bankshares’ recording of the merger in accordance with acquisition accounting, it will record SuffolkFirst Bank’s loans at fair value and SuffolkFirst Bank’s allowance will be eliminated. To the extent that the credit losses of the loan portfolio are greater than are considered in Xenith Bankshares’ fair value adjustment at the date of acquisition, our earnings would be negatively impacted.

Following the completion of the merger, Xenith Bankshares will review the adequacy of Xenith Bank’s reserves and the underlying estimates on a periodic basis and make adjustments to the reserves when required. However, because there is no precise method of predicting loan losses, there is no assurance that Xenith Bank’s actual losses will not exceed these estimates. As a result, Xenith Bankshares will always face the risk that charge-offs in future periods will exceed Xenith Bank’s reserves and that additional increases in Xenith Bank’s reserves will be required.

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In addition, bank regulatory agencies may require SuffolkFirst Bank before the merger, or Xenith Bank after the merger, to establish additional reserves. Additions to the reserves will result in a decrease in net income and capital and could hinder the ability to grow assets.

Commercial real estate lending guidance issued by the federal banking regulators could impact our operations and capital requirements.

The Federal Reserve Board, the Office of the Comptroller of the Currency and the FDIC, along with the other federal banking regulators, issued final guidance on December 6, 2006, entitled “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices” directed at institutions that have particularly high concentrations of commercial real estate loans within their lending portfolios. This guidance suggests that institutions whose commercial real estate loans exceed certain percentages of capital should implement heightened risk management practices appropriate to their concentration risk and may be required to maintain higher capital ratios than institutions with lower concentrations in commercial real estate lending. Based on SuffolkFirst Bank’s commercial real estate concentration as of June 30, 2009, it is not subject to additional supervisory analysis. We do not anticipate that Xenith Bank’s commercial real estate lending practices will subject it to this guidance. We cannot guarantee that any risk management practices we implement after the completion of the merger will be effective to prevent losses relating to Xenith Bank’s commercial real estate portfolio. Management will undertake controls to monitor Xenith Bank’s commercial real estate lending, but we cannot predict the extent to which this guidance may impact the future operations or capital requirements of Xenith Bankshares.

Failure to implement our business strategies may adversely affect our financial performance.

The directors and executive officers of Xenith Corporation who will be directors and executive officers of Xenith Bankshares following the merger have developed a business plan that details the strategies they intend to implement for Xenith Bank. If they cannot implement their business strategies, Xenith Bank will be hampered in its ability to maintain and develop business and serve its customers, which could in turn have an adverse effect on our financial performance. Even if their business strategies are successfully implemented, they may not have the favorable impact on operations that they anticipate.

Xenith Bankshares may not be able to access funding sufficient to support its asset growth.

Xenith Bankshares’ business plan and marketing strategy will be based on access to funding from local customer deposits, such as checking and savings accounts and certificates of deposits. Deposit levels may be affected by a number of factors, including rates paid by competitors, general interest rate levels, FDIC insurance costs, returns available to customers on alternative investments and general economic conditions. If local customer deposits are not sufficient to fund Xenith Bank’s asset growth, Xenith Bankshares will look to outside sources such as advances from the Federal Home Loan Bank of Atlanta, referred to herein as the FHLB. The FHLB is a secured funding outlet. The ability to access advances from the FHLB will be dependent upon whether and to the extent Xenith Bankshares can provide collateral. Xenith Bankshares may also look to brokered deposits as a source of liquidity as discussed immediately below under “—Xenith Bankshares’ use of brokered deposits may be limited or discouraged by bank regulators, which could adversely impact its liquidity.”

Xenith Bankshares’ use of brokered deposits may be limited or discouraged by bank regulators, which could adversely impact its liquidity.

Depositors that invest in brokered certificates of deposit are generally interest rate sensitive and well-informed about alternative markets and investments. Consequently, these types of deposits may not provide the same stability to a bank’s deposit base as traditional local retail deposit relationships. In addition, Xenith Bankshares’ liquidity may be negatively affected if that funding source experiences supply difficulties due to loss of investor confidence or a flight to other investments. Regulatory developments with respect to wholesale funding, including increased FDIC insurance costs for or limits on the use of these deposits, may further limit the availability of that alternative. In light of regulatory pressure, there may be a cost premium for locally generated certificates of deposit as compared to brokered deposits, which may increase Xenith Bankshares’ expenses.

