Hampton Roads Bankshares Inc has a market cap of $72.2 million; its shares were traded at around $3.3 with and P/S ratio of 1.4.
Highlight of Business Operations: Hampton Roads Bankshares, Inc. (the Company), a Virginia corporation, was incorporated under the laws of the Commonwealth of Virginia on February 28, 2001, primarily to serve as a holding company for Bank of Hampton Roads (BOHR). On July 1, 2001, all BOHR Common Stock, par value $0.625 per share, converted into Hampton Roads Bankshares, Inc. Common Stock, par value $0.625 per share (the Common Stock), on a share for share exchange basis, making BOHR a wholly-owned subsidiary of the Company. In January 2004, we formed Hampton Roads Investments, Inc., a wholly-owned subsidiary, to provide securities, brokerage, and investment advisory services. This subsidiary is currently inactive.
The Company has opted to participate in the Federal Deposit Insurance Corporations (FDIC) Transaction Account Guarantee Program (TAGP), whereby the FDIC will provide deposit insurance coverage for the full amount in all of the banks customers noninterest-bearing deposit accounts through December 31, 2010. There is a possibility that the TAGP may be extended for an additional 12 months if the FDIC determines that continuing economic conditions warrant such an extension. This includes personal and business noninterest-bearing checking accounts, low-interest NOW accounts, official items, and certain types of attorney trust accounts with interest rates of 0.25% or less. The TAGP insurance coverage is in addition to the increased coverage provided by the Emergency Economic Stabilization Act of 2008, which temporarily raises the basic FDIC deposit insurance coverage limits to $250,000 through December 31, 2013, from the normal coverage limit of $100,000.
In response to recent unprecedented market turmoil, the EESA was enacted on October 3, 2008. EESA authorizes the Secretary of Treasury (the Secretary) to purchase or guarantee up to $700 billion in troubled assets from financial institutions under the TARP. Pursuant to authority granted under EESA, the Secretary has created the TARP Capital Purchase Program (TARP CPP or CPP) under which the Treasury could invest up to $250 billion in senior preferred stock of U.S. banks and savings associations or their holding companies. Qualifying financial institutions issued senior preferred stock with a value equal to not less than 1% of risk-weighted assets and not more than the lesser of $25 billion or 3% of risk-weighted assets. The senior preferred stock pays dividends at the rate of 5% per annum until the fifth anniversary of the investment and, thereafter, at the rate of 9% per annum. The CPP was amended by the American Recovery and Reinvestment Act of 2009 (ARRA) and states that the senior preferred stock could be redeemed within three years without a qualifying equity offering, subject to the approval of its primary federal regulator. After the three years, the senior preferred may be redeemed at any time in whole or in part by the financial institution. Until the third anniversary of the issuance of the senior preferred, the consent of the Treasury is required for an increase in the dividends on the Common Stock or for any stock repurchases unless the senior preferred has been redeemed in its entirety or the Treasury has transferred the senior preferred to third parties. The senior preferred does not have voting rights other than the right to vote as a class on the issuance of any preferred stock ranking senior, any change in its terms, or any merger, exchange, or similar transaction that would adversely affects its rights. The senior preferred also has the right to elect two directors if dividends have not been paid for six periods. The senior preferred is freely transferable and participating institutions will
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