The cash-strapped Vineyard National Bancorp in Corona, Calif., is under orders to stop paying dividends to shareholders without approval from its regulator, the Federal Reserve Bank of San Francisco.
In an enforcement order released Thursday, the $2.4 billion-asset Vineyard also agreed to submit a plan to regulators on how it will build sufficient capital.
At the end of June its Tier 1 capital ratio was 1.52%, and its leverage capital was 1.43%, both well below regulatory minimums. Its Vineyard Bank is considered to be adequately capitalized.
In July the Office of the Comptroller of the Currency issued a consent order requiring Vineyard Bank to raise capital and appoint "experienced and competent" officers, among other things.
On Friday, Vineyard National said it had promoted vice chairman Glen C. Terry to president and chief executive officer of the bank and the holding company. It also announced plans to raise $250 million in a private placement of common stock and convertible senior secured notes.
Vineyard National lost $62.5 million in the second quarter after taking a $20.3 million provision for its deferred tax asset and a $40.5 million provision for losses on residential construction loans.