Vineyard Bank to voluntarily comply with consent order; shareholders weigh in

By Lisa Kerner

Charlotte, N.C., July 28 - Vineyard National Bancorp subsidiary Vineyard Bank, NA, at the request of the Office of the Comptroller of the Currency, voluntarily agreed to the issuance of a consent order establishing timeframes for the completion of remedial measures identified as part of the company's risk mitigation action plan.

The company said it agreed to:

• Establish a committee to monitor compliance with the consent order;

• Identify individuals to serve on a permanent, full-time basis as chief executive officer and chief credit officer;

• Maintain capital ratios above the statutory minimums;

• Develop and implement a three-year capital program; and

• Make other organizational, financial, operational and compliance procedural changes to strengthen Vineyard.

"We believe that the remedial measures agreed upon with the OCC are in alignment with the important remedial measures previously developed and independently implemented by the company to address asset quality deterioration and enterprise risk management," interim CEO James LeSieur stated in a company news release.

LeSieur added that Vineyard is "well equipped" to meet the schedule and requirements of the consent order.

In response to Vineyard's announcement, shareholders Jon Salmanson and Norman Morales said they are continuing to solicit proxies for the election of Thomas Koss II, Douglas Kratz, Cynthia Harriss, Norman Morales, Harice "Dev" Ogle, Lester Strong and Glen Terry to the company's board of directors.

Salmanson and Morales noted that RiskMetrics/Institutional Shareholder Services, Glass Lewis & Co. and Proxy Governance, Inc. recommended the withholding of all votes for the company's current board of director candidates.

"These are difficult times for the financial institution industry, and we need a board that will aggressively take actions to address the current environment," Morales said in a statement released on Monday.

Morales and Salmanson said they have developed a capital-restoration plan that would provide Vineyard "with a significant level of regulatory capital well in excess of current requirements to provide a firm and stabile basis of strength during these difficult times, liquidity and flexibility for its operations."

Vineyard National is the holding company for Vineyard Bank located in Corona, Calif.

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