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SuffolkFirst Bank relies, and Xenith Bank will rely, on short-term funding, which can be adversely affected by local and general economic conditions.

As of June 30, 2009, $23.7 million, or 18.3%, of SuffolkFirst Bank’s deposits, consisted of demand, statement savings, money market, and NOW accounts. The $106.0 million remaining balance of deposits includes certificates of deposit, of which approximately $75.82 million, or 71.54% of SuffolkFirst Bank’s total deposits, is due to mature within one year. The ability of SuffolkFirst Bank or Xenith Bank to attract and maintain deposits, as well as its cost of funds, has been, and will continue to be significantly affected by money market and general economic conditions. If SuffolkFirst Bank or, subsequent to the merger, Xenith Bank increases interest rates paid to retain deposits, its earnings may be adversely affected.

Xenith Bankshares may not be able to raise additional capital on terms favorable to it or at all.

Following the completion of the merger, should Xenith Bankshares need additional capital to support its business, expand its operations or maintain its minimum capital requirements, it may not be able to raise additional funds through the issuance of additional shares of its common stock or other securities. Furthermore, the significant amount of Xenith Bankshares common stock that BankCap Partners Fund will own may discourage other potential investors from offering to acquire newly issued shares. Even if Xenith Bankshares is able to obtain capital through the issuance of additional shares of its common stock or other securities, the sale of these additional shares could significantly dilute the ownership interest of then existing Xenith Bankshares shareholders. In addition, the holders of warrants and options for Xenith Bankshares common stock could exercise them when Xenith Bankshares could otherwise obtain capital by offering additional securities on terms more favorable to it than those provided by the warrants and options.

Failure to manage rapid expansion may adversely affect Xenith Bankshares’ financial performance.

Xenith Bankshares’ ability to offer products and services and implement its business plan successfully in a highly competitive market requires an effective planning and management process. Future expansion efforts, internally or through acquisitions, could be expensive and put a strain on our management, financial, operational, and technical resources. Xenith Bankshares intends to increase the scope of its operations at a rapid rate. Xenith Bankshares also expects to hire a significant number of new employees shortly after the merger closes. To manage future growth effectively, Xenith Bankshares will have to maintain and enhance financial and accounting systems and controls, as well as integrate new personnel and manage expanded operations. There can be no assurance that Xenith Bankshares will be able to manage effectively its expanding operations. If Xenith Bankshares is unable to manage growth effectively, its business, financial condition, and results of operations could be materially and adversely affected.

First Bankshares’ business is, and Xenith Bankshares’ business will be, dependent on technology and an inability to invest in technological improvements or obtain reliable technological support may adversely affect our results of operation and financial condition.

The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products and services. In addition to better serving customers, the effective use of technology increases efficiency and enables financial institutions to reduce costs. Our ability to grow and compete will depend in part upon the ability to address the needs of customers by using technology to provide products and services that will satisfy their operational needs, while managing the costs of expanding our technology infrastructure. Many competitors have substantially greater resources to invest in technological improvements and third-party support. There can be no assurance that either First Bankshares or, subsequent to the merger, Xenith Bankshares will be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to the customers of First Bankshares or, subsequent to the merger, Xenith Bankshares. For the foreseeable future, First Bankshares and, subsequent to the merger, Xenith Bankshares expect to rely on third-party service providers and on other third parties for services and technical support. If those products and services become unreliable or fail, the adverse impact on customer relationships and operations could be material.

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Fluctuations in interest rates could reduce Xenith Bankshares’ profitability as Xenith Bankshares expects to realize income primarily from the difference between interest earned on loans and investments and interest paid on deposits and borrowings of Xenith Bank.

