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Xenith Bankshares, Inc. Reports Year-Over-Year Balance Sheet and Profitability Growth in First Quarter 2013

Xenith Bankshares, Inc. Reports Year-Over-Year Balance Sheet and Profitability
Growth in First Quarter 2013

RICHMOND, Va., May 1, 2013 (GLOBE NEWSWIRE) -- Xenith Bankshares, Inc.
(Nasdaq:XBKS), parent company of Xenith Bank, a business-focused bank serving
the Greater Washington, D.C., Richmond and Greater Hampton Roads, Virginia
markets, today announced financial results for the quarter ended March 31,
2013. Net income was $418,000, or $0.04 per common share, in first quarter
2013, compared to $312,000, or $0.03 per common share, in first quarter 2012.
Pre-tax net income more than doubled to $663,000 in first quarter 2013
compared to $312,000 in first quarter 2012. The company reported no income tax
expense in first quarter 2012.

First Quarter 2013 Highlights

  *Book value per common share at March 31, 2013 increased nearly 10% to
    $7.57 compared to $6.91 at March 31, 2012, while tangible book value per
    common share^1 rose to $6.05 compared to $5.35 at March 31, 2012.
  *Shareholders' equity was $87.77 million at March 31, 2013, up 9%, compared
    to $80.59 million at March 31, 2012.
  *Total assets increased 17% to $579.85 million at March 31, 2013, from
    $495.19 million at March 31, 2012.
  *Net loans, including loans held for sale, were $440.96 million at March
    31, 2013, up 25%, compared to $354.08 million at the end of prior year's
    first quarter.
  *Total deposits grew to $468.80 million at March 31, 2013 compared to
    $392.26 million at the end of the prior year's first quarter, providing
    additional low-cost core funding for the company's lending activities.
    Noninterest-bearing demand deposits increased to $75.88 million at March
    31, 2013 compared to $53.30 million at March 31, 2012. Demand and money
    market account balances grew 31% between March 31, 2012 and March 31,
    2013.
  *Net interest income after provision for loan and lease losses was $4.84
    million for first quarter 2013 compared to $4.71 million for first quarter
    2012, the increase primarily reflecting interest income generated from
    loan growth and a stable loan loss provision.
  *Asset quality improved with net charge-offs as a percentage of average
    loans held for investment of 0.04% for first quarter 2013, compared to
    0.13% for first quarter 2012.
  *The ratio of nonperforming assets to total assets was 0.89% at March 31,
    2013 compared to 1.26% at March 31, 2012 and 0.95% at year-end 2012.
  *Capital ratios remained above regulatory standards for "well-capitalized"
    banks, with a Tier 1 leverage ratio of 12.2%, a Tier 1 risk-based capital
    ratio of 14.6%, and a total-risk based capital ratio of 15.8% at March 31,
    2013.

T. Gaylon Layfield, III, President and Chief Executive Officer, commented:
"Xenith demonstrated in the first quarter its ability to continue building
shareholder value, as reflected by the company's growth in book value,
earnings, loans, and deposits. While the rate of our organic loan growth was
less than we would have liked in the first quarter, we believe that we
continued making progress building an asset-sensitive balance sheet that we
expect will perform well as interest rates rise in the future. Further, we
have seen growth in noninterest bearing deposits, which are adding value to
the Xenith franchise."

Layfield continued: "During the past year, we have added to our underwriting,
risk and credit management capabilities to position the bank to effectively
manage substantial organic growth and growth through the acquisition and
integration of other institutions. We expanded our electronic treasury
management services to enhance our capabilities and broaden customer
relationships. We also have an ongoing initiative to enhance our enterprise
risk management infrastructure and governance oversight, which we believe
already compare favorably to similarly sized financial institutions."

"We have shown our ability to integrate acquisitions and satisfactorily
resolve problem loans and move forward expeditiously," he explained. Layfield
noted that the company continues its efforts to improve asset quality, almost
exclusively related to acquired loans.

"We have particularly promising opportunities to grow our business in the
Greater Washington D.C. region, and we believe our prior success in
integrating acquired institutions provides management confidence in its
ability to execute additional prudent acquisitions in the future. Acquisitive
growth throughout the company's target markets remains an important part of
our long-term strategy, and we believe that we have the management and
infrastructure to support expansion. We continue to look for the right
opportunities that will represent a win for all concerned, particularly our
shareholders."

