Vineyard National Bancorp board candidate buys 10% of company

     The opponents vying for control over Vineyard National Bancorp won't come head to head this month, but in the meantime, they're fortifying their positions.
     They only agree on one thing: to nominate Douglas Kratz to the Corona company's board of directors at the Aug. 5 shareholder meeting.
     Through investor group One Investments LLC, Kratz bought almost 10 percent of Vineyard's stock in late June for about $6.3 million, according to documents filed on Monday with the Securities Exchange Commission.
     Kratz is chairman and CEO of Opportunity Bancshares Inc., an investment bank in Bettendorf, Iowa.
     Former CEO Norman Morales -- who was forced by Vineyard to resign in January -- and investor Jon Salmanson, who is embedded with Morales, joined Kratz in the $6.3 million stock purchase.
     Now all eyes are on the August shareholder meeting, where Morales and Salmanson are expected to nominate their hand-picked candidates for Vineyard's board of directors. Both Vineyard and the Morales-Salmanson team support nominating Kratz.
     Morales is trying to gain control of the bank, which reported a loss of $13.3 million in its first quarter and also said it has $142 million in "substandard loans" from 2007 on its books.
     Vineyard's losses stem from the risky loans it made to local home builders during the housing boom.
     Now its looking for a major capital infusion to satisfy regulatory requirements. The bank was designated to be in a "troubled condition" in May by the Federal Reserve Board and Office of Comptroller of the Currency in Washington, D.C.
     B.U. Patel, an Orange County hotel mogul, purchased 600,000 shares of Vineyard stock in late May -- 5 percent of the company's stock.
     Salmanson and Morales have argued for a "transition plan" instead of waiting to resolve issues at the August meeting, but Vineyard's executives won't have any of it.
     Any board-of-director candidate nominations will have to pass approval by The Fed and OCC.
     Kratz is also chairman of National Bancshares Inc. and is director of its subsidiary, THE National Bank.
     --matthew.wrye@inlandnewspapers.com