Xenith Bankshares will depend on Xenith Bank for income. Xenith Bank’s earnings will be significantly dependent on its net interest income, as Xenith Bank is expected to realize income primarily from the difference between interest earned on loans and investments and the interest paid on deposits and borrowings. Xenith Bank will experience “gaps” in the interest rate sensitivities of its assets and liabilities, meaning that either its interest-bearing liabilities will be more sensitive to changes in market interest rates than its interest-earning assets, or vice versa. In either event, if market interest rates should move contrary to Xenith Bank’s position, this “gap” may work against Xenith Bank, negatively affecting Xenith Bankshares’ earnings. Neither First Bankshares nor Xenith Corporation is able to predict fluctuations of market interest rates, which are affected by many factors, including inflation, recession, rising in unemployment, tightening money supply, and disorder and instability in domestic and foreign financial markets. Although Xenith Bankshares plans to design its asset-liability management strategy to mitigate its risk from changes in market interest rates, Xenith Bankshares may not be able to prevent changes in interest rates from having a material adverse effect on its results of operations and financial condition.

Xenith Bank will be required to pay higher premiums to the FDIC in 2009 for its federal deposit insurance.

Effective January 1, 2009, the FDIC increased its assessment rates for deposit insurance for all banking institutions. SuffolkFirst Bank’s deposit premiums increased from 5.61 basis points to 6.09 basis points effective March 31, 2009.

Like all insured banks, Xenith Bank may be required to pay higher premiums to the FDIC than those published for 2009 because market developments have impacted the deposit insurance fund of the FDIC and reduced the ratio of reserves to insured deposits. On February 26, 2009, the FDIC adopted interim rules, with request for comment, to (a) impose a one-time 20 basis point emergency special assessment effective on June 30, 2009, to be collected on September 30, 2009, and (b) to have the option to impose a further special assessment of up to 10 basis points on an insured bank’s assessment base on the last day of any calendar quarter after June 30, 2009, to be collected at the same time the risk-based assessments are collected. The final rule reduced the emergency special assessment to five basis points and on each insured depository institution’s assets, less its Tier 1 capital, as of June 30, 2009. The special assessment will be capped at 10 basis points of an institution’s domestic deposits. The FDIC has indicated that an additional special assessment will be necessary in the fourth quarter, but the FDIC has not indicated the amount of such assessment. Each basis point of any special assessment would result in approximately $1,560 of additional FDIC deposit insurance premium expense per quarter, on a pre-tax basis.

First Bankshares faces, and Xenith Bankshares will face, intense competition in its target markets.

The financial services industry, including commercial banking, mortgage banking, consumer lending and home equity lending, is highly competitive, and First Bankshares has encountered, and Xenith Bankshares will continue to encounter, strong competition for deposits, loans and other financial services in their target markets in each of their lines of business. Xenith Bank’s principal competitors will be other commercial banks in its target markets. However, additional competition is and will continue to be provided by savings banks, savings and loan associations, mutual funds, money market funds, finance companies, trust companies, insurers, leasing companies, credit unions and mortgage companies with respect to some of SuffolkFirst Bank’s and Xenith Bank’s products and services. Many of SuffolkFirst Bank’s and Xenith Bank’s non-bank competitors are not subject to the same degree of regulation as SuffolkFirst Bank and Xenith Bank are and have advantages over them in providing certain services. Many of SuffolkFirst Bank’s and Xenith Bank’s competitors are significantly larger than SuffolkFirst Bank and Xenith Bank and have greater access to capital and other resources, higher lending limits and larger branch

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networks. After the completion of the merger, Xenith Bank intends to open branches in Richmond, Virginia and Tysons Corner in Northern Virginia. SuffolkFirst Bank does not have branches in Richmond or Tysons Corner and, as such, Xenith Bank will not be able to build from a pre-existing customer base in either of these markets. To expand into Richmond and Tysons Corner, Xenith Bank will have to compete successfully against banks with established businesses, relationships and reputations in those markets. There is no assurance that Xenith Bank will be able to do so. These competitive factors may have a material adverse effect on the profitability of SuffolkFirst Bank’s and Xenith Bank’s lending and deposit operations.