Operating Results

Interest income for the three months ended March 31, 2013 was $6.19 million
compared to $6.12 million for the three months ended March 31, 2012. This
growth reflected total average interest-earning assets of $548.78 million in
the 2013 period, a 19% increase, compared to $461.09 million in first quarter
2012, partially offset by lower asset yields driven by the continuing low
interest rate environment. Average interest-earning assets as a percentage of
total assets were 95.1% and 95.4%, respectively, in the first quarters of 2013
and 2012.

A decline in total interest expense to $939,000 in first quarter 2013 compared
to $1.06 million in first quarter 2012 was primarily the result of the
company's re-pricing of interest-bearing deposit accounts and addition of
noninterest-bearing direct deposit accounts.

Net interest margin in first quarter 2013 was 3.83% compared to 4.39% in first
quarter 2012, primarily reflecting ongoing margin pressure caused by the
continued low interest rate environment and the impact of lower accretion from
discounts on acquired loans. The company's cost of funds fell to 91 basis
points in first quarter 2013 compared to 1.21% in the first quarter of 2012.

Noninterest income increased 86% to $660,000 in first quarter 2013 compared to
$355,000 in first quarter 2012. The company's noninterest income in first
quarter 2013 included a one-time $346,000 gain on the sale of collateral
related to an acquired impaired loan.

Noninterest expenses in first quarter 2013 increased 2% to $4.84 million
compared to $4.75 million in first quarter 2012, primarily reflecting
increased compensation and benefits related to hiring relationship managers
and support personnel to drive and support continued growth. "We have
carefully managed and controlled overall operating expenses, though we feel it
is imperative to attract and retain the best bankers as this is at the core of
building the Xenith franchise," Layfield noted. "Our strong team of very
experienced bankers is well-prepared to manage a growing and significantly
larger financial institution. For example, our investment in building the
company's enterprise risk management function will enhance our productivity
and ability to expand at higher growth rates in a prudent manner."

Balance Sheet and Asset Quality

The company grew total assets to $579.85 million at March 31, 2013, an
increase from $495.19 million at March 31, 2012 and $563.21 million at
December 31, 2012. Total deposits were $468.80 million at March 31, 2013
compared to $392.26 million at March 31, 2012 and $453.23 million at December
31, 2012. The increase in deposits was primarily in demand and money market
accounts reflecting the company's strategy of growing core deposits.

Demand and money market deposits increased to $325.06 million compared to
$247.91 million at March 31, 2012 and $317.53 million at December 31, 2012,
and time deposits rose to $139.21 million compared to $131.64 million at
December 31, 2012. "Our ability to add lower cost deposits remains a key
component of our strategy to build Xenith's core deposit base while managing
exposure to wholesale funding sources," Layfield noted.

Loans held for investment after allowance for loan losses at March 31, 2013
were $372.05 million compared to $324.98 million at March 31, 2012 and $379.01
million at December 31, 2012. Loans held for sale, which are the company's
mortgage warehouse loans, were $68.91 million at March 31, 2013 compared to
$80.87 million at December 31, 2012, reflecting a seasonal decline in mortgage
lending activity and a cyclical decline in refinancing activity, but an
increase from $29.10 million at March 31, 2012, when the company began
participating in the program.

"We seek to maintain balance and diversity in our loan portfolio, so we remain
selective with regard to loan originations and portfolio mix," explained
Layfield. "We want to balance commercial real estate and consumer lending with
C&I lending, and as a result, more than 50% of our portfolio consisted of C&I
loans at March 31, 2013. Along with portfolio diversification, we have also
worked to manage our interest rate risk by developing an asset-sensitive
balance sheet as the majority of our loan portfolio consists of variable-rate
credits."

Balance sheet quality reflects continued improvement. The ratio of
nonperforming assets to total assets was 0.89% at March 31, 2013 compared to
1.26% at the end of the prior year's first quarter and 0.95% at December 31,
2012. The company's allowance for loan and lease losses to non-accrual loans
was 104% at the end of the first quarter of 2013 compared to 72% at the end of
the same period in 2012.

Layfield concluded: "We are competing effectively for loans, deposits, and
business banking services in our target markets. Economic conditions continue
to be soft in Richmond and Greater Hampton Roads, although these remain stable
and attractive long-term markets. The Greater Washington D.C. market remains
strong and presents us with excellent opportunities. Our market share is
small, but our team is quite experienced, particularly in the government
contractor lending business. We see upside in that target market given some of
the consolidation that continues to occur."

