N@N

Eastern Virginia Bankshares Completes $24 Million U. S. Treasury Capital Purchase Plan

^{Published on 2009-01-15 06:59:50, Last Modified on 2009-01-15 07:01:08 - Market Wire}
 

TAPPAHANNOCK, Va.--([ BUSINESS WIRE ])--Eastern Virginia Bankshares (NASDAQ:EVBS) announces that it completed the sale of 24,000 shares of the Corporation's Fixed Rate Cumulative Perpetual Preferred Stock, Series, A, under the U. S. Treasury's Capital Purchase Program of the Emergency Economic Stabilization Act of 2008. The Preferred issue to the Treasury will pay a dividend of 5% for the first five years and 9% thereafter if they are not redeemed. The Treasury will also receive a ten-year warrant entitling it to purchase 373,832 shares of Eastern Virginia Bankshares common stock at an exercise price of $9.63 per.

The Corporation received preliminary approval of Treasury's investment on December 2, 2008. We received stockholder approval at our special stockholders meeting on December 29, 2008 to amend our Articles of Incorporation to provide for the issuance of preferred stock, allowing the Corporation to issue preferred stock to the Treasury to close the transaction.

The Company's Tier 1 and total capital ratios, a measure of financial strength and soundness, will increase to 13.5% and 14.5% (as of September 30, 2008), well above the regulatory minimum of 6% and 10%, respectively. Our Tier 1 capital increased from $85.9 million to $109.9 million, and our total capital increased from $94.4 million to $118.4 million. Although Eastern Virginia Bankshares was classified as "well capitalized" by all regulatory measures prior to the sale of the preferred stock, this investment by the Treasury provides a low cost of capital to further strengthen the company.

"We are pleased that the U. S. Treasury has chosen to invest in Eastern Virginia Bankshares," stated President and Chief Executive Officer Joe Shearin. This voluntary program provides a low cost capital alternative for our company, further enabling us to supply the credit needs of our local communities and customers. Shearin further stated that, "We are pleased to be recognized among the strongest of financial institutions to help stabilize the financial system and restore public confidence in the local and national economy."

Eastern Virginia Bankshares, the parent company for EVB, operates 25 retail branches located in the counties of Caroline, Essex, Gloucester, Hanover, Henrico, King William, Lancaster, Middlesex, New Kent, Northumberland, Southampton, Surry and Sussex and the City of Colonial Heights. The Company's stock trades on the NASDAQ Global Market System under the symbol EVBS.

Forward-Looking Statements

Certain information contained in this discussion may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are generally identified by phrases such as "the Company expects," "the Company believes" or words of similar import. Such forward-looking statements involve known and unknown risks including, but not limited to:

• changes in the quality or composition of our loan or investment portfolios, including adverse developments in borrower industries, decline in real estate values in our markets, or in the repayment ability of individual borrowers or issuers;
• changes in the interest rates affecting our deposits and our loans;
• the strength of the economy in our target market area, as well as general economic, market, or business conditions;
• an insufficient allowance for loan losses as a result of inaccurate assumptions;
• the loss of any of our key employees;
• changes in our competitive position, competitive actions by other financial institutions and the competitive nature of the financial services industry and our ability to compete effectively against other financial institutions in our banking markets;
• our ability to manage growth;
• our potential growth, including our entrance or expansion into new markets, the opportunities that may be presented to and pursued by us and the need for sufficient capital to support that growth;
• our ability to assess and manage our asset quality;
• changes in government monetary policy, interest rates, deposit flow, the cost of funds, and demand for loan products and financial services;
• our ability to maintain internal control over financial reporting;
• our ability to raise capital as needed by our business;
• our reliance on secondary sources, such as Federal Home Loan Bank advances, sales of securities and loans, federal funds lines of credit from correspondent banks and out-of-market time deposits, to meet our liquidity needs;
• changes in laws, regulations and the policies of federal or state regulators and agencies; and
• other circumstances, many of which are beyond our control.

Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.