Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the securities to be issued under this joint proxy statement/prospectus or determined if this joint proxy statement/prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

This summary highlights selected information from this joint proxy statement/prospectus. It may not contain all of the information that is important to you. To better understand the merger and its potential impact on you, we urge you to read this entire document carefully, including the appendices, exhibits and enclosures. Each item in this summary includes a page reference directing you to a more complete discussion of the item.

 

The Companies (pages 83, 106 and 148)

 

Community Bankers.

 

Community Bankers Acquisition Corp.
9912 Georgetown Pike, Suite D-203
Great Falls, Virginia 22066
(703) 759-0751

 

Community Bankers was organized under the laws of the State of Delaware on April 6, 2005. As a “Targeted Acquisition Corporation^sm,” or TAC^sm,” Community Bankers was formed to effect a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business in the banking industry. Community Bankers consummated its initial public offering on June 8, 2006, raising approximately $60 million, approximately $58 million of which is currently held in a trust account at J.P. Morgan Chase Bank. Shares of Community Bankers common stock trade on the American Stock Exchange under the symbol “BTC.”

 

On September 5, 2007, Community Bankers entered into the agreement and plan of merger with TransCommunity. TransCommunity is a registered financial holding company incorporated under the laws of Virginia and is the holding company for TransCommunity Bank, N.A. TransCommunity is headquartered in Glen Allen, Virginia and operates five full service offices in its four operating divisions in Goochland, Powhatan, Louisa and Rockbridge, Virginia. TransCommunity Bank had deposits of $192.0 million, loans of $189.0 million, assets of $223.0 million and equity of $29.9 million, at September 30, 2007. Community Bankers must complete its merger with TransCommunity by June 7, 2008, or, under its certificate of incorporation, Community Bankers must dissolve and liquidate.

 

As a result of the merger of Community Bankers and TransCommunity, each share of TransCommunity common stock will be converted into 1.4200 shares of Community Bankers common stock, subject to possible adjustment. Community Bankers and TransCommunity have prepared a separate joint proxy statement/prospectus relating to the merger of Community Bankers and TransCommunity which has been mailed to Community Bankers and TransCommunity stockholders in connection with the annual meeting of the stockholders of Community Bankers and the special meeting of the stockholders of TransCommunity at which a proposal to approve the merger of Community Bankers and TransCommunity will be considered.

 

The merger with TransCommunity is Community Bankers’ initial business combination, and Community Bankers’ certificate of incorporation mandates certain voting requirements for its initial business combination. Pursuant to Community Bankers’ certificate of incorporation, adoption of the merger agreement relating to the initial business combination requires the affirmative vote of holders of a majority of Community Bankers outstanding shares of common stock issued in Community Bankers’ initial public offering and voted at the meeting.

 

In addition, for an initial business combination the holders of the shares of common stock issued in Community Bankers initial public offering have the right to convert their stock into cash equal to a pro rata portion of the Community Bankers trust account if they vote against the merger. For Community Bankers to complete its merger with TransCommunity, the holders of less than 20% of the outstanding shares of common stock issued in the Community Bankers’ initial public offering must have exercised their conversion rights.

 

Pursuant to Delaware law, adoption of the merger agreement with TransCommunity requires the affirmative vote of the holders of a majority of the outstanding shares of Community Bankers common stock entitled to vote at the annual meeting.

BOE.

 

BOE Financial Services of Virginia, Inc.
1325 Tappahannock Boulevard
Tappahannock, Virginia 22560
(804) 443-4343

 

BOE is a bank holding company incorporated under the laws of Virginia and is the holding company of Bank of Essex. Bank of Essex operates eight full-service offices, two in Tappahannock, and one each in Manquin, Mechanicsville, West Point, Glen Allen, Burgess and Callao, Virginia, respectively. Bank of Essex had deposits of $241.0 million, loans of $213.5 million, assets of $294.8 million and equity of $29.3 million, at September 30, 2007.

 

Recent Developments (pages 84, 107 and 148)

 

Community Bankers.