Profile

Xenith Bankshares, Inc. is the holding company for Xenith Bank. Xenith Bank is
a full-service, locally-managed commercial bank, specifically targeting the
banking needs of middle market and small businesses, local real estate
developers and investors, private banking clients, and select retail banking
clients. As of March 31, 2013, the Company had total assets of $579.9 million
and total deposits of $468.8 million. Xenith Bank's target markets are Greater
Washington, DC, Richmond, VA, and Greater Hampton Roads, VA metropolitan
statistical areas. The Company is headquartered in Richmond, Virginia and
currently has six branch locations in Tysons Corner, Richmond and Suffolk,
Virginia. Xenith Bankshares common stock trades on the NASDAQ Capital Market
under the symbol "XBKS."

For more information about Xenith Bankshares and Xenith Bank, visit our
website: https://www.xenithbank.com/

All statements other than statements of historical facts contained in this
press release are forward-looking statements. Forward-looking statements made
in this press release reflect beliefs, assumptions and expectations of future
events or results, taking into account the information currently available to
Xenith Bankshares, Inc. These beliefs, assumptions and expectations may change
as a result of many possible events, circumstances or factors, not all of
which are currently known to Xenith Bankshares. If a change occurs, Xenith
Bankshares' business, financial condition, liquidity, results of operations
and prospects may vary materially from those expressed in, or implied by, the
forward-looking statements. Accordingly, you should not place undue reliance
on these forward-looking statements. Factors that may cause actual results to
differ materially from those contemplated by these forward-looking statements
include the risks discussed in Xenith Bankshares' public filings with the
Securities and Exchange Commission, including those outlined in Part I, Item
1A, "Risk Factors" of Xenith Bankshares' Annual Report on Form 10-K for the
year ended December 31, 2012. Except as required by applicable law or
regulations, Xenith Bankshares does not undertake, and specifically disclaims
any obligation, to update or revise any forward-looking statement.

^1 Please see the discussion of non-GAAP financial measures at the end of the
financial tables.

                      -Selected Financial Tables Follow-


XENITH BANKSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2013 AND DECEMBER 31, 2012

                                             (Unaudited)  
(in thousands, except share data)             March 31, 2013 December 31, 2012
Assets
Cash and cash equivalents                                   
Cash and due from banks                       $44,721      $9,457
Federal funds sold                            7,548         2,906
Total cash and cash equivalents               52,269        12,363
Securities available for sale, at fair value  53,278        57,551
Loans held for sale                           68,905        80,867
Loans held for investment, net of allowance
for loan and lease losses, 2013 -- $5,099;    372,052       379,006
2012 -- $4,875
Premises and equipment, net                   5,436         5,397
Other real estate owned                       276           276
Goodwill and other intangible assets, net     15,898        15,989
Accrued interest receivable                   1,514         1,606
Deferred tax asset                            4,021         4,094
Other assets                                  6,204         6,057
Total assets                                  $579,853     $563,206
Liabilities and Shareholders' Equity
Deposits                                                    
Demand and money market                       $325,060     $317,526
Savings                                       4,528         4,069
Time                                          139,210       131,636
Total deposits                                468,798       453,231
Accrued interest payable                      224           232
Borrowings                                    20,000        20,000
Other liabilities                             3,059         2,196
Total liabilities                            492,081       475,659
Shareholders' equity                                        
Preferred stock, $1.00 par value, $1,000
liquidation value, 25,000,000 shares
authorizedas of March 31, 2013 and December  8,381         8,381
31, 2012; 8,381 shares issued and outstanding
as of March 31, 2013 and December 31, 2012
Common stock, $1.00 par value, 100,000,000
shares authorized as of March 31, 2013 and
December 31, 2012; 10,488,060 shares issued   10,488        10,488
and outstanding as of March 31, 2013 and
December 31, 2012
Additional paid-in capital                    71,578        71,414
Accumulated deficit                           (3,263)       (3,660)
Accumulated other comprehensive income, net   588           924
of tax
Total shareholders' equity                    87,772        87,547
Total liabilities and shareholders' equity    $579,853     $563,206



