Vineyard National Bank Preferred (fka VNBAQ)

[pkripper]

I am out. just found this

On March 10, 2009 and March 31, 2009 the Company entered into amendments (the "Amendments") to the Purchase Agreement (as amended, the “Amended Purchase Agreement”). The Amendments extended the date by which both parties can terminate the Purchase Agreement for the failure to satisfy the financing condition to May 22, 2009. The first of the Amendments also reduced the minimum amount of stockholders' equity and loan loss reserve required at the Bank as a condition to the Buyer's obligation to consummate the transaction.

The closing of the proposed transaction is subject to the contingency that the Buyer receive a sufficient amount of financing (the “Financing”). As of the date of this filing, we have been advised that the Buyer has been unsuccessful in obtaining the necessary subscriptions to satisfy the Financing condition.

Due to the current economic environment for financial institutions, we do not believe that the Buyer will be able raise sufficient private capital necessary to satisfy the Financing condition. Under the “go-shop” provision of the Amended Purchase Agreement, the Company continues to solicit and will entertain competing offers for the sale of the Bank. However, at this time, no other viable transactions have materialized. Unless the economic environment for financial institutions improves or there are major changes in the bank regulatory system that make it more favorable to acquire troubled financial institutions, such as VNBC or the Bank, we believe that it is unlikely that another strategic alternative will materialize or that the Buyer will be able raise the necessary capital to consummate the Financing and satisfy the condition to closing. Even if a transaction is consummated, there will not be sufficient assets available to the unsecured creditors including holders of trust preferred securities and subordinated debentures, or the common and preferred shareholders of VNBC.

As noted above, we believe that it is unlikely that alternative financing is available in the current environment. As a result, we are not able to comply with the capital requirements contained in the Consent Order with the Office of the Comptroller of the Currency (the “OCC”) or the Written Agreement with the Federal Reserve. On May 1, 2009, we have received a further notice from the OCC that the Bank is “significantly undercapitalized” under the regulatory framework for prompt corrective action. This designation submits the Bank to increased regulatory oversight and requirements, and is likely to lead to the Bank being placed into receivership with the FDIC unless we are able to secure financing for the Bank.

In addition, in connection with extending the May 22, 2009 deadline under the Letter Agreement and the Amended Purchase Agreement, we extended the maturity date of the senior line of credit to May 22, 2009 and the Senior Lender waived certain events of default. If the proposed transaction does not close before May 22, 2009, the Senior Lender could take action to foreclose on the Bank’s stock.

http://pinksheets.com/edgar/GetFilingHtml?FilingID=6613274