Xenith Bank may become subject to significant liabilities in the event it forecloses on or takes title to real property.

When underwriting a commercial real estate loan, Xenith Bank will generally take a lien on the commercial real estate and, in some instances upon a default by the borrower, Xenith Bank may foreclose on and take title to the property, which may lead to potential financial risk for us under applicable environmental laws. Many environmental laws can impose liability regardless of whether Xenith Bank knew of, or was responsible for, any contamination of property upon which it may foreclose.

An economic downturn or recession, especially one affecting the target markets of Xenith Bank, may have an adverse effect on its financial performance.

General economic conditions impact the banking industry. Delinquencies and credit losses in the financial services industry generally increase during economic downturns or recessions. Likewise, loan demand may decline during an economic downturn or recession. Accordingly, an economic downturn or recession, either local or national, could adversely affect the financial performance of Xenith Bank as customers default on their loans with Xenith Bank or carry lower balances. Unlike many of its larger competitors, the majority of SuffolkFirst Bank’s borrowers and depositors are, and those of Xenith Bank are expected to continue to be, middle-market businesses and individuals located or doing business in the target markets of SuffolkFirst Bank and Xenith Bank. As a result, the operations and profitability of SuffolkFirst Bank and Xenith Bank may be more adversely affected by a local economic downturn or recession than those of larger, more geographically diverse competitors. Factors that adversely affect the economy in the target markets of Xenith Bank could reduce its deposit base and demand for products and services, which may decrease earnings. An adverse change in the local economy could make it more difficult for borrowers to repay their loans, which could lead to loan losses for Xenith Bank.

Xenith Bank will depend on the accuracy and completeness of information about customers and counterparties.

In deciding whether to extend credit or enter into other transactions, Xenith Bank may rely on information furnished by or on behalf of its customers and counterparties, including financial statements, credit reports and other financial information. Xenith Bank may also rely on representations of those customers, counterparties or other third parties, such as independent auditors, as to the accuracy and completeness of that information. Reliance on inaccurate or misleading financial statements, credit reports or other financial information could have a material adverse impact on business and, in turn, results of operation and financial condition.

Consumers and businesses may decide not to use banks to complete their financial transactions.

Technology and other changes are allowing parties to complete financial transactions that historically have involved banks through alternative methods. The possibility of eliminating banks as intermediaries could result in the loss of interest and fee income, as well as the loss of customer deposits and the related income generated from those deposits. The loss of these revenue streams and the lower cost deposits as a source of funds could have a material adverse effect on the results of operations and financial condition of Xenith Bank.

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After the merger, Xenith Bankshares will be dependent on its key personnel, including its executive officers and directors, and the loss of such persons may adversely affect its operations and financial performance.

Following the merger, Xenith Bankshares will be for the foreseeable future dependent on the services of Mr. Layfield, who will be Xenith Bankshares’ President and Chief Executive Officer; Mr. Osgood, who will be Xenith Bankshares’ Chief Financial Officer and Chief Administrative Officer; and Messrs. Cottrell, Davis and O’Flaherty. Xenith Bankshares will also be dependent on the services of Darrell Swanigan and Keith Hawkins who are intimately familiar with the current operations of First Bankshares and SuffolkFirst Bank. Should the services of these individuals or other key executives become unavailable, there can be no assurance that a suitable successor could be found who would be willing to be employed upon the terms and conditions that Xenith Bankshares would offer. A failure to replace any of these individuals promptly could have an adverse effect on Xenith Bankshares’ results of operations and financial performance. Additionally, the community involvement, diverse backgrounds, and extensive local business relationships of the individuals expected to serve as directors of Xenith Bankshares will be important to the success of Xenith Bankshares. If the expected composition of the Xenith Bankshares board of directors were to change materially, Xenith Bankshares’ banking business may suffer.

System failure or breaches of our network security could lead to increased operating costs as well as litigation and other liabilities.

