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Bank makes June a $50 million month

Michael Schwartz July 3, 2013 0
EVB and its parent company closed Friday on a $45 million capital raise. (Photo by Michael Schwartz)

EVB and its parent company have $50 million in fresh capital to work with. (Photo by Michael Schwartz)

With $45 million already in the bag, a local bank padded its coffers last week with an additional $5 million in fresh capital.

EVB and its parent company on June 28 finished the final leg of its capital raise with $5 million raised from its existing shareholders. They purchased around 1.09 million shares at $4.55 per share.

It was part of a deal to give loyal shareholders a chance to buy in at the same share price offered this year to two large investments firms. That part of the deal brought in $45 million in June from California-based Castle Creek Capital Partners and New York private equity fund GCP Capital Partners. The two firms each also get a seat on the EVB board.

EVB chief executive Joe Shearin said the offering to current shareholders was oversubscribed, meaning it had more demand for shares than it was able to sell.

“It just shows the demand and confidence our current shareholders have in our company,” he said.

EVB has big plans for its newfound cash.

The bank and its parent, Eastern Virginia Bankshares, will look to use the money to continue to work out bad loans and foreclosed real estate and potentially to buy its way out of TARP this year.

EVB received $24 million in capital from the TARP Capital Purchase Program in 2009. Its TARP shares are expected to be put up for auction this year in a process that could give the bank a chance to buy them back at a discount.

“We’re looking at all those different scenarios and trying to determine and prioritize which ones we do first,” Shearin said. The bank will look to reach some of those goals in the third quarter.

EVB has 22 branches across the Richmond region, the Middle Peninsula, the Northern Neck and Western Tidewater.

The $1 billion bank reported a profit of $704,000 in the first quarter, continuing a recent streak of profitability after some tough times between 2009 and 2011.

It finished 2012 with a $1.95 million profit, its largest annual profit since 2008. It cut its nonperforming assets by $21 million during 2012.

The bank is also working to get released from a restrictive written agreement it has been under since February 2011.

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