 

On February 15, 2008, Community Bankers announced its results of operations for the period from April 1, 2007 until December 31, 2007. For the period from April 1, 2007 to December 31, 2007, interest income on its trust fund investments, including interest allocable to shares subject to possible conversion, amounted to $1,933,962. This resulted in net income for the period from April 1, 2007 to December 31, 2007 of $1,105,034 or net income per share, basic and diluted, of $0.12 and $0.09, respectively. The aggregate amount of cash and United States treasury securities held in the trust fund as of December 31, 2007, was $58,452,512.

 

BOE.

 

On February 4, 2008, BOE announced its results of operations for the fourth quarter of 2007. Net income for the fourth quarter of 2007 was $596,000, a decrease of $317,000, or 34.7%, from net income of $913,000 for the same period in 2006. The decrease to net income for the fourth quarter of 2007 compared to the same period in 2006 was due to a December 2006 sale of a former branch banking facility. This nonrecurring item caused gain on sale of other properties to be $477,000 in the fourth quarter of 2006 compared to $0 for the same period in 2007. Additionally, there was an increase of $187,000 in noninterest expenses, from $2.2 million in the fourth quarter of 2006 to $2.4 million in the fourth quarter 2007. Offsetting these decreases to net income was an increase of 8.9%, or $209,000, in net interest income. Net interest income was $2.6 million for the fourth quarter 2007 compared to $2.4 million for the fourth quarter of 2006. Also, there was an increase of $55,000, or 11.5%, in noninterest income, from $479,000 in the fourth quarter of 2006, to $534,000 for the same period in 2007. Income tax expense declined 42.0%, or $84,000, from $200,000 in the fourth quarter of 2006 to $116,000 in the fourth quarter of 2007. Additionally, strong asset quality resulted in no additional expense in provision for loan losses for the fourth quarter of both years. On December 31, 2007 loans past due 90 days or more and accruing interest was $17,000 and loans not accruing interest totaled $96,000. For the year ending December 31, 2007 charged-off loans were $272,000 against recoveries of $461,000. Earnings per common share were $0.49 for the fourth quarter in 2007 compared to $0.75 for the same period in 2006.

 

For the year ended December 31, 2007, BOE reported net income of $2.608 million, compared to net income of $3.1 million for 2006, a decrease of $515,000, or 16.5%. This decrease in earnings was primarily the result of an increase of $876,000, or 11.1%, in noninterest expenses. Salaries was the largest component of this increase, $432,000, which increased primarily from the addition of staff that was hired and trained in 2007 to operate two new full service offices of Bank of Essex in Northumberland County, Virginia.

 

The year 2007 was the first full year of operations for BOE’s corporate headquarters and branch banking facility that opened in June 2006, accounting for the majority of increases in occupancy expenses of $159,000. Gain on sale of other properties decreased $467,000 from 2006 to 2007 due to the sale of bank property referred to above. Additionally, legal and professional fees increased $236,000 in 2007 compared to 2006 as a result of BOE’s due diligence process prior to announcing the merger agreement with Community Bankers. Offsetting these decreases to net income was an increase of $237,000, or 2.4%, in net interest income, from $9.8 million in 2006 to $10.0 million in 2007. Noninterest income increased $204,000, or 11.4%, from

$1.8 million in 2006 to $2.0 million in 2007. Also improving net income was a 95.2%, or $119,000, reduction in provision for loan losses and a 33.5%, or $292,000, decrease in income tax expense for 2007 compared to 2006. Earnings per common share were $2.15 for the full year 2007 compared to $2.58 for the same period in 2006. Average diluted shares outstanding increased by 5,143 during 2007.

 

Loans, net of allowance for loan losses, increased 12.6%, or $24.5 million, and were $219.0 million on December 31, 2007. Total deposits grew 5.9%, or $13.7 million, to end 2007 at $244.6 million.

 

TransCommunity.

 

Net income for the year ended December 31, 2007 was $2.5 million, or $0.54 per share (basic and diluted), versus net income of $117 thousand, or $0.03 per share for the same period during 2006.

