Bank of Virginia Expects Additional Write-Offs and Increased Loan Loss Reserves, Signs Amended Stock Purchase Agreement With Cor
02 Ottobre 2010 - 12:29AM
Bank of Virginia (Nasdaq:BOVA) today announced that it expects to
incur write-offs and increases to reserves for loan losses in the
third quarter of 2010. The Bank plans to release third quarter
operating results in early November. At this time, the Bank
estimates that the third quarter loan loss provision, which
includes both write-offs and increases to credit reserves, will be
between $4.5 million and $5.5 million. This provision reflects a
continued deterioration in the credit ratings of certain loans in
the portfolio. Frank Bell, President & CEO, commented that, "In
light of the continued economic uncertainty, the Bank is taking a
pro-active stance with regards to credit risk management. Although
the majority of our classified loans have performed as agreed, it
is prudent for us to recognize the economic stress some of our
borrowers are facing and provision accordingly."
Bank of Virginia also announced that Cordia Bancorp has
re-affirmed its intention to purchase common shares of the Bank.
The terms of the Stock Purchase Agreement have been amended
primarily to reflect the anticipated decrease in the bank's book
value as the result of the estimated third quarter loan loss
provision and the Bank's current share price. Cordia has agreed to
increase the maximum amount that it may invest in the Bank from $15
million to $20 million, and to increase the minimum investment from
$6 million to $10 million. The per share purchase price has been
reduced from $3.00 to $2.00 and is subject to adjustment, up or
down, based on the Bank's book value prior to closing. The outside
closing date has been extended until December 31, 2010 to allow the
Bank to complete a shareholder vote and for Cordia to receive the
necessary approvals from bank regulatory authorities. Mr. Bell
said, "The Bank and Cordia remain committed to consummating this
transaction. We are enthusiastic about the potential of a
partnership with Cordia, and are encouraged by their willingness to
stay the course and to increase their equity investment in the
Bank. We remain optimistic that the necessary regulatory approvals
will be forthcoming." Bank of Virginia also announced the hiring of
Nancy E. Corsiglia, who will assume the position of interim Chief
Financial Officer during the 4th quarter of this year. Mr.
Bell stated, "Ms. Corsiglia has had an outstanding career in
finance." She has served as Executive Vice President and, for 15
years, as Chief Financial Officer of the Federal Agricultural
Mortgage Corporation (FAMC), a New York Stock Exchange listed
corporation. She co-started and was instrumental in building FAMC
from a start-up into a national secondary market for agricultural
mortgages and rural loans and financial guarantor with a
$10 billion outstanding book of business. Previously, she
was a Vice President for Federal Government Finance at Paine Webber
Inc., and a Manager in the Treasurer's Office of General Motors
Corporation. She started her career in commercial banking in
New York City. Currently, she is a member of the Board of Directors
of the Private National Mortgage Acceptance Company Mortgage
Opportunity Funds and a member of the Board of Trustees of the
Stoneleigh-Burnham School. She holds an MBA from the Tuck
School of Business at Dartmouth College and an AB in Economics from
Smith College.
Bell said, "Recently, Ms Corsiglia has served as a strategic and
financial advisor to the Bank's management and Board and brings a
wealth of valuable experience and expertise in financial management
and strategy, including capital markets, treasury operations,
asset-liability management, financial disclosure, Sarbanes-Oxley
compliance and corporate governance. We are very pleased to add
Nancy to the Bank of Virginia management team as we finalize our
recapitalization, expand our opportunity to serve our clients, and
reaffirm our commitment to build the finest community bank in
Virginia."
Bank of Virginia operates five full-service branch offices in
Chesterfield County and Henrico County in Virginia. Bank of
Virginia common stock is traded on the NASDAQ stock market under
the quotation symbol "BOVA". Additional investor relations
information can be found on the internet at www.bankofva.com.
DISCLAIMER
This news release may include forward-looking statements. These
forward-looking statements are based on current expectations that
involve risks, uncertainties and assumptions. Should one or more of
these risks or uncertainties materialize or should underlying
assumptions prove incorrect, actual results may differ materially.
These risks include: changes in business or other market
conditions; the timely development, production and acceptance of
new products and services; the challenge of managing
asset/liability levels; the management of credit risk and interest
rate risk; the difficulty of keeping expense growth at modest
levels while increasing revenues; and other risks detailed from
time to time in the Bank's periodic filings with the Board of
Governors of the Federal Reserve System, including the Bank's
annual report on Form 10-KSB as filed with the Board of Governors
of the Federal Reserve. Pursuant to the Private Securities
Litigation Reform Act of 1995, the Bank does not undertake to
update forward-looking statements contained within this news
release.
CONTACT: Bank of Virginia
Frank Bell, III, President & Chief Executive Officer
804-763-1333
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