Community Bankers Trust Corporation Defers Dividend On TARP Preferred Stock
GLEN ALLEN, Va., Aug. 13 /PRNewswire-FirstCall/ -- Community Bankers Trust Corporation, the holding company for Essex Bank (the "Company") (NYSE Amex: BTC), announced today that it has notified the United States Department of the Treasury that it will defer the August 2010 payment of its regular quarterly cash dividend with respect to its Fixed Rate Cumulative Perpetual Preferred Stock, Series A, which the Company issued to the Treasury in connection with the Company's participation in the Treasury's TARP Capital Purchase Program in December 2008.
Under the terms of the Preferred Stock, the Company is required to pay on a quarterly basis a dividend rate of 5% per year for the first five years, after which the dividend rate automatically increases to 9% per year. The Company may defer dividend payments, but the dividend is a cumulative dividend that accrues for payment in the future, and the failure to pay dividends for six dividend periods would trigger board appointment rights for the holder of the Preferred Stock. The amount of the August 2010 dividend that will accrue and be unpaid is $221,000.
The Company previously suspended the payment of its quarterly dividend to holders of common stock, following the payment of a cash dividend in February 2010. While the Company remains well-capitalized, the Company has incurred net losses through June 2010 and resulting decreases in its capital ratios.
George M. Longest, Jr., the Company's President and Chief Executive Officer, stated, "We are in the process of taking the necessary steps to return to profitability. These steps include the assessment of the contributions of all branches to our franchise value and expense reductions so that we can restructure and strengthen the balance sheet. We also believe that retaining capital is an utmost priority until such time as we experience a return to consistent quarterly profitability."About Community Bankers Trust Corporation
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