 

Results for 2007 were significantly affected by recognition at year-end of a deferred tax asset totaling $3.3 million, arising primarily from recognition by TransCommunity of the net operating loss carry forwards generated since TransCommunity’s inception. TransCommunity determined the timing and amount of the recognition of the deferred tax asset in accordance with FAS 109, which states “all available evidence, both positive and negative, should be considered to determine whether, based on the weight of that evidence, a valuation allowance is needed.” The pending merger with Community Bankers was not a factor in TransCommunity’s determination to recognize the deferred tax asset.

 

The primary positive factor that contributed to the decision to recognize the deferred tax asset was the completion of TransCommunity’s 2007 restructuring pursuant to which TransCommunity’s former four subsidiary banks were consolidated into one charter and the resulting anticipated future profitability. TransCommunity spent approximately $500,000 consolidating the charters and operations of the banks during 2007, and projects future recurring annual savings related to the restructuring to be approximately $800,000. This restructuring was completed and the arrangements for the related cost savings were finalized in the first part of the fourth quarter of 2007.

 

The negative factors that TransCommunity considered were TransCommunity’s history of operating losses and the fact that the amount of net operating losses that can be utilized in any one year is limited to approximately $800,000.

 

Based on the totality of the evidence, TransCommunity believes that it was appropriate to recognize the deferred tax asset for future periods commencing in the fourth quarter of 2007. In addition, based on anticipated taxable income, TransCommunity believes the entire deferred tax asset will be realized before the related net operating losses begin to expire in 2022, and accordingly recorded the entire deferred tax asset. As a result of recognizing this deferred tax asset, TransCommunity expects to incur tax expense related to income earned in 2008 and subsequent years.

 

Without recognition of this deferred tax asset, performance for 2007 would have been a loss of $829 thousand, versus net income of $117 thousand for 2006. Inclusive of the deferred tax asset, the return on average assets for 2007 was 1.16% compared to .06% for 2006. Return on average equity for 2007 was 8.23% compared to 0.39% for 2006.

 

During 2007, total assets grew by 20%, led by strong growth in the loan portfolio of 36%. Although TransCommunity’s employee headcount remained constant during 2007, noninterest expenses grew 19% to $10.6 million, reflecting one-time costs associated with the consolidation of TransCommunity’s four banking charters, and centralization of many back-room operational functions.

 

TransCommunity’s net interest margin for 2007 was 5.13% versus 5.14% for 2006. Although TransCommunity was able to maintain its historic high level of net interest margin during 2007, this key profitability indicator is expected to decline in 2008 as a result of the actions of the Federal Reserve Board to lower interest rates.

 

During 2007, as part of the consolidation of its bank charters, TransCommunity centralized its credit administration function, and hired its first chief credit officer. Following consolidation, the new chief credit officer performed a full review of the entire loan portfolio. This review, plus several credit downgrades in the final quarter of the year, resulted in an increase in the allowance for loan losses during 2007 of $1.6 Million.

At December 31, 2007 the allowance for loan losses stands at $3.0 million, or 1.48% of total loans. At December 31, 2006, the allowance for loan losses was $2,100,000, or 1.36% of total loans.

 

At December 31, 2007, total assets were $238.2 million versus $198.4 million at December 31, 2006. Loans, net of the allowance for loan losses, equaled $202.4 million, as compared with $149.3 million at year-end 2006. Total deposits at December 31, 2007 were $203.6 million, representing growth of 23.4% from $165.0 million at year-end 2006.

 

The Merger (page 45)

 

The merger agreement with BOE is attached as Appendix A to this joint proxy statement/prospectus. You should read the merger agreement because it is the legal document that governs the merger. The merger agreement provides for the merger of BOE with and into Community Bankers. Following the merger:

 

 

As a result of the merger, each share of BOE stock will be converted into 5.7278 shares of Community Bankers common stock, subject to possible adjustment. In the event the average of the daily closing prices of Community Bankers common stock as reported on the American Stock Exchange for the 20 consecutive full trading days ending on the fifth day before the anticipated closing date of the merger is less than $7.42, the exchange ratio will be increased to equal the quotient obtained by dividing $42.50 by the average of the daily closing prices during those 20 consecutive full trading days, rounded to the nearest one-ten thousandth. Community Bankers common stock is listed on the American Stock Exchange under the symbol “BTC.” BOE common stock is listed on the Nasdaq Capital Market under the symbol “BSXT.”

