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Driver Management calls on Community Bankers Trust to initiate sale process

Activist investor Driver Management Co. LLC is urging shareholders of Richmond, Va.-based Community Bankers Trust Corp. to join its call for the company to sell itself to "one of the many logical acquirers in the marketplace."

In an open letter to shareholders of Essex Bank's parent company, Driver Management said it is concerned about Community Bankers Trust's stand-alone prospects, with the company facing "significant challenges," compounded by an "extremely competitive environment," when it comes to lowering deposit costs, prudently growing loans, continuing to rationalize costs and sustaining long-run profitability.

Driver Management is calling on the company's board to "immediately hire experienced investment bankers to initiate and run a sale process." The activist investor believes that the company can get a "significant premium to its current market value" now by selling and said it is "dismayed" that the actions of Community Bankers Trust CEO Rex Smith may have deterred potential suitors.

"It appears to us that Mr. Smith has maintained unrealistic sale price expectations and has conditioned potential transactions on remaining a fixture in the upmost levels of senior management at any combined company," according to Driver Management's letter. The activist investor believes a value-maximizing sale can be reached "expeditiously" if Smith is not an "impediment" and the company's board is able to explore all options "without being colored and influenced by a conflicted gatekeeper."

Driver Management noted in the letter that it has expressed its concerns to John Watkins, Community Bankers Trust's chairman, but has only received "perfunctory and formulaic responses." The activist investor said it intends to continue engaging with the company's board about "the importance of objectively assessing a sale and putting the best interests of shareholders first."