When most banks run into trouble, they look for safety in the arms of acquirers. Not Essex Bancorp.

The Virginia Beach thrift is trying to save itself by becoming an acquirer. In a highly unusual deal announced this week, Essex plans to buy Home Bancorp of Norfolk for $22 million.

The maneuver would allow Essex to count Home's capital as its own. And Essex would pay in preferred stock and warrants - not cold cash. There is a tradeoff, however: In three years when the warrants are exercisable, Home stockholders would gain control of Essex.

Some observers see the deal as a daring and innovative way to raise emergency capital. But others are dismissing it as a desperate measure that would only delay the company's inevitable extinction.

"It's a creative solution," said Ronald R. Glancz, a partner in the Washington law firm of Venable, Baetjer, Howard & Civiletti. Acquiring Home "not only saves Essex but creates a new institution that is much more viable than before. The sum may be better than the parts."

The troubled $293 million-asset company had until last Friday to raise at least $3 million of capital in order to stave off seizure by regulators.

On Monday it announced the surprising news that rather than throwing up its hands in defeat - having failed earlier this year in both public and private rights offerings - it had signed a definitive agreement to acquire the neighboring $60 million-asset Home Bancorp.

Mr. Glancz and other merger and acquisition lawyers cautioned, however, that Essex's biggest hurdle still lies ahead - obtaining regulatory approval for the deal.

"The odds are not in their favor," said a lawyer who asked not to be identified because of his firm's past work for Essex. The plan "backs the regulators off for a week or so, but clearly this was a last-minute, cobbled-together transaction, and regulators will question its sincerity."

Essex, which operates eight branches in Virginia and North Carolina under the name Essex Savings Bank, has been struggling for several years to turn the corner after suffering huge losses in the early 1990s.

Its latest problem, significantly deficient core and risk-based capital ratios, forced it under the supervision of the Office of Thrift Supervision in April. Unable to raise the necessary capital through traditional avenues, Essex has proposed buying Home Bancorp essentially by borrowing money from it.

Essex would issue Home $15 million in preferred stock, paying annual dividends of 8% to 9.5%.

More interesting to observers, Essex has also offered warrants to Home Bancorp to purchase 7.9 million shares of Essex common stock, exercisable in three years.

This stock would give closely held Home Bancorp's small group of shareholders a clear majority ownership of Essex, at a remarkably low price. Essex currently has slightly more than one million shares of common stock outstanding.

The result would make Essex, in effect, the acquiree rather than the acquirer.

"Some deals are billed as acquisitions when in fact they are really sales," said William J. Sweet, a partner at Skadden, Arps, Slate, Meagher & Flom in New York, who was speaking generally of such transactions. "The final name of an institution is really not that important."

As to why Home Bancorp would want to merge with the nearly insolvent Essex, observers said the deal constitutes a high-risk gamble for Home's shareholders.

Such a deal, which would likely never be approved if Home were owned by common stockholders, could pay off handsomely if Essex does in fact begin to generate earnings in the coming years.

"Home may think that Essex's management may be worth investing in," said the lawyer who wished not to be named. "Plus, if Home is getting a nice premium, then it makes them more willing to get into a high-risk transaction."

On this point, the chairman of Home Bancorp, Charles B. Whitehurst, said only, "Our due diligence showed that the company will be fine."

Essex's chief executive, Gene D. Ross, who took over the company three years ago to turn it around, could not be reached for comment.

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