8-K

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

December 11, 2008

(Date of Report - Date of earliest event reported on)

Vermont	000-16435	03-0284070
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Derby Road, Derby, Vermont	05829
(Address of Principal Executive Offices)	(Zip Code)

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 8.01.  Other Events

On December 11, 2008, Community Bancorp. (the “Company”) issued a press release announcing that (1) it has applied to participate in the U.S. Treasury Department’s recently established Capital Purchase Program under the Emergency Economic Stabilization Act of 2008 (“EESA”), and (2) it has elected to participate in the excess deposit account guaranty portion of the FDIC’s recently established Temporary Liquidity Guaranty Program under EESA.

Capital Purchase Program (“CPP”)

The Company has applied under the CPP for the sale to Treasury of up to $9.8 million in preferred stock, representing approximately 3% of risk weighted assets at September 30, 2008.  Under the CPP investment terms announced by Treasury for companies (like Community Bancorp.) that do not have shares listed on a national securities exchange, and assuming that the Company’s application is approved, it is expected that 9,800 shares of preferred stock would be issued to Treasury at a liquidation price of $1,000 per share (the “Initial Shares”) and approximately an additional 490 preferred shares would be issued to Treasury for nominal consideration, pursuant to a preferred stock warrant (the “Additional Shares”).  The Initial Shares would bear a dividend rate of 5% per year for five years and 9% thereafter.  The Additional Shares would bear interest at the rate of 9% per year.  The preferred shares would be ranked senior to the Company’s common stock and on a parity with the existing Series A Preferred Stock.  The shares would be redeemable (subject to certain conditions and restrictions), would be fully transferrable and nonvoting, except for class voting rights in connection with matters which would materially and adversely affect the rights of the holders of the preferred shares.  In the event of certain dividend arrearages, the holders of the preferred shares would have the right to elect two directors, but only for so long as the dividend arrearages remain uncured.

The CPP terms also provide that common stock dividends may not be increased without Treasury’s consent during the first three years of the investment.  Thereafter, until the tenth anniversary of the investment, Treasury’s consent would be required for any increase in common stock dividends greater than 3% per year.  In addition, Treasury’s consent would be required for any repurchase of equity securities (including common stock) or trust preferred securities during the ten year period following Treasury’s investment.  These restrictions on dividends and repurchases only apply during the first ten years for so long as Treasury continues to hold any of the preferred shares.  If any of the preferred shares are still held by Treasury following the tenth anniversary of the investment, the Company would be prohibited from paying any common dividends or repurchasing any equity securities or trust preferred securities until all of Treasury’s preferred shares are redeemed or Treasury has transferred all of such securities to third parties.

The Company has sufficient authorized but unissued shares of preferred stock to participate in the CPP without the need to amend the Company’s articles of incorporation.

Participation in the program is subject to approval by the U.S. Treasury.  The Company cannot predict whether such approval will be granted or, if granted, whether it will be approved for the full requested amount.  In addition, issuance of the preferred stock under the CPP would require the consent of the holders of the Company’s existing Series A Preferred Stock.

If the Company’s CPP application is approved, it is expected that the closing of Treasury’s preferred stock purchase would occur in January, 2009.

While participation in the CPP would enhance the Company’s capital position, the Company and its subsidiary, Community National Bank, currently meet the requirements for “well capitalized” institutions under applicable regulatory capital guidelines.

Temporary Liquidity Guaranty Program (“TLGP”)

The TLGP includes two FDIC guaranty programs, a guaranty for certain senior unsecured debt (the “Debt Guaranty”) and an unlimited deposit account guaranty for certain types of transaction accounts (the “Transaction Account Guaranty”).  The Company, through its subsidiary Community National Bank, has elected to participate in both programs.

The Debt Guaranty applies only to specified types of senior unsecured debt securities issued by participating institutions between October 14, 2008 and June 30, 2009.  The Company does not currently have any outstanding debt securities that would be covered by the Debt Guaranty.  The FDIC’s fee for the Debt Guaranty is based on the amount and maturity of the guaranteed debt and ranges from an annualized 50 to 100 basis points.  The fee is assessed only if and to the extent that the participating institution has guaranteed debt outstanding.

The Transaction Account Guaranty provides an unlimited guaranty through December 31, 2009 for funds held in non-interest bearing transaction accounts, as well as funds held in two types of interest bearing accounts:  NOW accounts on which the interest rate paid is 0.50% or lower on and so-called Interest On Lawyer Trust Accounts (IOLTAs) and similar lawyer trust accounts.  The FDIC will assess quarterly a fee for the Transaction Account Guaranty at an annualized rate of 10 basis points on covered balances in excess of the $250,000 FDIC deposit insurance limit.

