EVB has shaved off another chunk of its TARP stock. Photo by Michael Schwartz.
A local bank continues to chip away at its TARP shares.
EVB and its Eastern Virginia Bankshares holding company spent $5 million this week to buy back another 5,000 shares of preferred stock that were initially issued to the U.S. Treasury Department as part of the TARP Capital Purchase Program.
Those shares were most recently owned by a group of unidentified investors who purchased them from the Treasury at an auction in 2013.
EVB already spent $10 million in October to buy back 10,000 TARP shares from the investor group. The bank still has 9,000 TARP shares outstanding, which at the $1,000-per-share price means it has $9 million more to go to completely rid itself of the burden.
The company received $24 million in 2009 from the Capital Purchase Program, part of the now-infamous Troubled Asset Relief Program. EVB was one of eight local banks that participated in TARP, a program designed to give banks a capital cushion at the height of the recession.
This latest buyback will save the bank an additional $450,000 a year in dividends that would have been due to be paid on the shares. The dividend rate is currently 9 percent after jumping up from 5 percent last year.
Joe Shearin, chief executive at EVB, said the bank has been planning this latest purchase since the summer when it was working to finalize its acquisition of a Newport News-based bank.
“Because were buying Virginia Company Bank, I wanted to hold the $5 million back to make sure we came through the merger ok, just being conservative,” he said.
EVB closed on that $9.6 million acquisition in November, grabbing its first presence in the Hampton Roads market by taking on VCB’s three branches.
The two banks are merging their internal systems this weekend, and the EVB flag will fly for the first time at the VCB branches on Monday morning.
Moving forward, Shearin said his bank will plot out how best to buy back the remaining TARP shares from the investor groups.
“It leaves us with $9 million left, and we’re working on a plan of action at how we whittle away at that,” he said. “The economy is getting a little better, but it’s not booming, so you still have to be conservative.”
EVB has shaved off another chunk of its TARP stock. Photo by Michael Schwartz.
A local bank continues to chip away at its TARP shares.
EVB and its Eastern Virginia Bankshares holding company spent $5 million this week to buy back another 5,000 shares of preferred stock that were initially issued to the U.S. Treasury Department as part of the TARP Capital Purchase Program.
Those shares were most recently owned by a group of unidentified investors who purchased them from the Treasury at an auction in 2013.
EVB already spent $10 million in October to buy back 10,000 TARP shares from the investor group. The bank still has 9,000 TARP shares outstanding, which at the $1,000-per-share price means it has $9 million more to go to completely rid itself of the burden.
The company received $24 million in 2009 from the Capital Purchase Program, part of the now-infamous Troubled Asset Relief Program. EVB was one of eight local banks that participated in TARP, a program designed to give banks a capital cushion at the height of the recession.
This latest buyback will save the bank an additional $450,000 a year in dividends that would have been due to be paid on the shares. The dividend rate is currently 9 percent after jumping up from 5 percent last year.
Joe Shearin, chief executive at EVB, said the bank has been planning this latest purchase since the summer when it was working to finalize its acquisition of a Newport News-based bank.
“Because were buying Virginia Company Bank, I wanted to hold the $5 million back to make sure we came through the merger ok, just being conservative,” he said.
EVB closed on that $9.6 million acquisition in November, grabbing its first presence in the Hampton Roads market by taking on VCB’s three branches.
The two banks are merging their internal systems this weekend, and the EVB flag will fly for the first time at the VCB branches on Monday morning.
Moving forward, Shearin said his bank will plot out how best to buy back the remaining TARP shares from the investor groups.
“It leaves us with $9 million left, and we’re working on a plan of action at how we whittle away at that,” he said. “The economy is getting a little better, but it’s not booming, so you still have to be conservative.”