Preferred stock

The Corporation is authorized to issue perpetual preferred stock in one or more series, with no par value. Shares of preferred stock have preference over the Corporation’s common stock with respect to the payment of dividends and liquidation rights. Different series of preferred stock may have different stated or liquidation values as well as different rates. Dividends are paid annually.

Set forth below is a summary of the Corporation’s preferred stock issued and outstanding.



							December 31,
	Year Issued	Dividend Rate		Stated Value		Number of Shares	2011		2010
Series A	1996	6.00	%	$	25,000	8	$	200,000	$	200,000
Series C	1996	8.00		250		108	27,000		27,000
Series D	1997	6.50		250		3,280	820,000		820,000
Series E	2005	6.00		50,000		28	1,400,000		1,400,000
Series F	2005	8.53		7,000,000		7,000	6,790,000		6,790,000
Series E	2006	6.00		50,000		21	1,050,000		1,050,000
Series G	2009	5.00		9,439,000		9,439	10,504,000		9,990,000
							$	20,791,000	$	20,277,000

Series C and D shares are redeemable at any time at par value, while Series A shares are redeemable at par value plus a premium payable in the event of a change of control.

Each Series E share is convertible at any time into 333 shares of common stock of the Corporation, and are redeemable any time by the Corporation after 2008 at liquidation value. The Series F shares are redeemable after 2011 by the Corporation at a declining premium until 2020, at which time the shares are redeemable at par.

On April 10, 2009, the Corporation issued 9,439 shares of fixed-rate cumulative perpetual preferred stock to the U.S. Department of Treasury. These shares pay cumulative dividends at a rate of five percent per annum until the fifth anniversary of the date of issuance, after which the rate increases to nine percent per annum. Dividends are paid quarterly in arrears and unpaid dividends are accrued over the period the preferred shares are outstanding.

In 2011, City National Bancshares Corporation deferred the payment of its regular quarterly cash dividend on its Series G fixed-rate cumulative perpetual preferred stock issued to the U.S. Treasury in connection with the Corporation’s participation in the Treasury’s TARP Capital Purchase Program. In addition, the Corporation in 2011 deferred its regularly scheduled quarterly interest payment on its junior subordinated debentures issued by the City National Bank of New Jersey Capital Statutory Trust II (the “Trust”).

The Series G preferred stock and the junior subordinated debentures issued in favor of the Trust provide for cumulative dividends and interest, respectively. Accordingly, the Corporation may not pay dividends on any of its common or preferred stock until the dividends on Series G preferred stock and the interest on such debentures are paid-up currently. There were no dividend payments made on preferred stock during 2011, although such dividends have been accrued because they are cumulative.

On May 1, 2009, the Corporation paid a cash dividend of $2.00 per share to common stockholders, while no dividend has since been paid to common shareholders. The Corporation is currently unable to determine when dividend payments may be resumed and does not expect to pay a common stock dividend in 2012. Whether cash dividends will be paid in the future depends upon various factors, including the earnings and financial condition of the Bank and the Corporation at the time. Additionally, federal and state laws and regulations contain restrictions on the ability of the Bank and the Corporation to pay dividends.