November 13, 2007 – Final liquidation payment made to Class A and B Stockholders: On November 13, 2007, the Bank paid out approximately $39.69 million to its Class A (Government) and Class B (Private) Stockholders as the final distribution to complete its liquidation. The final payment amount was approximately 4.435 cents per share . All stockholders that received a payment in November were sent a Form 1099-DIV reporting the amount of the payment during the month of January 2008.

February 11, 2008 - Final Meeting of Bank Board: A final meeting of the Bank's last Board of Directors was held to mark the completion of the dissolution of the Bank.

RTB Summary

On May 7, 1971, the Rural Telephone Bank (Bank) was established by amendment to the RE Act as a source of supplemental financing for telecommunications companies and cooperatives eligible to borrow under the RE Act's telephone loan program. A Board of Directors was appointed to manage the operations of the Bank and the employees of REA (now USDA Rural Development Utilities Programs) performed the Bank's day to day operations. By establishing a capital structure which provided for a mixed Federal and private ownership, the Bank was designed to assure rural telephone systems access to private sources of capital by establishing a supplemental credit mechanism to which borrower systems may turn for all or part of their future capital requirements. The capital structure of the Bank consists of three classes of stock: Class A, Class B, and Class C. Class A stock was issued by the Bank in exchange for approximately $600 million of capital provided by the taxpayers. This provided the Bank with its initial "seed" money to begin its lending operations. The Bank paid an annual dividend of two percent on Class A stock. Class B stock was purchased by recipients of Bank loans in an amount equal to five percent of the loan. Class B stock did not earn a cash dividend, but Bank borrowers acquired additional shares of Class B stock through patronage refunds. Class C stock was available for purchase by Bank borrowers, entities eligible to borrow from the Bank, and by organizations controlled by Bank borrowers. Class C stock was also acquired through the conversion of Class B stock after repayment of the loans associated with the Class B stock. Class C stock earned a cash dividend at a rate determined by the Board of Directors. In addition to providing for a mixed-ownership through the A, B, and C classes of stock, the RE Act amendment also provided that the ownership, control, and operation of the Bank be transferred to the Class B and C stockholders after 51 percent of the Class A stock was retired (known as privatization of the Bank). The retirement of Class A stock began in fiscal year 1996.

After years of discussion regarding the possible privatization of the Bank, in February 2005, President Bush’s FY2006 Budget proposed the dissolution of the Bank. After six months of discussion and deliberation, the Board of Directors unanimously approved resolutions to liquidate and dissolve the Bank on August 4, 2005. On November 10, 2005, the liquidation and dissolution process was initiated with the signing of the 2006 Agriculture Appropriations bill by President Bush, which contained a provision lifting the restriction on the retirement of more than 5 percent of the Class A stock held by the U.S. government. This paved the way for all Bank stock to be redeemed.

The liquidation and dissolution process is now largely complete. Stock redemption agreements were sent to over 92 percent of shareholders on January 10, 2006. The Government's Class A stock was redeemed on April 10, 2006; redemption payments to Class B and C shareholders began on April 11, 2006 and were completed by September 30, 2006. The final liquidation payments were made to Class A and B shareholders at the time of liquidation on November 13, 2007. The only action still to be taken is the completion of a final audit.