Vineyard National Bancorp in Corona, Calif., is urging shareholders to oppose a bid by Vineyard's former chief executive to win seats on the company's board for a slate of directors.
Norman Morales, who resigned as CEO of the $2.5 billion-asset company on Jan. 24, and an ally, Jon Salmanson, informed Vineyard's board last month that they intend to nominate an alternative slate of directors, led by Mr. Morales, at Vineyard's annual shareholder meeting in May. However, they must first succeed in changing Vineyard's bylaws, and in a Securities and Exchange Commission filing Monday, Vineyard's board said it is advising shareholders to vote against the bylaw change, arguing that it would lead to disruption.
The current bylaws set the deadline for shareholders to nominate board candidates at five months before the annual meeting.
Vineyard reported a $41.3 million fourth-quarter loss. The bulk of the loss resulted from a $40.8 million goodwill writedown, but the company, whose loan portfolio is concentrated in construction and real estate credits, also took a $9.2 million provision for losses on its residential construction loans.
In the filing, Vineyard's board said it adopted a strategy to address the loss, including the reduction of its residential construction and land development portfolio, an expansion of commercial and industrial lending, and increases in core deposits.
