XBKS Xenith Bankshares, Inc.

Notes to Financial Statements

December 31, 2016 and 2015

The following description of VBA Defined Contribution Plan for Xenith Bankshares, Inc. (formerly the VBA Defined Contribution Plan for Hampton Roads Bankshares, Inc.) (the “Plan”) provides only general information. Xenith Bankshares, Inc. (formerly Hampton Roads Bankshares, Inc.) (the “Plan Sponsor” or the “Company”) is a publicly traded company. Effective July 29, 2016, Hampton Roads Bankshares, Inc. and Xenith Bankshares, Inc. merged with Hampton Roads Bankshares, Inc. being the surviving company in the merger. Immediately following the merger, Hampton Roads Bankshares, Inc. changed its name to Xenith Bankshares, Inc. In connection with the merger, the Plan’s name was also changed. Participants should refer to the plan agreement for a more complete description of the Plan’s provisions.

The Plan is a defined contribution plan covering all eligible legacy Hampton Roads Bankshares, Inc. (pre-merger company) employees and employees joining the Company after the effective date of the merger, July 29, 2016, who have at least three months of service and are at least twenty-one years of age. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). Employees of legacy Xenith Bankshares, Inc. (pre-merger company) remained participants in the defined contribution plan of legacy Xenith Bankshares, Inc. through December 31, 2016.

Each year, participants may contribute up to 96% of pre-tax compensation, as defined in the Plan, up to the maximum allowable by the Internal Revenue Code (“IRC”). These limits were $18,000 for 2016 and 2015. Participants who have attained age 50 before the end of the plan year are eligible to make catch-up contributions. These catch-up contributions are subject to Internal Revenue Service (“IRS”) limits of $6,000 for 2016 and 2015. Participants may also contribute funds from other tax-qualified plans as rollover contributions. The Plan Sponsor provides matching contributions of 100% of the first 3% of base compensation and 50% for the next 2% of base compensation that a participant contributes to the Plan; these matching contributions are allocated proportionate to the participant holdings. Additional profit sharing amounts may be contributed at the discretion of the Plan Sponsor’s board of directors. No discretionary profit sharing contributions were made during the years ended December 31, 2016 or 2015.

Each participant’s account is credited with the participant’s contributions and allocations of matching contributions and plan earnings on the account and charged with an allocation of administrative expenses. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

Participants may borrow from their account an amount not to exceed the lesser of $50,000 or 50% of their vested account balance. The minimum amount of each note allowed by the Plan is $1,000. A participant may only have two notes outstanding at a given time. Notes must be repaid within five years unless the note is used to acquire a principal residence for the participant for which the note must be repaid within a reasonable period of time not to exceed 15 years. The notes are secured by the vested balance in the participant’s account. All notes of the Plan bear interest at a fixed annual rate. The fixed rate of interest is set at 1% over the Wall Street Journal Prime Rate at the time that the note application is made or approved. Principal and interest are paid ratably through payroll deductions.

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VBA DEFINED CONTRIBUTION PLAN FOR

XENITH BANKSHARES, INC. (FORMERLY THE VBA DEFINED

CONTRIBUTION PLAN FOR HAMPTON ROADS BANKSHARES, INC.)

Notes to Financial Statements

December 31, 2016 and 2015

Participants direct the investment of all contributions into various investment options offered by the Plan. Participants may choose to invest up to 10% of their account balance and 10% of future contributions in the Plan Sponsor’s common stock. The Plan Sponsor’s company stock is held by participants in a unitized fund, which means participants do not own shares of Company stock, but rather own an interest in the unitized fund. The fund consists of common stock and cash equivalents to meet the fund’s daily cash needs. Unitizing the fund allows for daily trades. The value of a unit reflects the combined value of the Company common stock and cash held by the fund. The Plan owns the underlying assets of shares in common stock and the underlying cash.

Participants are vested immediately in their contributions and in the Plan Sponsor’s matching contributions plus actual earnings thereon. Vesting in the Plan Sponsor’s profit sharing contribution portion of their accounts is based on years of service, as defined by the Plan. Upon reaching three years of credited service, a participant becomes 100% vested in Plan Sponsor’s profit sharing contributions.

On termination of service, a participant may elect to receive a lump-sum amount equal to the value of the participant’s vested interest in his or her account or annual installments. In certain situations, participants may receive in-service hardship withdrawals from the elective deferral and employer match portions of their account.

At December 31, 2016 and 2015, there were no forfeited non-vested accounts. Under the Plan, any forfeited non-vested accounts are used to reduce future employer contributions. No forfeitures were used to reduce employer contributions for the years ending December 31, 2016 and 2015.

The financial statements of the Plan are prepared on the accrual basis of accounting.

Certain administrative expenses are absorbed by the Plan Sponsor, including audit, legal, and filing fees. Custodial and transaction fees are paid out of the Plan’s assets.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets available for benefits, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Refer to Note 3, Fair Value Measurements , for discussion of fair value measurements.

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation or depreciation in fair value of investments includes the Plan’s gains and losses on investments bought and sold as well as held during the year.

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VBA DEFINED CONTRIBUTION PLAN FOR

XENITH BANKSHARES, INC. (FORMERLY THE VBA DEFINED

CONTRIBUTION PLAN FOR HAMPTON ROADS BANKSHARES, INC.)

Notes to Financial Statements

December 31, 2016 and 2015

Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. If a participant ceases to make note repayments and the plan administrator deems the note receivable to be in default, the note receivable is reduced and a benefit payment is recorded. The Form 5500 presents notes receivable from participants as an investment.

Benefits are recorded when paid.

FASB Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures , establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below:

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2016 and 2015.

Plan Sponsor Common Stock : Valued at the closing price reported on the stock exchange on which the individual securities are traded.

