Dividends On Preferred Shares

9 Months Ended

Sep. 30, 2011

Dividends On Preferred Shares

Dividends On Preferred Shares

Note 12:    Dividends on Preferred Shares

At the request of the Federal Reserve Bank of Kansas City, the Company notified the United States Department of the Treasury (the "Treasury") of its intention to defer the quarterly dividend payments on the Preferred Shares due to the Treasury since May 15, 2009.  As part of the Capital Purchase Plan, the Company entered into a letter agreement with the Treasury on December 5, 2008, which includes a Securities Purchase Agreement-Standard Terms.  As part of the agreement, dividends compound if they accrue and are not paid.  Failure by the Company to pay the Preferred Share dividend is not an event of default.  However, a failure to pay a total of six Preferred Share dividends, whether or not consecutive, gives the holders of the Preferred Shares the right to elect two directors to the Company's Board of Directors.  That right would continue until the Company pays all dividends in arrears.  The dividend payment due on August 15, 2010 was the sixth dividend payment deferred by the Company.  At this time, the Treasury has not elected any directors to serve on the Company's Board of Directors; however, in November 2010 the Treasury assigned an observer to attend the Company's board meetings.  The Company has accrued for the dividends and interest and has every intention to bring the obligation current as soon as permitted.  As of September 30, 2011, the Company had accrued $2,895,000 for dividends and interest on outstanding Preferred Shares.