 

Upon completion of the merger, Community Bankers expects to pay regular dividends to its stockholders. Subject to board and regulatory approval, Community Bankers expects to pay quarterly cash dividends in an amount not less than the quotient obtained by dividing $0.22 by the BOE exchange ratio, for the foreseeable future.

 

We cannot complete the merger unless, among other things, we obtain the necessary government approvals and the stockholders of each of Community Bankers and BOE approve the merger proposal. Community Bankers must also complete its merger with TransCommunity prior to closing its merger with BOE. If Community Bankers does not complete its merger with TransCommunity by June 7, 2008, Community Bankers will be forced to dissolve and liquidate and will not be able to close the merger with BOE.

 

Reasons for the Merger (pages 53 and 54)

 

Community Bankers.  In reaching its decision to approve the merger agreement and recommend the merger to its stockholders, the Community Bankers board of directors reviewed various financial data and due

diligence and evaluation materials. In addition, in reaching its decision to approve the merger agreement, the board of directors considered a number of factors and believes that the non-exhaustive list of factors below strongly supports its determination to approve the merger agreement and recommendation that its stockholders adopt the merger agreement:

 

 

The board of directors of Community Bankers did not ascertain any negative factors related to the proposed merger with BOE other than the risk of the ability to successfully integrate BOE with TransCommunity and achieve the associated cost savings and efficiencies.

 

In addition, Community Bankers’ board knew and considered the financial interests of certain Community Bankers directors and executives when it approved the merger agreement. These financial interests are addressed in greater detail under the heading “The Merger — Certain Benefits of Directors and Officers of Community Bankers and BOE.”

 

BOE.  In reaching its decision to approve the merger agreement and recommend the merger to its stockholders, the BOE board of directors consulted with BOE management, as well as with its outside financial and legal advisors, reviewed various financial data, due diligence and evaluation materials, and made an independent determination that the proposed merger with Community Bankers was in the best interests of BOE and its stockholders. The board of directors considered a number of positive factors that it believes support its recommendation that BOE’s stockholders approve the merger agreement, including:

 

 

 

The BOE board also considered the risks and potentially negative factors outlined below, but concluded that the anticipated benefits of combining with Community Bankers were likely to outweigh substantially these risks and factors. The risks and factors included:

 

 

BOE’s board of directors knew and considered the financial interests of certain BOE directors and executives when it approved the merger agreement. These financial interests are addressed in greater detail under the heading “The Merger — Certain Benefits of Directors and Officers of Community Bankers and BOE.”

 

Regulatory Approvals (page 75)

 

We cannot complete the merger unless we obtain the approval of the Federal Reserve and the Bureau of Financial Institutions of the Virginia State Corporation Commission. Community Bankers filed applications with the Federal Reserve and the Bureau of Financial Institutions of the Virginia State Corporation Commission on January 25, 2008. As of the date of this joint proxy statement/prospectus, we have not yet received the required regulatory approvals. Although we expect to obtain the necessary approvals in a timely manner, we cannot be certain when, or if, they will be received.

 

Community Bankers cannot complete the merger with TransCommunity unless Community Bankers obtains the approval of the Federal Reserve and the Bureau of Financial Institutions of the Virginia State Corporation Commission. Community Bankers filed applications for approval to merge with TransCommunity with the Federal Reserve and the Bureau of Financial Institutions of the Virginia State Corporation Commission on January 18, 2008. As of the date of this joint proxy statement/prospectus, we have not yet received the required regulatory approvals for the merger with TransCommunity. Although we expect to obtain the necessary approvals to merger with TransCommunity to in a timely manner, we cannot be certain when, or if, they will be received.

