Eastern Virginia Bankshares, Inc. (the “Company”) (NASDAQ: EVBS) and its banking subsidiary, EVB (the “Bank”) announced today that they have entered into a written agreement (the “Agreement”) with the Federal Reserve Bank of Richmond and the Virginia State Corporation Commission Bureau of Financial Institutions (together, the “Regulatory Agencies”). The purpose of the Agreement is to formally document the common goal of the Company, the Bank and the Regulatory Agencies to maintain the financial soundness of the Company and the Bank. Under the terms of the Agreement, the Company and the Bank have committed to take certain steps to strengthen the Company’s and the Bank’s financial condition. These steps will primarily focus on improving the supervision and internal controls over credit risk management practices, the quality of the loan and asset portfolios, and the Company’s and the Bank’s capital, liquidity and earnings.
“This Agreement, as we announced earlier this month, gives us the opportunity to work closely with the regulatory agencies to address the Company’s and the Bank’s challenges and improve our financial performance. We are pleased with the continued support of the regulatory agencies and look forward to the successful results of our actions. The Board and the Management Team are fully committed to resolving these issues and returning the Company to profitability,” said Randy Cook, Chairman of the Board of Directors.
President and CEO Joe Shearin commented, “This is an important day for our company. This Agreement contains many of the steps we initiated during the last several quarters to address our deteriorating asset quality and associated challenges brought on during the economic recession. This Agreement addresses improving oversight and administration of the Bank’s operations, including improving credit risk management processes, lending and credit administration processes, the quality of the loan and asset portfolios and processes used to manage the quality of these portfolios, and the balance of and processes related to loan loss reserves. Despite the aggressive steps we have already taken to substantially increase our loan loss reserves and improve asset quality, we remain well capitalized under all regulatory measurements. ”
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