The computer systems and network infrastructure that First Bankshares uses and Xenith Bankshares will use could be vulnerable to unforeseen problems. The operations of First Bankshares are, and the operations of Xenith Bankshares will be, dependent in part upon our ability to protect our computer equipment against damage from fire, power loss, telecommunications failure or a similar catastrophic event. Any damage or failure that causes an interruption in operations could have an adverse effect on customers. In addition, we must be able to protect the computer systems and network infrastructure utilized by us against physical damage, security breaches and service disruption caused by the Internet or other users. Such computer break-ins and other disruptions would jeopardize the security of information stored in and transmitted through our computer systems and network infrastructure, which may result in significant liability to us and deter potential customers.

First Bankshares is, and Xenith Bankshares will be, subject to extensive regulation in the conduct of their business operations, which could adversely affect their financial results.

The banking industry is heavily regulated. Banking regulations are primarily intended to protect the federal deposit insurance funds and depositors, not shareholders. These regulations affect lending practices, capital structure, investment practices, dividend policy and growth, among other things. For example, federal and state consumer protection laws and regulations will limit the manner in which SuffolkFirst Bank and Xenith Bank may offer and extend credit. From time to time, the United States Congress and state legislatures consider changing these laws and may enact new laws or amend existing laws to further regulate the financial services industry. Changes to statutes, regulations or regulatory policies, including changes in interpretation or implementation of statutes, regulations or policies, could affect us in substantial and unpredictable ways. Such changes could subject First Bankshares and Xenith Bankshares to additional costs, limit the types of financial services and products they may offer and/or increase the ability of non-banks to offer competing financial services and products, among other things. Failure to comply with laws, regulations or policies could result in sanctions by regulatory agencies, civil money penalties and/or reputation damage, which could have a material adverse effect on the business, financial condition and results of operations of First Bankshares and Xenith Bankshares. In addition, the laws governing bankruptcy generally favor debtors, making it more expensive or more difficult to collect from customers who have declared bankruptcy.

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Risks Related to the Status of BankCap Partners Fund as a Bank Holding Company

BankCap Partners Fund is a bank holding company and, following the merger, will be deemed to be a multi-bank holding company for two institutions.

We estimate that BankCap Partners Fund will beneficially own approximately 55.71% of Xenith Bankshares common stock following the completion of the merger. BankCap Partners Fund is currently a registered bank holding company under the Bank Holding Company Act with respect to Atlantic Capital Bank, an Atlanta, Georgia-based bank, and is regulated by the Federal Reserve Board.

Under the Federal Reserve Board guidelines, every bank holding company must serve as a “source of strength” for each of their bank subsidiaries. In addition, the Federal Deposit Insurance Corporation Act of 1991 requires that an insured depository institution shall be liable for the loss incurred or anticipated by the FDIC arising from the default of a commonly controlled insured depository institution or any assistance provided by the FDIC to any commonly controlled insured depository institution in danger of default. Currently, BankCap Partners Fund is deemed a bank holding company for Atlantic Capital Bank and will also be deemed to be a bank holding company for Xenith Bank after the merger. The position of BankCap Partners Fund as a source of strength to other depository institutions may limit its ability to serve as a source of strength for Xenith Bank and could adversely affect Xenith Bank’s ability to access resources of BankCap Partners Fund. Federal bank regulatory agencies have additional discretion to require a bank holding company to divest itself of any bank or non-bank subsidiary if the agency determines that divestiture may aid the depository institution’s financial condition.

Xenith Bank may be obligated to provide financial assistance to any other financial institution as to which BankCap Partners Fund is deemed to be a bank holding company.

A bank for which BankCap Partners Fund is deemed to be a bank holding company may be required to indemnify, or cross-guarantee, the FDIC against losses the FDIC incurs with respect to any other bank controlled by BankCap Partners Fund. Accordingly, Xenith Bank may be obligated to provide financial assistance to Atlantic Capital Bank or any other financial institution regarding which BankCap Partners Fund is deemed to be a bank holding company. Any financial assistance that Xenith Bank has to provide could reduce our capital and result in a reduction in the value of your shares of common stock that you receive in the merger, and could result in a complete loss of your investment.

Risks Related to Xenith Bankshares Common Stock

The market price of the shares of Xenith Bankshares common stock that are received in the merger may fluctuate significantly.