XENITH BANKSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012

                                                              
(in thousands, except per share data)            March 31, 2013 March 31, 2012
Interest income                                                
Interest and fees on loans                       $5,860       $5,616
Interest on securities                           250           436
Interest on federal funds sold and deposits in   78            71
other banks
Total interest income                            6,188         6,123
Interest expense                                               
Interest on deposits                             584           680
Interest on time certificates of $100,000 and    263           285
over
Interest on federal funds purchased and borrowed 92            92
funds
Total interest expense                           939           1,057
Net interest income                              5,249         5,066
Provision for loan and lease losses              411           360
Net interest income after provision for loan and 4,838         4,706
lease losses
Noninterest income                                             
Service charges on deposit accounts              94            59
Net gain (loss) on sale and write-down of other  346           (9)
real estate owned and other collateral
Gains on sales of securities                     159           219
Other                                            61            86
Total noninterest income                         660           355
Noninterest expense                                            
Compensation and benefits                        2,958         2,831
Occupancy                                        364           389
FDIC insurance                                   99            90
Bank franchise taxes                             197           150
Technology                                       387           416
Communications                                   61            72
Insurance                                        74            75
Professional fees                                253           247
Other real estate owned                          2             2
Amortization of intangible assets                91            91
Other                                            349           386
Total noninterest expense                        4,835         4,749
Income before income tax                        663           312
Income tax expense                               245           --
Net income                                       418           312
Preferred stock dividend                         (21)          (21)
Net income available to common shareholders      $397         $291
Earnings per common share (basic and diluted):   $0.04        $0.03

                                                                         
                                                                         
CONSOLIDATED FINANCIAL                                                    
HIGHLIGHTS (Unaudited)
($ in thousands, except per                                               
share data)
                                                                         
PERFORMANCE RATIOS             Quarter Ended                                   Year
                                                                               Ended
                              March 31,  December September June 30, March    
                                          31,      30,                31,
                              2013       2012     2012      2012     2012     2012
Net interest margin (1)       3.83%      4.18%    4.54%     4.75%    4.39%    4.47%
Return on average assets (2)   0.29%      0.24%    4.38%     0.67%    0.26%    1.42%
Return on average common       2.10%      1.68%    31.86%    4.56%    1.73%    9.89%
equity (3)
Efficiency ratio (4)           82%        80%      75%       76%      88%      80%
Net income                     $418     332     5,903    832     312     7,379
Earnings per common share      $0.04    0.03    0.56     0.08    0.03    0.70
(basic and diluted)
                                                                         
(1) Net interest margin is the percentage of net interest income divided by average
interest-earning assets.
(2) Return on average assets is net income for the respective period (annualized for
quarter periods) divided by average assets for the respective period.
(3) Return on average equity is net income for the respective period (annualized for
quarter periods) divided by average equity for the respective period.
(4) Efficiency ratio is non-interest expenses divided by the sum of net interest income
and non-interest income.
                                                                         
ASSET QUALITY RATIOS           Quarter Ended                                   
                              March 31,  December September June 30, March    
                                          31,      30,                31,
                              2013       2012     2012      2012     2012     
Net charge-offs as a
percentage of average loans    0.04%      0.35%    0.28%     0.23%    0.13%    
held for investment
Allowance for loan and lease
losses (ALLL) as a percentage  1.35%      1.27%    1.37%     1.32%    1.26%    
of total loans held for
investment (1)
ALLL plus remaining discounts
(fair value adjustments) on
acquired loans as a percentage 3.31%      3.32%    3.91%     4.48%    4.67%    
of total loans held for
investment (2)
ALLL to nonaccrual loans (1)   104.35%    96.16%   95.94%    77.15%   71.98%   
Nonperforming assets as a
percentage of total loans held 1.37%      1.39%    1.52%     1.86%    1.89%    
for investment
Nonperforming assets as a      0.89%      0.95%    0.93%     1.16%    1.26%    
percentage of total assets
                                                                         
(1) ALLL excludes discounts (fair value adjustments) on acquired loans.
(2) Ratio is a non-GAAP financial measure calculated as the sum of ALLL and discounts
(fair value adjustments) on acquired loansheld for investment divided by the sum of
total loans held for investment and discounts on loans.See discussion of non-GAAP
financial measures below.
                                                                         
CAPITAL RATIOS                 Quarter Ended                                   
                              March 31,  December September June 30, March    
                                          31,      30,                31,
                              2013       2012     2012      2012     2012     
Tier 1 leverage ratio          12.23%     12.90%   13.02%    13.35%   13.53%   
Tier 1 risk-based capital      14.60%     15.39%   17.01%    16.24%   16.70%   
ratio
Total risk-based capital ratio 15.75%     16.52%   18.24%    17.41%   17.80%   
Book value per common share    $7.57    7.55    7.54     7.01    6.91    
(1)
Tangible book value per common $6.05    6.02    6.00     5.46    5.35    
share (2)
                                                                         