 

Community Bankers Special Meeting (page 39)

 

Community Bankers will hold its special meeting of stockholders on April 25, 2008, at 2:00 p.m., local time, at the offices of Nelson Mullins Riley & Scarborough LLP, 101 Constitution Avenue, N.W., Suite 900, Washington, D.C. 20001. At the special meeting, Community Bankers’ stockholders will be asked to vote to approve the merger proposal, adopt the amendment to the certificate of incorporation and authorize the board of directors to adjourn the special meeting to allow time for further solicitation of proxies in the event there are insufficient votes present in person or represented by proxy at the special meeting to approve the proposals.

 

Community Bankers Stockholders’ Meeting Record Date and Voting (page 39)

 

If you owned shares of Community Bankers common stock at the close of business on March 25, 2008, Community Bankers’ record date, you are entitled to vote at the special meeting. On the record date, there were 9,375,000 shares of Community Bankers stock outstanding. You will have one vote at the meeting for each share of Community Bankers stock you owned on the record date.

 

Adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Community Bankers common stock entitled to vote at the special meeting. Adoption of the amendment to the certificate of incorporation of Community Bankers, requires the affirmative vote of a majority of Community Bankers outstanding stock entitled to vote at the special meeting. Authorization for the board of directors to adjourn the special meeting until a later date requires the affirmative vote of the holders of a majority of the shares of Community Bankers common stock present in person or represented by proxy and entitled to vote at the special meeting, whether or not a quorum is present. As of March 25, 2008, Community Bankers’ current directors, executive officers, and their affiliates beneficially owned approximately 10.8% of the outstanding shares of Community Bankers common stock. All of Community Bankers’ directors and executive officers have indicated they will vote in favor of the merger and each of the other proposals to be considered at the special meeting.

 

The Board of Directors of Community Bankers Recommends Stockholder Approval (page 42)

 

The board of directors of Community Bankers has unanimously approved each of the proposals to be brought before the special meeting, believes that the merger, the adoption of the amendment to the certificate of incorporation, and authorizing the board of directors to adjourn the special meeting are each in the best interest of Community Bankers and its stockholders, and recommends that the Community Bankers stockholders vote “FOR” approval of each of the proposals.

 

The Financial Advisor for Community Bankers Believes the Merger Proposal Consideration is Fair to Community Bankers (page 55)

 

Keefe, Bruyette & Woods, Inc. has served as financial advisor to Community Bankers in connection with the merger proposal and has given an opinion to the Community Bankers board of directors that, as of December 13, 2007, the consideration Community Bankers will pay for the BOE common stock is fair to Community Bankers from a financial point of view. A copy of the opinion delivered by Keefe, Bruyette & Woods, Inc. is attached to this joint proxy statement/prospectus as Appendix C. Community Bankers’ stockholders should read the opinion completely to understand the assumptions made, matters considered, and limitations of the review undertaken by Keefe, Bruyette & Woods, Inc. in providing its opinion.

 

BOE’s Special Meeting (page 42)

 

BOE will hold its special meeting of stockholders on April 25, 2008, at 10:00 a.m., local time, at the Tappahannock - Essex Volunteer Fire Department meeting hall at 620 Airport Road, Tappahannock, Virginia 22560. At the special meeting, BOE’s stockholders will be asked to vote to approve the merger proposal and the proposal to authorize the board of directors to adjourn the special meeting to allow time for further solicitation of proxies in the event there are insufficient votes at the special meeting, represented in person or by proxy, to approve the merger proposal.