Upon completion of the merger, each share of Xenith Corporation common stock will be converted into the right to receive shares of Xenith Bankshares common stock pursuant to the terms of the merger agreement. In addition, existing shareholders of First Bankshares will be able to elect to retain some or all of their shares of First Bankshares common stock, which shares will become shares of Xenith Bankshares common stock upon closing of the merger, or receive cash in exchange for their shares of First Bankshares common stock (subject to the limitation described under “PROPOSAL I – APPROVAL OF THE MERGER AND RELATED MATTERS—Proration”). The market price of the shares of common stock that shareholders receive or retain in the merger could fluctuate significantly prior to or following the completion of the merger for various reasons, including the following:

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The shares of Xenith Bankshares common stock that shareholders of Xenith Corporation receive in the merger will not be registered under the Securities Act.

The shares of Xenith Bankshares common stock that shareholders of Xenith Corporation will receive in the merger in exchange for their shares of Xenith Corporation common stock will not have been registered under the Securities Act or any state securities laws. As a result, such shares cannot be resold or transferred except through registration under, or exemptions from the registration requirements of, the Securities Act and applicable state laws.

Future sales of shares of Xenith Bankshares common stock following the completion of the merger may depress the price of Xenith Bankshares’ common stock.

Shareholders of Xenith Corporation common stock have been granted certain demand registration rights to have the shares of Xenith Bankshares common stock that they receive in the merger registered for resale under the Securities Act. See “PROPOSAL I – APPROVAL OF THE MERGER AND RELATED MATTERS—Xenith Corporation Investor Rights Agreement—Registration Rights” for more information. Upon registration, these shares of common stock will be eligible for sale without restriction. Any sales of a substantial number of such shares, or the perception that these sales may occur, may cause the market price of Xenith Bankshares common stock to decline.

An investment in First Bankshares or Xenith Bankshares common stock is not an insured deposit.

Neither the outstanding First Bankshares common stock nor the Xenith Bankshares common stock to be issued in the merger is a bank deposit and, therefore, neither is insured against loss by the FDIC or by any other public or private entity. Investment in the common stock of First Bankshares and Xenith Bankshares is inherently risky for the reasons described in this “RISK FACTORS” section and elsewhere in this joint proxy statement and is subject to the same market forces that affect the price of common stock in any company. As a result, if you acquire or retain common stock of First Bankshares or Xenith Bankshares, you may lose some or all of your investment.

Following the completion of the merger, BankCap Partners Fund will own a significant amount of Xenith Bankshares outstanding common stock, which will enable it to influence the vote on all matters submitted to a vote of Xenith Bankshares’ shareholders.

As of date of this joint proxy statement, BankCap Partners Fund beneficially owns 3.5 million shares of Xenith Corporation common stock. In addition, BankCap Partners Fund holds immediately exercisable warrants to purchase 450,000 shares of Xenith Corporation common stock at an exercise price of $10.00 per share. In the merger, the Xenith Corporation common stock will be converted into Xenith Bankshares common stock and the warrants to purchase Xenith Corporation common stock will be converted into warrants to purchase shares of Xenith Bankshares common stock at the exchange ratio discussed under “PROPOSAL I – APPROVAL OF THE MERGER AND RELATED MATTERS—Merger Consideration.” As a result, following the merger, BankCap Partners Fund will beneficially own approximately 55.71% of the outstanding common stock of Xenith Bankshares, including immediately exercisable warrants to purchase approximately 408,060 additional shares of Xenith Bankshares common stock at an exercise price of $11.03 per share, based on the assumptions regarding the exchange ratio described under “PROPOSAL I –APPROVAL OF THE MERGER AND RELATED MATTERS—Merger Consideration.”

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In addition, each existing shareholder of Xenith Corporation is a party to an Investor Rights Agreement, pursuant to which he or she has agreed to vote his or her shares of Xenith Corporation (prior to the merger) and of Xenith Bankshares (following the merger) in favor of (1) one designee of BankCap Partners Fund for election to the Xenith Bankshares board of directors for so long as BankCap Partners Fund or any of its affiliates is a registered bank holding company under the Bank Holding Company Act with respect to Xenith Bankshares and (2) one additional designee of BankCap Partners Fund for election to Xenith Bankshares board of directors for so long as BankCap Partners Fund and its affiliates own 25% or more of the outstanding common stock of Xenith Bankshares.

