UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
September
17, 2008
(Date of
Report - Date of earliest event reported on)
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Vermont
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000-16435
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03-0284070
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(State
of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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Derby
Road, Derby, Vermont
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05829
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant's
Telephone Number: (802) 334-7915
Not
Applicable
(Former
name, former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17CFR
203.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
2.06 Material Impairments
On
September 7, 2008, the United States Department of Treasury and the Federal
Housing Finance Agency (“FHFA”) announced that both the Federal National
Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage
Corporation (“Freddie Mac”) were being placed under conservatorship and that
management of the entities would be under the control of the FHFA, their
regulator. The plan announced by the Treasury Department and the FHFA
includes, among other things, the elimination of dividends on Fannie Mae and
Freddie Mac common and preferred stock.
Community
Bancorp. (the “Company”) owns 27,700 shares of Series F and 20,000 shares of
Series H Fannie Mae preferred stock, all of which are held in the Company’s
available-for-sale portfolio. As of June 30, 2008, the aggregate
adjusted carrying value of such shares was approximately
$1,552,865. The Company does not own any other preferred or common
stock of either Fannie Mae or Freddie Mac.
The
Company announced today that, in view of the recent Federal conservatorship of
Fannie Mae and the related restrictions on its outstanding preferred stock
(including the elimination of dividends thereon), on September 12, 2008,
Management of the Company concluded that the Company would record an
other-than-temporary impairment (“OTTI”) noncash charge with respect to its
holdings of Fannie Mae preferred stock. The OTTI charge related to
such securities will be made as of September 30, 2008 and will be based on the
market value of the shares on that date. As of September 16, 2008,
the aggregate market value of the shares was approximately
$125,973. The amount of this OTTI charge is subject to material
change in the future as a result of significant uncertainties related to Fannie
Mae's business operations and the Federal conservatorship and the continuing
impact of such factors on the market value of the preferred stock.
Management
expects that, even if the Company were to write off its entire investment in the
preferred shares, it and its banking subsidiary would remain “well capitalized”
at September 30, 2008 under applicable regulatory capital
standards.
Additional
information regarding the OTTI charge is contained in the Company’s press
release dated September 17, 2008, filed as exhibit 99.1 to this
report.
This
report contains forwarding-looking statements about the Company, its operations
and financial reporting. Forward-looking statements do not relate
strictly to historical or current facts. Words such as “believe,”
“expect,” “estimate,” and “intend” or future or conditional verbs such as
“will,” “would,” “should,” “could” or “may” denote forward-looking
statements. Certain factors could cause actual results to differ
materially from expected results, including changes in the general economic
conditions (such as interest rates, employment levels and real estate values),
legislative and regulatory changes, further developments with respect to the
Fannie Mae conservatorship, changes in the Company's and Fannie Mae's business
operations and the results thereof and changes in the securities
markets. The Company does not intend to update this Report and
expressly disclaims any obligation to do so, except as otherwise required by
law.
Item
8.01 Other Events
On
September 8, 2008 the Board of Directors of Community Bancorp. declared a
quarterly cash dividend of $.17 per share, payable on November 1, 2008 to
shareholders of record on October 15, 2008.
Item
9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit
99.1 Press Release dated September 17, 2008, announcing declaration
of a quarterly cash dividend and writedown of Fannie Mae preferred
stock.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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COMMUNITY
BANCORP.
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DATED:
September 17, 2008
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/s/ Stephen P.
Marsh
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Stephen
P. Marsh,
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President
& Chief Executive Officer
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