(1) Book value per common share is total shareholders' equity less preferred stock
divided by common shares outstanding at the end of the respective period.
(2) Tangible book value per common share is a non-GAAP financial measure calculated as
total shareholders' equity less the sum of preferred stock and goodwilland other
intangible assets divided by common shares outstanding at the end of the respective
period.See discussion of non-GAAP financial measures below.
                                                                         
AVERAGE BALANCES (1)           Quarter Ended                                   Year
                                                                               Ended
                              March 31,  December September June 30, March    
                                          31,      30,                31,
                              2013       2012     2012      2012     2012     2012
Total assets                   $577,050 558,133 539,544  495,602 483,393 519,330
Loans held for sale            $66,434  72,676  75,396   45,451  4,255   49,579
Loans held for investment, net
of allowance for loan and      $369,688 351,335 333,346  324,882 320,251 332,507
lease losses
Total deposits                 $466,018 447,829 434,640  391,591 380,570 413,808
Shareholders' equity           $87,907  87,623  82,485   81,368  80,521  83,010
                                                                         
(1) Average balances are computed on a daily basis.
                                                                         
END OF PERIOD BALANCES         Quarter Ended                                   
                              March 31,  December September June 30, March    
                                          31,      30,                31,
                              2013       2012     2012      2012     2012     
Total assets                   $579,853 563,206 558,011  523,594 495,190 
Loans held for sale            $68,905  80,867  74,632   76,976  29,098  
Loans held for investment, net
of allowance for loan and      $372,052 379,006 336,495  321,991 324,980 
lease losses
Total deposits                 $468,798 453,231 448,144  419,316 392,263 
Shareholders' equity           $87,772  87,547  87,172   81,593  80,587  
                                                                         
RECONCILIATION OF GAAP TO                                                 
NON-GAAP FINANCIAL MEASURES
                              Quarter Ended                                   
                              March 31,  December September June 30, March    
                                          31,      30,                31,
ALLL + Discount / Gross Loans  2013       2012     2012      2012     2012     
Allowance for loan and lease   $5,099   4,875   4,658    4,323   4,137   
losses
Add:Discounts (fair value     $7,631   8,133   9,040    10,764  11,799  
adjustments) on acquired loans
Total ALLL + discounts on      $12,730  13,008  13,698   15,087  15,936  
acquired loans
Gross loans held for
investment + discounts (fair   $384,782 392,014 350,193  337,078 340,916 
value adjustments) on acquired
loans
ALLL plus discounts (fair
value adjustments) on acquired 3.31%      3.32%    3.91%     4.48%    4.67%    
loans as a percentage of total
loans held for investment
                                                                         
                                                                         
Tangible book value per common                                            
share
Total shareholders' equity     $87,772  87,547  87,172   81,593  80,587  
Deduct:Preferred stock        $8,381   8,381   8,381    8,381   8,381   
Common shareholders' equity    $79,391  79,166  78,791   73,212  72,206  
Deduct:Goodwill and other     $15,898  15,989  16,080   16,172  16,263  
intangible assets
Tangible common shareholders'  $63,493  63,177  62,711   57,040  55,943  
equity
Common shares outstanding      10,488    10,488  10,447   10,447  10,447  
Tangible book value per common $6.05    6.02    6.00     5.46    5.35    
share
______________________________                                            
Allowance for loan and lease losses (ALLL) plus discounts on acquired loans as
a percentage of total loans held for investment and tangible book value per
share are supplemental financial measures that are not required by, or
presented in accordance with, U.S. GAAP.Management believes that ALLL plus
discounts on acquired loans held for investment is meaningful because it is
one of the measures we use to assess our asset quality.Management believes
that tangible book value per common share is meaningful because it is one of   
the measures we use to assess capital adequacy.Set forth above are
reconciliations of each of these non-GAAP financial measures calculated and
reported in accordance with GAAP.Book value is the same as shareholders'
equity presented on our consolidated balance sheets.Our calculations of these
non-GAAP financial measures may not be comparable to the calculation of
similarly titled measures reported by other companies.

CONTACT: Thomas W. Osgood
         Executive Vice President, Chief Financial Officer,
         Chief Administrative Officer and Treasurer
         (804) 433-2209
         tosgood@xenithbank.com

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