Accordingly, BankCap Partners Fund, through its beneficial ownership of Xenith Bankshares common stock and other rights, will be able to influence the vote on all matters submitted to a vote of Xenith Bankshares shareholders, including the election of directors, amendments to the articles of incorporation or bylaws, mergers or other business combination transactions and certain sales of assets outside the usual and regular course of business. The interests of BankCap Partners Fund may not coincide with the interests of other Xenith Bankshares shareholders, and they could take actions that advance their own interests to the detriment of other shareholders.

Exercise of warrants and options could cause dilution of your ownership in Xenith Bankshares.

BankCap Partners Fund and the directors and executive officers of Xenith Corporation hold warrants and options to purchase 838,000 shares of Xenith Corporation common stock as of the date of this joint proxy statement. In addition, as of the date of this joint proxy statement, the directors and executive officers of First Bankshares hold options to purchase 86,350 shares of First Bankshares common stock. In the merger, all of these warrants and options to purchase shares of Xenith Corporation common stock will be converted into warrants and options to purchase shares of Xenith Bankshares common stock at the exchange ratio discussed under “PROPOSAL I – APPROVAL OF THE MERGER AND RELATED MATTERS—Merger Consideration.” In addition, all of these options to purchase shares of First Bankshares common stock will remain exercisable for the same number of shares of Xenith Bankshares common stock for which they are currently exercisable. Exercise of some or all of these warrants and options, either before or after the merger, would cause dilution of your ownership interest in Xenith Bankshares and could cause the value of a share of Xenith Bankshares common stock to decline.

If Xenith Bankshares issues additional shares of common stock or other equity securities after the merger, your beneficial ownership percentage will be diluted.

Following the completion of the merger, if first Bankshares shareholders approve Proposals III and IV, Xenith Bankshares will be authorized to issue up to 100.0 million shares of common stock, less the number of shares outstanding at that time, and up to 25.0 million shares of preferred stock. Any shares of preferred stock that Xenith Bankshares issues may be senior to its common stock for purposes of dividends and liquidation preference. The Xenith Bankshares board of directors without the approval of shareholders, could from time to time decide to issue additional shares of common stock or shares of preferred stock, which may dilute your holdings. Any sale of additional shares of Xenith Bankshares common stock may be at prices lower than the market value of the shares you receive in the merger or on terms better than those of the shares you receive in the merger.

First Bankshares has not paid a dividend since its inception and, following the completion of the merger, Xenith Bankshares does not intend to pay dividends in the foreseeable future. There can be no assurance that Xenith Bankshares will ever have sufficient earnings to legally be able to pay dividends.

First Bankshares has not paid any dividends since its inception. Following the completion of the merger, Xenith Bankshares does not intend to pay any dividends in the foreseeable future. State and federal laws and regulations limit the amount of dividends that we may pay. Further, even if we have earnings in an amount sufficient to pay dividends, the board of directors of Xenith Bankshares may decide to retain earnings for the purposes of financing growth. No assurance can be given that Xenith Bankshares’ earnings, if any, will ever permit the payment of dividends to its shareholders. You should not rely on an investment in Xenith Bankshares if you require dividend income from your investment in Xenith Bankshares.

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Certain provisions of Virginia law and Xenith Bankshares’ amended and restated articles of incorporation and amended and restated bylaws, as in effect after the completion of the merger, could make it more difficult for Xenith Bankshares shareholders to remove Xenith Bankshares’ board of directors and management and also could have the effect of discouraging a change of control transaction.

Certain provisions of Virginia law, the state in which First Bankshares is, and Xenith Bankshares will be, incorporated, and Xenith Bankshares’ amended and restated articles of incorporation and amended and restated bylaws could make it more difficult for Xenith Bankshares shareholders to remove its board of directors or management and also could have the effect of discouraging a change of control transaction. These provisions include:

For more information, please see “DESCRIPTION OF XENITH BANKSHARES CAPITAL STOCK” in this joint proxy statement.

