141 saying that “there will be at least six months of tough economic times ahead. A lot depends on what happens in the Middle East on January 15th (if Iraq withdraws from Kuwait). I predict that the economy will begin to pick up in early 1992. Big banks are experiencing problems because of large loans for speculative construction, such as high-rise office buildings which are standing vacant in Northern Virginia and other areas of the country. There aren’t too many high-rises in Clarke County so local community banks are in the best position.” Mr. Hudson announced to the media on January 17, 1991 that Bank of Clarke County had earned a number “1” rating from the Federal Reserve Bank of Richmond under the new Community Reinvestment Act (CRA). Bank of Clarke County was the first bank in Virginia to earn such a rating. “It’s rare for a small bank to earn a one. The rating is based partly on a bank’s ability to make small loans and offer deposit accounts which are fee free, as well as involvement in local organizations such as Help With Housing and the City Light Program. Bank of Clarke County participates in both.” Free checking (consumer and commercial) disappeared in the summer of 1991, following a trend by other banks in the local market. Application was made on October 15, 1991 to organize a holding company named Eagle Financial Services, Incorporated. The Bank’s Board approved the measure and submitted application to the State Corporation Commission and the Federal Reserve Bank of Richmond. The formation would be accomplished by a 2-for-1 split, increasing the authorized common stock from 750,000 to 1,500,000 shares. All ten directors became members of both Boards. President Ewing, in a statement to the press, said “We the Board and Management of the Bank, feel we have a fiduciary responsibility to our shareholders to position ourselves, so that as changes take place in the banking industry, we can be in a position where we can react to those changes quickly to protect our shareholders’ investments and provide better service to our customers”. The formation of a holding company allowed greater flexibility in offering new products and expanding existing product lines. It would also allow opening branches across state lines. Promotions were made in late 1991, including Mrs. Hinson to Senior Vice President and Trust Officer, Mr. Milleson to Senior Vice President, Mr. Hudson to Vice President and Mrs. Larrick to Vice President. Bank of Clarke County purchased the corner of Buckmarsh Street and Mosby Drive in the new Battlefield Estates subdivision in Berryville for $150,000 in early 1992. During that summer, a $750,000 expansion project of 6,000 square feet for the Berryville office was announced. It required demolishing 14 North Church Street and adding on to the north end of the building. Mayor Sponseller commented that “any expansion of business in Berryville, we’re happy about. I’ve seen the bank’s plans and I like the design.” The new addition, the bank said, would be designed to “replace and enhance the Church Street facades that currently exist. We did not design it to look like an addition. We designed it to replace what’s currently there - what the architect refers to as community architecture.”