Announcement no. 3/2009 Fionia Bank enters into an agreement with the state company Financial Stability The Board of Fionia Bank A/S has signed a framework agreement with the state company Financial Stability. The agreement means that banking activities in the current Fionia Bank A/S in transferred to a new company founded and owned by Fionia Bank A/S, but the controls will so far be with the Financial Stability. After the capital injection the new company's solvency will be 13 per cent. Fionia Bank's Board of Directors and Executive Board continue in the new company. Former Member of the Executive Board of Nordea Bank, Jørn Kristian Jensen, is proposed elected as a member of the Board. This is not liquidation, but a strengthening of our ability to operate the bank, stresses CEO Jørgen Bast. Fionia Bank's Board has previously announced plans to strengthen capital base in the current time of large depreciations. The solution reached with the Financial Stability means that the bank's shareholders for a period loses control of the company, but retains ownership. The control can be retained after the agreement, if the bank succeeds in creating enough positive results to return and repay the capital, says CEO Jørgen Bast, Fionia Bank A/S. Fionia Bank A/S will own all shares in the bank except for a single share, owned by the Financial Stability. All shares are pledged as part of the capital injection. Voting rights are transferred in this pledge period for Financial Stability. It is expected that through restructuring as part of a consolidation of the banking sector more normal ownership can be restored. - This agreement maintains the current strategy to reduce property exposures, so there is room for strengthening of business and retail market in Fyn and the Triangle area. The long-standing and extensive cooperation with the local savings banks will also be continued, says Jørgen Bast. The agreement requires approval of the Financial Supervisory Authority, the EU and competition authorities. At its annual general meeting on 10 March 2009 the Board will explain the contents of the agreement. There are proposals to change the name of the current bank to Fionia Bank Holding A/S and give the new company the name Fionia Bank A/S. Tomorrow Fionia Bank A/S will publish its annual report for 2008. The preliminary key figures are in line with previous guidance, including depreciation of 1.218 million DKK. The bank has a satisfactory core earning at 348 million. The Bank's profit before tax shows a deficit of 960 million, and the bank's solvency is before the agreed strengthening of the capital base 8.3 per cent core of which the core capital is 4.2 per cent. It was after discussions with the Supervisory Authority about the bank's solvency requirements that Fionia Bank's Board quantified the bank's needs above the 8.3 per cent. With the capital increase of approx. one billion DKK the solvency of the bank will be around 13 per cent. The bank's management believes that the framework agreement with the Financial Stability provides the best solution for its customers, employees, shareholders and other stakeholders. It is the management's assessment that the framework agreement is a satisfactory solution, which creates the necessary calm about the bank's continued operation and development. The new bank will continue as a going concern, while the audit expresses doubt whether the operation is guaranteed in the old bank Fionia Bank A/S after the divestment of assets and liabilities. In connection with the publication of the agreement with the Financial Stability Fionia Bank A/S has requested its shares to be suspended. A press conference will be held today at the bank at 11:00, where CEO Jørgen Bast and Chairman of the Board Bo Stærmose will report on the agreement with the Financial Stability. Best regards Executive Board
Fionia Bank enters into an agreement with the state company Financial Stability
| Source: Fionia Holding A/S