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CAUTIONARY NOTICE ABOUT FORWARD-LOOKING STATEMENTS

We make forward-looking statements in this joint proxy statement that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of operations or performance plans and objectives for future operations, projections of revenues and other financial items that are based on our beliefs as well as assumptions made by and information currently available to us. Also, when we use the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “may,” “will,” “should,” “would,” “could,” “project,” “predict,” or similar expressions, we are making forward-looking statements. Many possible events or factors could affect our future financial results and performance. This could cause our results or performance to differ materially from those expressed in our forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by our forward-looking statements include the following:

We have based our forward-looking statements on our current expectations about future events. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee you that these expectations actually will be achieved. We are under no duty to update any of the forward-looking statements after the date of this joint proxy statement to conform those statements to actual results. In evaluating these statements, you should consider various factors, including the risks outlined in the section entitled “RISK FACTORS,” beginning on page 17.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information and explanatory notes present the combined financial statements of Xenith Corporation and First Bankshares after giving effect to Xenith Corporation’s private offering of 4,758,100 shares of its common stock at a price of $10.00 per share, which was completed on June 26, 2009, and the merger, assuming that the private offering and merger were completed as of June 30, 2009 for balance sheet purposes, and as of January 1, 2008 for income statement purposes, in accordance with U.S. generally accepted accounting principles, referred to herein as GAAP.

The unaudited pro forma condensed combined financial information shows the impact of the merger on the combined balance sheets and statements of income under the acquisition method of accounting. Although the merger is structured as a merger of Xenith Corporation with and into First Bankshares, with First Bankshares being the surviving entity for legal purposes, Xenith Corporation is treated as the acquirer for accounting purposes. Under this method of accounting, the assets and liabilities of First Bankshares are recorded by Xenith Corporation at their estimated fair values as of the date the merger is completed. The unaudited pro forma condensed combined balance sheet as of June 30, 2009 assumes the merger was completed on that date. The unaudited pro forma income statements for the six months ended June 30, 2009 and for the year ended December 31, 2008 were prepared assuming the merger was completed on January 1, 2008.

First Bankshares and Xenith Corporation anticipate that the merger will provide financial benefits to the combined company, such as possible revenue enhancements and expense efficiencies, among other items, although no assurances can be given that such benefits will actually be achieved. These benefits have not been reflected in the unaudited pro forma condensed combined financial information. As required, the unaudited pro forma condensed combined financial information includes adjustments that reflect events that are directly attributable to the transaction. The unaudited pro forma condensed combined financial information is presented for illustrative purposes only and is not indicative of the financial results of the combined companies had the private offering and merger been completed on the dates indicated, nor is it indicative of future financial results of the combined company.

In addition, as explained in more detail in the accompanying notes to the unaudited pro forma condensed combined financial information, the allocation of the purchase price reflected in the unaudited pro forma condensed combined financial information is subject to adjustment. The preliminary purchase price allocation for the merger may differ materially from the actual purchase price allocation that will be recorded upon the completion of the merger based upon changes in the estimated fair value of the assets and liabilities acquired from First Bankshares. Subsequent to the completion date of the merger, there may also be further refinements of the purchase price allocation as additional information becomes available.

The unaudited pro forma condensed combined financial information is derived from and should be read in conjunction with the historical financial statements and related notes of Xenith Corporation and First Bankshares, which are included on pages F-2 through F-50 of this joint proxy statement.

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The following unaudited pro forma condensed combined balance sheet as of June 30, 2009, combines the June 30, 2009 historical balance sheets of Xenith Corporation and First Bankshares assuming that the private offering and the merger were completed as of June 30, 2009, on an acquisition accounting basis.

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The following unaudited pro forma condensed combined income statement for the six months ended June 30, 2009, combines the historical income statements of Xenith Corporation and First Bankshares assuming that the private offering and the merger were completed as of January 1, 2008, on an acquisition accounting basis.