Mutual Funds : Valued at the closing price reported on the active market, which represents the net asset value of shares held by the Plan.

Stable Value Fund : Valued at net asset value, which is used as a practical expedient for fair value. The use of net asset value as fair value is deemed appropriate as there are no imposed redemption restrictions and the Plan does not have any contractual obligations to further invest in the Stable Value Fund. Refer to Note 4, Investment in Stable Value Fund , for more information.

Other Collective Trust Funds: Valued at net asset value based on underlying investments. For the equity related collective trust funds, the underlying investments are primarily publicly traded common stock. For the debt related common collective trust fund, the underlying investments are primarily treasury bonds, securitized debt, and other credit. There are no restrictions on trading of these other common collective trust funds and the investments are valued daily.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes the valuation methods are appropriate and

consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

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For the years ended December 31, 2016 and 2015, there were no transfers between Level 1 and 2 and no assets in or out of Level 3.

The Plan invests in the Reliance Trust Stable Value Fund, MetLife Series 25157 (the “Stable Value Fund”). The Stable Value Fund invests entirely in the MetLife Group Annuity Contract 25157, which consists of separately managed investment portfolios in fixed income securities, and also enters into wrapper contracts, which are issued by third-parties and are designed to allow the Stable Value Fund to maintain a constant net asset value. The Stable Value Fund is credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses.

Participants are able to transact at net asset value, which is the same as contract value for the Stable Value Fund. Contract value, as reported to the Plan, represents contributions made under the contract, plus earnings, less participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value.

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VBA DEFINED CONTRIBUTION PLAN FOR

XENITH BANKSHARES, INC. (FORMERLY THE VBA DEFINED

CONTRIBUTION PLAN FOR HAMPTON ROADS BANKSHARES, INC.)

Notes to Financial Statements

December 31, 2016 and 2015

There are no reserves against the contract value for credit risk of the contract issuer or otherwise. The crediting interest rate is based on a formula agreed upon with the issuer. Such interest rates are reviewed on a quarterly basis for resetting.

Certain events may limit the ability of the Plan to transact at contract value with the Stable Value Fund. Such events include the following: (1) amendments to the plan documents (including complete or partial plan termination or merger with another plan that requires liquidation of the Stable Value Fund), (2) changes to the Plan’s prohibition on competing investment options or deletion of equity wash provisions, (3) bankruptcy of the Plan Sponsor or other Plan Sponsor events (for example, divestitures or spin-offs of a subsidiary that require liquidation of the Stable Value Fund), or (4) the failure of the trust to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA. The plan administrator does not believe that any events which would limit the Plan’s ability to transact at contract value with participants have occurred or are probable of occurring.

Average yields for the Stable Value Fund for years ended December 31, 2016 and 2015 were as follows:

The Plan received a favorable determination letter dated May 30, 2012, whereby the IRS stated that the Plan and related trust are designed in accordance with the applicable sections of the IRC. The Plan was amended in 2016 to change the plan name, to exclude the former employees of legacy Xenith Bankshares, Inc. from participation in the Plan, and to limit non-hardship withdrawals to no more than four in a plan year. The Plan Sponsor’s management believes the amendments to the Plan had no affect on the tax status of the Plan.

U.S. GAAP requires plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The plan administrator has analyzed the tax positions taken by the Plan and has concluded that as of December 31, 2016, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are no audits for any tax periods currently in progress. Tax years 2014 through the current year remain subject to audit.

The Plan Sponsor has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants would become 100% vested in their employer contributions.

Reliance Trust Company is the trustee and investment manager of the Plan, and therefore, transactions in the Stable Value Fund qualify as party-in-interest transactions, which are exempt from the prohibited transaction rules of ERISA and the IRC. Amounts paid to Reliance Trust Company from plan assets were $31,513 in 2016.

In addition, any transaction in the Plan Sponsor’s common stock and notes receivable from participants also qualify as exempt party-in-interest transactions. Employer securities and notes receivable form participants are permitted by ERISA and the United Sates Department of Labor Rules and Regulations. The fair value of the Plan Sponsor’s common stock is based on quotes from a stock exchange. The Plan held 17,319 and 20,927 shares of the Plan Sponsor’s common stock at December 31, 2016 and 2015, respectively.

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VBA DEFINED CONTRIBUTION PLAN FOR

XENITH BANKSHARES, INC. (FORMERLY THE VBA DEFINED

CONTRIBUTION PLAN FOR HAMPTON ROADS BANKSHARES, INC.)

Notes to Financial Statements

December 31, 2016 and 2015

The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the Statements of Assets Available for Benefits.

In January 2017, the legacy Xenith Bankshares, Inc. defined contribution plan was merged with and into the Plan, as approved and permitted by the plan document. Net assets available for benefits totaling $8.7 million were transferred into the Plan at the time of the merger of the plans.

Effective January 1, 2017, the Plan was amended to, among other things, remove the minimum age requirement and reduce the service requirement to one month of service for participation eligibility.

On May 22, 2017, the Company announced the execution of an Agreement and Plan of Reorganization, dated as of May 19, 2017, (the “Merger Agreement”) pursuant to which, subject to the terms and conditions set forth in the Merger Agreement, the Company will merge with and into Union Bankshares Corporation (“USBH”), with UBSH as the surviving corporation in the merger. In accordance with the Merger Agreement, after a specified period of time, as defined in the Merger Agreement, the Plan will merge into the defined contribution plan of USBH. The parties to the Merger Agreement expect the merger to occur in the first quarter of 2018.

The Plan Sponsor has evaluated subsequent events through June 29, 2017, the date these financial statements were available to be issued and, except as disclosed, there are no additional events requiring disclosure.

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