The ousted chief executive of Corona’s Vineyard National Bancorp is looking to mount a proxy battle in a bid to get his job back and possibly bring the bank’s headquarters to Orange County.
Norman Morales, who left as Vineyard’s chief executive in January but remains its largest individual shareholder, has made a Securities and Exchange Commission filing as part of a bid to nominate a slate of directors to the bank’s seven-member board.
Regulators still need to sign off on a solicitation that would go out to shareholders seeking their support for nominating a slate of directors. The move could give Morales more say in the direction of the company.
Morales is looking to change the company’s bylaws to extend the deadline for nominating director candidates for Vineyard’s annual meeting in May. Vineyard’s current bylaws have a December deadline for the nominations.
Vineyard is a regional business bank with $2.5 billion in assets. The company has focused on lending to homebuilders, which has hurt Vineyard recently.
The company’s shares are down nearly 60% in the past six months with a recent market value of $85 million.
Analysts who follow Vineyard have said Morales likely was forced out after a disagreement with directors.
He filed his bid to nominate directors along with longtime stockholder Jon Salmanson. Together, they own 4.1% of the company.
“Our intent is to assist in the restoration of shareholder value which has eroded over the past few months,” said Salmanson, who manages more than $100 million as a stockbroker for Northeast Securities in New York.
A bid to nominate directors and a possible proxy battle could hinge on getting support from Vineyard’s institutional investors. None has a dominant stake. Troy, Mich.-based NorthPointe Capital LLC is the largest at about 7.6%
Morales and Salmanson said in their filing they’re allied with other shareholders who have become “increasingly concerned with the governance of the company.”
Changing the board could open the door for Morales to get his job back. He was out of town and unavailable for comment.
“The correct course for the company is imbedded in the strategic plan, which I have communicated to the investment community,” Morales said in his filing.
In December, Morales said he wanted to make OC the focus of Vineyard’s growth as it shifted from its core Inland Empire business.
Sources familiar with Morales’s strategy said it involves moving the bank’s headquarters to OC, where he and some Vineyard executives live.
Morales has been through a bank proxy battle before as executive vice president of Downey-based SC Bancorp, where in 1992 a group of investors ousted management. Morales stayed on after the change.
He was with SC Bancorp, the holding company for Southern California Bank, when it moved to Anaheim in 1994 and was sold to Western Bancorp of Laguna Niguel in 1997.
Vineyard’s chairman is James LeSieur III, the former chief executive of Tustin-based Sunwest Bank. He’s serving as Vineyard’s chief executive on an interim basis.
For the fourth quarter, Vineyard reported $41.3 million in losses related to its construction and real estate lending. Nearly all of the loss, $40.8 million, was from a writedown of goodwill.
To stem losses, Vineyard has quit its homebuilding lending business and is looking for ways out of other projects.
“Our aggressive risk mitigation tactics will restore the operations of Vineyard to previous levels with a much lower risk profile,” LeSieur said in a statement.
Twenty-six-year old Vineyard operates 16 branches in Los Angeles, Marin, Monterey, Orange, Riverside, San Bernardino, San Diego, Santa Clarita and Ventura counties.
