Area bank wants bailout funds

Eastern Virginia Bankshares has received preliminary approval to receive $24 million from the Treasury Department's Troubled Assets Relief Program.

The Tappahannock-based bank holding company is one 36 state-chartered banks that have applied for TARP funds totaling $705.9 million, according to the State Corporation Commission's Bureau of Financial Institutions.

"Eastern Virginia Bankshares continues to be well capitalized and is pleased that as a result of its strength, it qualified for the Treasury's voluntary capital purchase program," the company said in a statement.

"The company applauds the U.S. Treasury for taking action to restore confidence in the financial markets and national economy and increasing liquidity in the economy by investing in strong financial institutions."

Under the program, which is part of the government's $700 billion economic bailout, the Treasury would receive shares of Eastern Virginia preferred stock, which would pay a 5 percent dividend for the first five years and 9 percent annually thereafter if the shares are not redeemed.

The Treasury also would receive a 10-year warrant entitling it to purchase shares of Eastern Virginia common stock in an amount equal to 15 percent of its investment in preferred stock.

Participation is subject to shareholder approval to issue preferred shares.

The TARP program provides access to low-cost capital, enabling the bank to provide more loans.

Eastern Virginia is the parent company for EVB, which operates 25 branches in Colonial Heights and Caroline, Essex, Gloucester, Hanover, Henrico, King William, Lancaster, Middlesex, New Kent, Northumberland, Southampton, Surry and Sussex counties.
Contact Carol Hazard at (804) 775-8023 or .