StellarOne Corp., the parent of a community bank based in Charlottesville, Va., has entered into an agreement with an undisclosed bank investor to resolve repurchase and indemnification claims related to loans originated by the company's retail and wholesale channels prior to 2009.
The company made a cash payment of $1.45 million on Dec. 28, 2010 to the investor; it previously reserved a significant portion of the settlement payment.
The settlement covers 80% of current claims all investors have made with the company. O.R. Barham Jr., president and chief executive, said the preponderance of the claims against StellarOne is from loans originated before Jan. 1, 2009 that were sold to this investor "through one of our legacy companies."
StellarOne added that indemnification losses for the fourth quarter will be similar to those recorded in the third quarter. In that period, there was $809,000 of losses related to repurchases and indemnifications.
