Sussex Bancorp, the parent company of Sussex Bank, has elected not to participate in the US Department of Treasury’s capital purchase program.
The company had been approved in December 2008 to sell $9.99 million in preferred stock to the Treasury under the capital purchase program (CPP), and had taken all steps, including amending its certificate of incorporation to permit the issuance of preferred stock, needed to participate in the CPP.
However, since the company applied to participate in the CPP, a number of changes have occurred which led the company to believe that participating in the program is not in the best interests of its shareholders, said Sussex Bancorp.
Donald Kovach, Sussex Bancorp’s president and CEO, said: We are a very liquid, well-capitalized institution, and our board of directors did not believe we could profitably deploy the additional capital from the CPP program in the current environment. In addition, we have approximately $1 million in additional capital at the holding company level that can be contributed to the bank in the event additional capital is needed.
We also believe, however, that recent changes to the CPP program, and the public perception of institutions that participate in the program, will put us at a marketplace disadvantage and are not in our shareholders’ best interests.