 

BOE Stockholders’ Meeting Record Date and Voting (page 42)

 

If you owned shares of BOE common stock at the close of business on March 25, 2008, the BOE record date, you are entitled to vote on the merger proposal. On the record date, there were 1,213,044 shares of BOE stock outstanding. You will have one vote at the meeting for each share of BOE stock you owned on the record date. Approval of the merger proposal requires approval by more than two-thirds of all votes entitled to be cast by the holders of BOE common stock. Approval of the proposal to authorize the board of directors to adjourn the special meeting until a later date requires the votes cast favoring the action to exceed the votes cast opposing the action, whether or not a quorum is present. As of March 25, 2008, BOE’s current directors, executive officers, and their affiliates beneficially owned approximately 5.3% of the outstanding shares of BOE common stock. Each of BOE directors and executive officers has agreed, subject to several conditions, to vote his or her shares of BOE common stock in favor of the merger proposal.

 

The Board of Directors of BOE Recommends Stockholder Approval (page 44)

 

The board of directors of BOE has unanimously approved the merger proposal, believes that the merger proposal is in the best interest of BOE and its stockholders, and recommends that the BOE stockholders vote “FOR” approval of the merger proposal.

 

The Financial Advisor for BOE Believes the Merger Proposal Consideration is Fair to BOE’s Stockholders (page 62)

 

Feldman Financial Advisors, Inc. has served as financial advisor to BOE in connection with the merger proposal and has given an opinion to the BOE board of directors that, as of December 13, 2007, the consideration to be received in the transaction was fair, from a financial point of view, to BOE’s stockholders. A copy of the opinion delivered by Feldman Financial Advisors, Inc. is attached to this joint proxy statement/prospectus as Appendix D. BOE’s stockholders should read the opinion completely to understand the assumptions made, matters considered, and limitations of the review undertaken by Feldman Financial Advisors, Inc. in providing its opinion.

 

Certain Benefits of Directors and Officers of Community Bankers (page 70)

 

When considering the recommendations of the Community Bankers board of directors, you should be aware that some directors and officers have interests in the merger proposal that differ from the interests of other stockholders:

 

 

 

Each board member was aware of these and other interests and considered them before approving and adopting the merger proposal.

 

Certain Benefits of Directors and Officers of BOE (page 70)

 

When considering the recommendations of the BOE board of directors, you should be aware that some directors and officers have interests in the merger proposal that differ from the interests of other stockholders, including the following:

 

 

Each board member was aware of these and other interests and considered them before approving and adopting the merger proposal.

 

Federal Income Tax Consequences (page 69)

 

We have structured the merger so that it will be considered a reorganization for United States federal income tax purposes. If the merger is a reorganization for United States federal income tax purposes, BOE’s stockholders generally will not recognize any gain or loss on the exchange of shares of BOE common stock for shares of Community Bankers common stock. Any gain or loss which is recognized will be a capital gain or loss, provided that such shares were held as capital assets of the BOE stockholder at the effective time of the merger.

 

Determining the actual tax consequences of the merger to a BOE stockholder may be complex. These tax consequences will depend on each stockholder’s specific situation and on factors not within our control. BOE’s stockholders should consult their own tax advisors for a full understanding of the tax consequences of their participation in the merger.

 

Comparative Rights of Stockholders (page 192)

 

The rights of Community Bankers stockholders are currently governed by Delaware corporate law and Community Bankers’ certificate of incorporation and bylaws. The rights of BOE’s stockholders are currently governed by Virginia corporate law and BOE’s articles of incorporation and bylaws. Upon consummation of the merger, the stockholders of BOE will become stockholders of Community Bankers and the certificate of incorporation, as proposed to be further amended and restated, and bylaws of Community Bankers and

Delaware law will govern their rights. Community Bankers’ certificate of incorporation and bylaws differ somewhat from the articles of incorporation and bylaws of BOE. Material differences include:

 

 

Termination of the Merger Agreement (page 76)

 

Notwithstanding the approval of the merger proposal by Community Bankers and BOE stockholders, Community Bankers and BOE can mutually agree at any time to terminate the merger agreement before completing the merger.

