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Posted December 31, 2008 | Copyright © The Northern Virginia Daily
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Bank of Clarke says no to $10 million federal investment
BERRYVILLE -- The holding company for Bank of Clarke County has announced it will not accept a capital investment from the U.S. Treasury Department.
Eagle Financial Services received preliminary approval for up to $10 million through the Treasury's Capital Purchase Program -- part of the broader Troubled Asset Relief Program -- on Dec. 1, but determined that it does not need the additional capital, the company said in a statement.
Bank of Clarke County continues to be well capitalized under current regulatory guidelines, the company said. Financial institutions are deemed well capitalized when their total capital ratio exceeds 10 percent, their Tier 1 capital ratio exceeds 6 percent, and their leverage ratio exceeds 5 percent.
The bank has experienced an increase in past-due loans, nonperforming loans and charge-offs during 2008, the company said, but these increases are consistent with current economic conditions.
John R. Milleson, president and CEO, said preliminary approval to participate in the Treasury program validates Eagle Financial's capital position, "since the program was intended for strong financial institutions."
"We are a community bank with local shareholders and we don't believe that it is in their best interest to dilute their ownership and carry capital that we don't need," Milleson says. "Sticking to conservative principles and maintaining steady profits have helped generate the capital that allows us to turn down the government's assistance."
Eagle Financial's management and board of directors remain confident that the company can grow and manage loan issues on its own, he says.
-- Daily Staff Report
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