Albina Community Bancorp (ACBCQ)

[56Chevy]

UNBELIEVABLE!

ACBC sent out a shareholder letter yesterday which Joeysco forward on to me last night. It said;

As a shareholder of the company, you know that our wholly owned subsidiary, Albina Community Bank, has been operating under a "Consent Agreement" executed between the bank and the FDIC in March 2011. The Consent Agreement required, among other hings, that the bank raise sufficient capital to increase it's capital ratios to acceptable levels within 120 days of entry into the Consent Agreement or face having the FDIC ate over ownership and control of the bank.

Over the last 2 years, the bank, with he Company's support, met with a long list of potential and interested investors and considered all alternatives for raising capital at he holding company level, including a sale of Bancorp and/or bank. As a result of, among other things, the significant Trust Preferred debt of Bancorp, we were unable to secure an investor at the holding company level.

On October 11, 2013, the bank sucessfully completed the sale of new commn equity in the amount of $8.75 million to One PacifcCoast Bancorp, Inc. of San Francisco, CA. The investment resulted in the Foundation acquiring 90.1% of the total outstanding equity of the bank and the dilution of Bancorp's ownership interest in the bank to 9.9%. In the end, the Bank has an appraisal of the value of this issuance and received a "Fairness Opinion" to assist the existing shareholders in their understanding of why this transaction was fair and in their best interests.

This transaction preserved the continued viability of the bank, but it did not provide any new cash to the Bancorp. We continue to have approximately $6 million of outstanding Trust Preferred debt that does not mature until late 2014 and on a consolidated basis have had a negative net worth of approximately $2.2 million. In addition, we have preferred stock that would need to be redeemed before the common shareholders would realize anything in a liquidation event, so we are not optimistic that the preferred or common shareholders will receive a cash return in the event we are able to sell our remaining 9.9% interest in the bank.

This proxy statement includes the notice of an Annual Meeting of Shareholders, at which meeting we will, among other things, seek your approval to reduce the size of the Bancorp Board to reflect the reduced level of work for the board under this new capital base. We are saddened by this outcome but are thrilled that we were able to assure the survival of Albina Bank as it will now be a bigger and stronger community bank serving the needs of this great area.

What does this mean? It means OnePacificCoast didn't buy 90.1% of Albina Community Bancorp [ACBC]..they bought 90.1% of Albina Bank. Period! Owning stock in a bank is not the same thing as owning stock in its holding company. OnePacificCoast doesn't own one share of ACBC the Holding company...and what they're telling shareholders in this last shareholder letter is Albina Bank Holding Company is for all practical purposes bankrupt. I don't know how else to say it.

1 12 U.S.C. § 1842.
2 OnePac Bancorp would directly acquire newly issued shares of Albina Bank, representing 90.1 percent of the latter’s common stock. Under the proposal, Albina Bank’s current parent, Albina Community Bancorp (“Albina Bancorp”), Portland, would retain 9.9 percent of the common stock of Albina Bank.

http://www.federalreserve.gov/newsevents/press/orders/orders20130926a1.pdf

*I'm stunned. I knew there were large pieces to the ACBC / OPCB puzzle missing and that always bugged the crap out of me because something just didn't add up BUT I never suspected this is what they were doing. In my mind this is clear cut case of fraudulent conveyance...but it was all done with the blessings of the regulators...so how could it be?? I don't know what to say..I'm sorry for getting this wrong if I did. This was a very smart but tricky way to go about acquiring an asset without the debt....too bad they didn't spell this out from day 1 in terms the average shareholder would understand.

I'd like to hear from others on this.