 

Either Community Bankers or BOE can also terminate the merger agreement:

 

 

Stock Ownership of Existing Community Bankers, TransCommunity and BOE Stockholders After the Merger (page 81)

 

The table below outlines the effect of the various scenarios on the percentage of Community Bankers’ voting interests that existing Community Bankers, TransCommunity and BOE stockholders will own after the merger with BOE is completed, based on the number of shares of each of Community Bankers, TransCommunity and BOE issued and outstanding as of the date of their respective merger agreements. Depending on the scenario, Community Bankers’ stockholders will own from 36.93% to 57.13% of Community Bankers’ voting interests after the merger, TransCommunity stockholders will own from 20.76% to 30.54% of Community Bankers’ voting interests after the merger and BOE stockholders will own from 22.11% to 32.53% of Community Bankers’ voting interests after the merger. The table assumes that none of the TransCommunity stockholders exercised appraisal rights in Community Bankers’ merger with TransCommunity and that Community Bankers’ existing stockholders continue to own the warrants to be exercised. The unit purchase option refers to the unit purchase option to purchase 525,000 units (each unit comprised of one share of common stock and one warrant to purchase one share of common stock) held by I-Bankers Securities, Inc., Maxim Group LLC and Legend Merchant Group, Inc., the representatives of the underwriters in Community Bankers’ initial public offering.

 

 

 

X-denotes that event occurred

 

The Merger is Expected to Occur in the Second Quarter of 2008 (page 45)

 

The merger will occur shortly after all of the conditions to its completion have been satisfied or waived. Currently, we anticipate that the merger will occur in the second quarter of 2008. However, we cannot assure you when or if the merger will occur. We must first obtain the approval of the Community Bankers’ stockholders and BOE’s stockholders at their respective special meetings and all the necessary regulatory approvals. In addition, Community Bankers must complete its merger with TransCommunity prior to closing its merger with BOE. If Community Bankers does not complete its merger with TransCommunity by June 7, 2008, Community Bankers will be forced to dissolve and liquidate and will not be able to close the merger with BOE.

 

Accounting Treatment (page 82)

 

The merger will be accounted for using the purchase method of accounting, with Community Bankers being treated as the acquiring entity for accounting purposes. Under the purchase method of accounting, the assets and liabilities of BOE as of the effective time of the merger will be recorded at their respective fair values and added to those of Community Bankers.

 

Completion of the Merger is Subject to Certain Conditions (page 74)

 

Completion of the merger is subject to a number of conditions, including the approval of the merger proposal by the Community Bankers and BOE stockholders and the receipt of all the regulatory consents and approvals that are necessary to permit the completion of the merger and the completion of the merger with TransCommunity. Certain conditions to the merger may be waived by Community Bankers or BOE, as applicable; however, the merger with TransCommunity must be completed by June 7, 2008, or Community Bankers will be forced to dissolve and liquidate and will not be able to close the merger with BOE.

 

Comparative Market Value of Securities (page 200)

 

The following table sets forth the closing price per share of Community Bankers common stock and the closing price per share of BOE common stock on December 13, 2007 (the last business day preceding the public announcement of the merger) and March 25, 2008 (the most recent practicable trading date prior to the mailing this joint proxy statement/prospectus). The table also presents the equivalent market value per share of BOE common stock based on the exchange ratio of 5.7278 shares of Community Bankers common stock for each share of BOE common stock. In the event the average of the daily closing prices of Community Bankers common stock as reported on the American Stock Exchange for the 20 consecutive full trading days ending on the fifth day before the anticipated closing date of the merger is less than $7.42, the exchange ratio will be increased to equal the quotient obtained by dividing $42.50 by the average of the daily closing prices during those 20 consecutive full trading days, rounded to the nearest one-ten thousandth. You are urged to obtain current market quotations for shares of Community Bankers and BOE common stock before making a decision with respect to the merger. Community Bankers common stock is listed on the American Stock Exchange under the symbol “BTC,” and BOE common stock is quoted on the Nasdaq Capital Market under the symbol “BSXT.”

 

 

 

 

Because the market price of Community Bankers common stock is subject to fluctuation, the market value of the shares of Community Bankers common stock that you may receive in the merger may increase or decrease prior to and following the merger. You are urged to obtain current market quotations for Community Bankers common stock.