OTTAWA, Ill., March 20, 2024 (GLOBE NEWSWIRE) -- Ottawa Bancorp, Inc. (the “Company”) (OTCQX: OTTW), the holding company for OSB Community Bank (the “Bank”), announced today that the Company has appointed Mark D. Alcott to the Company’s and the Bank’s Boards of Directors pursuant to the terms of a standstill agreement (the “Agreement”) entered into with Stilwell Activist Fund, L.P., Stilwell Activist Investments, L.P., Stilwell Partners, L.P., Stilwell Value LLC, and Joseph Stilwell (collectively, the “Stilwell Group”).
Under the terms of the Agreement, which will remain in effect until the completion of the Company’s 2026 Annual Meeting of Stockholders unless terminated earlier in accordance with its terms, the Company has agreed to, among other things, appoint Mr. Alcott to the Boards of Directors of the Company and the Bank, in the class of directors expiring at the Company’s 2026 Annual Meeting of Stockholders and similar class of the Bank board. In the event Mr. Alcott is unable to serve as a director of the Company and Bank, the Company and Bank will appoint a replacement director chosen by the Stilwell Group. Under the Agreement, provided that the Board of Directors determines that such action is consistent with its fiduciary duties, the Company will use commercially reasonable best efforts to repurchase, subject to the receipt of any required regulatory approvals and/or non-objections, at least five percent of the Company’s common stock annually for each of fiscal year 2024 and 2025. If the Company is unable to repurchase, for any reason, at least five percent of the then outstanding shares of Company common stock annually for either fiscal year 2024 or 2025, the Company will, promptly after the conclusion of that fiscal year, engage an investment banker to assist the Company’s Board of Directors in evaluating all reasonable alternatives for maximizing the value of the Company’s common stock.
The Stilwell Group is the beneficial owner of 353,529 shares, or 13.9%, of the Company’s common stock. Prior to entering into the Agreement, the Stilwell Group had received regulatory approval to purchase up to 19.99% of the Company’s outstanding shares of common stock. During the term of the Agreement, the Stilwell Group will not, among other things: acquire additional shares of the Company’s common stock, sell or transfer Company common stock to a five percent holder or a party that upon such transfer would become a five percent holder; propose or seek to effect a sale, merger, recapitalization of reorganization or any other transaction that would constitute a change in control of the Company (a “Company Transaction”); publicly suggest that the Company should engage in a Company Transaction; seek to exercise any control or influence over the management of the Company or the Boards of Directors of the Company or the Bank; present to the Company, its stockholders or any third party any Company Transaction or give encouragement to propose a Company Transaction; solicit proxies in opposition to any recommendations or proposals of the Company’s Board of Directors or become a participant in any such proxy solicitation; submit or encourage the submission of any nomination for election as a director of the Company or any stockholder proposal for business at a meeting of the Company’s stockholders; join or participate in any agreement to act in concert with any other person holding Company common stock; join with or assist or make any statement in opposition with respect to any nominee to the Company’s Board of Directors nominated by the Company’s Board of Directors or join with or assist in supporting or endorsing any other nominee or any stockholder proposal that is opposed by the Board of Directors; vote for any nominee that has not been nominated by the Company’s Board of Directors; except in connection with the enforcement of the Agreement, initiate or participate in any litigation against the Company, Bank or its officers and directors, including any derivative action; advise, encourage or finance any activities which would circumvent the limitations of the Agreement; or request to be excused from the terms of the Agreement or publicly disclose any such intention. Mr. Alcott has agreed to similar restrictions under the Agreement, but may acquire shares of Company common stock.
“We have been looking to add experienced members to serve on our Boards, particularly following several retirements from the Board. The Stilwell Group had previously submitted a notice of intent to nominate Mr. Alcott to the Company’s Board. After meeting with Mr. Alcott and discussing, among many things, his perspective on board service and prior bank board service, we are pleased to welcome him as a representative of our largest investor,” said Craig Hepner, President and Chief Executive Officer of the Company. Mr. Hepner continued, “As we have indicated previously, the Board remains committed to implementing capital management strategies to maximize stockholder value when possible. The Agreement we have entered into with the Stilwell Group is consistent with this strategy, and we intend to pursue the necessary approvals to execute share repurchase programs contemplated by the terms of the Agreement. However, as we have also explained, the ability to implement capital management strategies is dependent on a variety of factors, including the Bank’s ability to dividend sufficient funds to the Company to fund them, and the requisite receipt of required regulatory approval or non-objection to do so. The lower earnings and tighter liquidity that we have experienced in recent periods have limited the Bank’s ability to upstream funds to the Company. We continue to act on our strategies to improve earnings, liquidity and funding costs and with the goal of being in position to execute additional capital management strategies as soon as possible.” Mark Alcott stated, “I look forward to working with my new colleagues at the Company for the benefit of all stockholders.”
About Ottawa Bancorp, Inc.
Ottawa Bancorp, Inc. is the holding company for OSB Community Bank which provides various financial services to individual and corporate customers in the United States. The Bank offers various deposit accounts, including checking, money market, regular savings, club savings, certificates of deposit and various retirement accounts. Its loan portfolio includes one-to-four family residential mortgage, multi-family and non-residential real estate, commercial and construction loans as well as auto loans and home equity lines of credit. OSB Community Bank was founded in 1871 and is headquartered in Ottawa, Illinois. For more information about the Company and the Bank, please visit www.myosb.bank.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results. These forward-looking statements, identified by words such as “will,” “expected,” “believe,” and “prospects,” involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. These risks and uncertainties involve general economic trends and changes in interest rates, increased competition, changes in consumer demand for financial services, the possibility of unforeseen events affecting the industry generally, the uncertainties associated with newly developed or acquired operations, market disruptions, our ability to pay future dividends and if so at what level, our ability to receive any required regulatory approval or non-objection for the payment of dividends from the Bank to the Company or from the Company to stockholders, and our efforts to maximize stockholder value, including our ability to execute any capital management strategies, such as the repurchase of shares of the Company’s common stock, and our ability to execute any controlled growth and balance sheet strategies designed to lower the cost of funds and enhance earnings and liquidity. Ottawa Bancorp, Inc. undertakes no obligation to release revisions to these forward-looking statements publicly to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under applicable law.
