Xenith Bankshares, Inc. and Colonial Virginia Bank announced Friday the signing of a definitive merger agreement. Bank officials said the merger is expected to be completed, following regulatory review, late in the second quarter or early third quarter of this year.

Thomas W. Osgood, executive vice president for Richmond-based Xenith, parent company to Xenith Bank, said CVB will be merged with and into Xenith Bank. CVB will retain its name for a time following the merger, Osgood said.

Bob Bailey, president and chief executive officer of CVB, will join Xenith Bank’s management team and lead the bank’s activities in the Gloucester area, Osgood said, and work to increase Xenith’s business elsewhere in Hampton Roads.

Kenny Smith, CVB’s executive vice president and chief financial officer, has announced plans to retire, Bailey said. Osgood said Smith will serve as a consultant for Xenith for awhile. Osgood said that “a significant number” of CVB employ...