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Bank of the James Financial obtains preliminary approval for CPP funds

From the U.S. Treasury Department under the TARP capital purchase programme

Bank of the James Financial Group has received preliminary approval for a $7.71 million investment from the U.S. Treasury Department under the troubled assets relief programme’s capital purchase programme.

The troubled assets relief programme’s capital purchase programme (CPP) is a voluntary programme designed to provide capital to healthy banks and to increase the flow of financing to U.S. businesses and consumers and to support the U.S. economy.

Under the programme, only available to qualifying sound financial institutions, the Treasury will purchase senior preferred shares of stock. Final approval is conditioned on, among other things, continued compliance with the terms of the programme.

Robert Chapman III, president of Bank of the James Financial Group, said: Although we have not yet determined whether we will participate in the CPP and actually accept the funds, we are pleased that we have met the standards imposed by the Treasury as evidenced by the preliminary approval.

The U.S. Treasury recently created the capital purchase programme (CPP) which is part of the troubled assets relief programme to encourage qualifying U.S. financial institutions to increase the flow of financing to businesses and consumers, thereby restoring liquidity and stability to the U.S. financial system. Companies participating in the programme must adopt the Treasury Department’s standards for executive compensation and corporate governance, for the period during which Treasury holds equity issued under this programme. These standards generally apply to the chief executive officer, chief financial officer and the next three most highly compensated executive officers. The approval is subject to certain conditions and the execution of definitive agreements.