Additional information concerning the Company’s application to participate in the CPP and its election to participate in the TLGP is contained in the press release filed as Exhibit 99.1 to this Report.

Item 9.01.  Financial Statements and Exhibits

(d)  Exhibits

99.1  Press Release issued by Community Bancorp. on December 11, 2008

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.

	COMMUNITY BANCORP.
DATED: December 11, 2008	/s/ Stephen P. Marsh
	Stephen P. Marsh,
	President & Chief Executive Officer

EX-99.1

Exhibit 99.1

PRESS RELEASE

For Immediate Release

For more information, contact:  Richard C. White, Chairman, or Stephen P. Marsh, President and CEO, at 802-334-7915

COMMUNITY BANCORP. APPLIES FOR PARTICIPATION IN CAPITAL PURCHASE PROGRAM

(Derby, VT - December 11, 2008)  Community Bancorp. (OTCBB:CMTV), the parent company of Community National Bank, announced today that it has filed an application with its primary regulators, the Office of the Comptroller of the Currency and the Federal Reserve, to participate in the U.S. Treasury Department’s TARP Capital Purchase Program (“CPP”).  The CPP is a voluntary program whose stated aim is to encourage healthy financial institutions to increase lending activities to businesses and consumers and to support the U.S. economy.  The Treasury Department intends to accomplish these goals by purchasing senior preferred shares in financially sound financial institutions.

Under the CPP, if Community Bancorp’s application is approved as submitted, the Company would receive $9.8 million in capital from the Treasury Department in exchange for the issuance of senior preferred stock and warrants for additional shares of senior preferred stock.  The requested amount of $9.8 million represents approximately 3% of risk weighted assets as of September 30, 2008.

“The availability of additional capital for our company would help us further our mission to support our commercial and retail customers and encourage investment in the communities we serve,” said President and CEO Stephen P. Marsh.  He added that “The additional capital could also provide support in the event of an extended economic downturn.”

“Community is well capitalized by all regulatory standards and has a long history of financial strength,” said Community Bancorp. Chairman Richard C. White.  “However, in these challenging economic times, additional capital resources could help us stimulate the local economy in our communities by continuing to expand our relationships with consumer and business customers.  Our intent is to use all the arrows in our quiver to help support our customers and communities throughout our service area in northern and central Vermont.”

The Company cannot predict whether the U.S. Treasury Department will approve its CPP application.  In addition, issuance of the preferred shares under the CPP would require the consent of the holders of the Company’s existing Series A Preferred Shares.

The CPP is part of the larger federal initiative, the Emergency Economic Stabilization Act of 2008, which includes programs expanding FDIC insurance coverage, guaranteeing certain bank debt, allowing Treasury to purchase certain assets from financial institutions, and other programs designed to stabilize the financial markets.  Community has elected to participate in the FDIC’s Temporary Liquidity Guaranty Program under the Act, including a program which provides an unlimited FDIC guaranty for non-interest bearing transaction accounts, NOW accounts earning less than 0.5% and IOLTA accounts.  This enhanced deposit guaranty for these types of accounts supplements the recent increase in FDIC insurance for all deposits up to $250,000.  The expanded deposit insurance coverage and extended guaranty under the Act are scheduled to expire on December 31, 2009.

About Community Bancorp.

Community Bancorp. is the parent company of Community National Bank, an independent bank serving its communities since 1851, with offices now located in Derby, Barre, Barton, Derby Line, Enosburg Falls, Island Pond, Lyndonville, Montpelier, Morrisville, Newport, St. Johnsbury and Troy.

Forward Looking Statements

This press release contains forward-looking statements, including, without limitation, statements about the Company’s financial condition, capital status, business outlook and affairs.  Although these statements are based on management’s current expectations and estimates, actual conditions, results, and events may differ materially from those contemplated by such forward-looking statements, as they could be influenced by numerous factors which are unpredictable and outside the Company’s control.  Factors that may cause actual results to differ materially from such statements include, among others, the following: (1) general economic or monetary conditions, either nationally or regionally, continue to decline, resulting in a deterioration in credit quality or diminished demand for the Company’s products and services; (2) changes in laws or government rules, or the way in which courts interpret those laws or rules, adversely affect the financial industry generally or the Company’s business, or may impose additional costs and regulatory requirements; (3) interest rates change in such a way as to reduce the Company’s interest margins and its funding sources; and (4) competitive pressures increase among financial services providers in the Company’s northern New England market area or in the financial services industry generally, including pressures from nonbank financial service providers, from increasing consolidation and integration of financial service providers and from changes in technology and delivery systems.  In addition, we cannot provide assurance that the Treasury Department will approve the Company’s TARP application at all or in the requested amount, nor can we provide assurance that the required consent of the holders of the Company’s Series A Preferred Stock will be obtained.