The Village Bank headquarters on Midlothian Turnpike. (Courtesy of CBRE)
Another local bank might soon be able to scratch the federal government off its list of shareholders.
Shares of Midlothian-based Village Bank that are owned by the U.S. Treasury as part of Village’s participation on the TARP Capital Purchase Program have been put up for sale at auction.
The auction, which is part of the government’s winding down of the once controversial program, began Nov. 4 and will close today at 6 p.m.
Should its shares sell, Village would be the fifth local bank to exit the TARP program. Most recently, the TARP shares of EVB parent Eastern Virginia Bankshares were sold in October for $26.49 million. Union First Market, First Capital and C&F Bank have bought their way out.
In 2008 and 2009, eight local banks participated in TARP, receiving a combined $191 million in funds that were intended to prop up the banks as the recession took hold. Treasury in 2012 began auctioning the shares of certain banks that had yet to buy their way out.
In some instances, the Treasury’s auctions have allowed able banks to buy their way out of TARP at a discount, as was the case with First Capital. EVB’s ended up selling at a premium to an outside buyer.
Village Bank President Bill Foster said the bank will not look to bid on the shares at auction. He declined to comment further while the auction process is pending. Foster will take over for longtime leader Tom Winfree as Village’s chief executive at year’s end.
The $459 million bank remains under a written agreement with regulators. The restrictive covenant requires state and federal regulatory approval should the bank want to make a play to buy the shares back from either Treasury or the private party that might buy them at this week’s auction.
Village reported a loss of $488,000 for the third quarter. That includes the deferred dividends it must pay on its TARP shares. That dividend will continue even if an outside buyer takes them at auction.
The Village Bank headquarters on Midlothian Turnpike. (Courtesy of CBRE)
Another local bank might soon be able to scratch the federal government off its list of shareholders.
Shares of Midlothian-based Village Bank that are owned by the U.S. Treasury as part of Village’s participation on the TARP Capital Purchase Program have been put up for sale at auction.
The auction, which is part of the government’s winding down of the once controversial program, began Nov. 4 and will close today at 6 p.m.
Should its shares sell, Village would be the fifth local bank to exit the TARP program. Most recently, the TARP shares of EVB parent Eastern Virginia Bankshares were sold in October for $26.49 million. Union First Market, First Capital and C&F Bank have bought their way out.
In 2008 and 2009, eight local banks participated in TARP, receiving a combined $191 million in funds that were intended to prop up the banks as the recession took hold. Treasury in 2012 began auctioning the shares of certain banks that had yet to buy their way out.
In some instances, the Treasury’s auctions have allowed able banks to buy their way out of TARP at a discount, as was the case with First Capital. EVB’s ended up selling at a premium to an outside buyer.
Village Bank President Bill Foster said the bank will not look to bid on the shares at auction. He declined to comment further while the auction process is pending. Foster will take over for longtime leader Tom Winfree as Village’s chief executive at year’s end.
The $459 million bank remains under a written agreement with regulators. The restrictive covenant requires state and federal regulatory approval should the bank want to make a play to buy the shares back from either Treasury or the private party that might buy them at this week’s auction.
Village reported a loss of $488,000 for the third quarter. That includes the deferred dividends it must pay on its TARP shares. That dividend will continue even if an outside buyer takes them at auction.