WashingtonFirst sells investment in preferred CDO due to Volcker Rule

By Angela McDaniels

Tacoma, Wash., Dec. 27 - WashingtonFirst Bankshares, Inc. said it liquidated its investment in a bank trust preferred collateralized debt obligation security (the "Trapeza CDO") because of uncertainty about the future accounting implications of the investment under the revised Volcker Rule of the Dodd-Frank Act.

The Trapeza CDO, which was purchased in 2007 and classified as available for sale, was sold on Dec. 19 for $700,000 of net proceeds, according to a company news release.

As of Sept. 30, the Trapeza CDO had a par value of $2.7 million, a book value of $2.2 million and a carrying value of $100,000.

The difference between the net proceeds and the book value will result in an after-tax charge of about $900,000 to the company's fourth-quarter net income.

Reston, Va.-based WashingtonFirst Bankshares is the holding company for WashingtonFirst Bank.

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