Community Bankers Trust Corporation Defers Dividend On TARP Preferred Stock
GLEN ALLEN, Va., Nov. 14, 2011 /PRNewswire/ -- 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 November 2011 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. The November 2011 deferral represents the sixth unpaid dividend with respect to the Preferred Stock.
Under the terms of the Preferred Stock, the Company is required to pay dividends on a quarterly basis at a 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 rights for the holder of the Preferred Stock to appoint two directors to the Company's board. The amount of the November 2011 dividend that will accrue and be unpaid is $221,000.
Rex L. Smith, III, the Company's President and Chief Executive Officer, stated, "One of the limitations that we have with respect to the payment of this dividend is regulatory approval under the written agreement that we have with our federal and state regulators. We have continued to address the concerns that our regulators have had, as reflected in the written agreement, and we believe that the improvements and enhancements that we have implemented over the past year are being reflected in the trends in our financial condition and results of operations. We also continue to remain well capitalized with strong liquidity, and we are taking all steps necessary to recommence our dividend obligations."
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