August 2008 Archives
Statewide, we're burning less gas -- and it's a fair bet the same is true for Inland Empire commuters.
Californians bought 65 million gallons less in May 2008 than in May 2007 -- a 5-percent drop, according to a report released last week Aug.28 by the state's Board of Equalization.
That's on top of last month's year-over-year decline. The board said that commuters purchased 2.2 percent less gas in April this year versus April 2007, a 28 million-gallon drop.
The average price for a gallon of gas in the San Bernardino-Riverside metropolitan region has been dropping for more than 50 days from a peak of $4.61 in June, but it's still higher than the $2.73 locals paid one year ago.
On Friday, the average local price was $3.86 a gallon.
Diesel fuel consumed in California in May dropped 225 million gallons -- a whopping 11-percent drop when compared to May 2007.
"The numbers confirm what every hard-working family knows," said Michelle Steel, 3rd district board member, in a news release. "When gas prices go up, consumption goes down."
Consumption might be heading down hill, but the state's gas tax revenue is going up.
"The BOE estimates that nearly twice as much sales tax is generated annually by higher gasoline prices than five years ago," the release said. "Those higher prices generated approximately $3.6 billion in sales tax during 2007 when the average price (per gallon in California) was $3.12. In contrast, 2003's gasoline sales generated $2.1 billion when the average pump price was $1.88."
On Thursday, San Francisco-based financial services firm Stone & Youngberg LLC released its second-quarter analysis on more than 70 West Coast community banks -- including several based in San Bernardino and Riverside counties -- and said it's closely monitoring their earnings and asset quality.
"The second quarter continues to be very challenging and opportunistic for community banks," said Michael Natzic, branch manager of the firm's Big Bear Lake branch, in a news release.
"Although we saw big write-downs in goodwill from some of the larger community banks, the majority of the smaller to mid-size community banks remain rather stable and adequately capitalized," he said.
To request a copy of the report, visit: www.syllc.com/communitybankreport
Financial companies headquartered locally and analyzed in the report include Chino Commercial Bancorp, Ontario-based CVB Financial Corp., Palm Desert-based Desert Commercial Bank, Big Bear Lake-based First Mountain Bancorp, Upland-based Golden State Business Bank, Ontario-based ICB Financial, Riverside-based Premier Service Bank, Riverside-based Security Bank of California, and Temecula Valley Bancorp.
Recession? What recession?
The Commerce Department on Thursday said the nation's gross domestic product actually jumped 3.3 percent between April and June, a revised estimate that was much higher than expected.
It was better than the first quarter's 0.9 percent growth and a negative 0.2 percent in the end of 2007, equipping recession-naysayers with more fuel for their fire.
But don't confuse the country's growth with what's going on at home.
"You could call it a regional misfortune... or a micro-recession," said Ira Jackson, dean of the Drucker School at Claremont Graduate University, about the Inland Empire's economy.
Our region's misfortune hearkens back to the late 1980s economy in New England, which shrunk a whopping 8 percent at one point, Jackson said. Just like San Bernardino and Riverside counties, construction and finance businesses -- among other industries -- led the downward spiral in unemployment at the time.
The U.S. economy may have expanded during the second quarter, but the year's remaining GDP numbers might nose dive into the red.
"Recession is also in the eye of the beholder," Jackson said. "When we look at (the definition of a) recession, we ought to be thinking about consumer confidence, which is at historic lows."
PFF Bancorp, the financial parent of PFF Bank & Trust, announced on Wednesday that its shareholder meeting will be held on Sept. 25 at 9:30 a.m. at the company's headquarters on 9337 Milliken Ave.
Votes will be tallied for the proposed merger between PFF and FBOP Corp., an Illinois-based company which owns several banks throughout the country.
If shareholders approve the acquisition, PFF banks will become Cal National Bank institutions.
With its common stock -- along with special series shares that PFF issued to FBOP through an agreement -- FBOP controls 28 percent voting power and will vote "yes" on the merger.
Collectively, PFF's board members and certain executive officers hold almost 3 percent voting power and will also vote "yes" on the merger.
If the merger is approved, stockholders will pocket $1.35 per share. For some, it's a huge loss, but other investors bought PFF stock when shares hovered around $1.
While customers collectively pulled out almost $600 million between March and June, multiple law suits were filed against PFF over the last couple of months.
Plaintiffs claim PFF executives foresaw huge real estate-related losses and sold their stock, while at the same time investing employees' 401k and stock-option retirement plans into PFF stock and telling shareholders that everything was OK.
Shareholders lost millions of dollars after shares peaked at almost $40 in mid-2006.
--matthew.wrye@inlandnewspapers.com
Vineyard National Bancorp, parent of Vineyard Bank, announced on Monday evening that Cynthia Harriss resigned from the Corona financial company's board of directors.
She was one of five candidates that former CEO Norman Morales managed to get elected to the board following a proxy battle, which ended in a shareholder vote meeting earlier this month.
The board appointed Perry Hansen, board chairman, to take Harriss's place, pending regulatory approval.
Vineyard also said that it amended the company's bylaws on Aug. 20 and increased the number of board seats from seven to eight. To fill the added spot, it appointed interim president and CEO James LeSieur to serve as a director, pending regulatory approval.
Federal regulators didn't approve of Morales sitting on the board.
Vineyard fired him earlier this year, and he's been trying to regain control of the bank ever since then with the help of long-time investor Jon Salmanson.
--matthew.wrye@inlandnewspapers.com
Even in a floundering economy, the so-called "green" movement is blossoming in the Inland Empire.
The economy might not be throwing commercial real-estate professionals champaign salaries like it was before the downturn, but now seems better than ever to capitalize on renewable technologies, according to some who work in the field.
"(The green movement) is chugging along faster," said Mary Sullivan, long-time commercial market researcher and owner of Riverside-based Sullivan Consulting Services.
"On the development side, it takes a while, but people are realizing it won't be as expensive as they once thought."
Tenants looking to rent space are increasingly inquiring about green office and industrial buildings, she said.
"It was originally thought to be more expensive, and there are still financial challenges," Sullivan said. "But they realize they can recapture that in long-term (energy efficiency) savings."
One of the largest local green projects garnering attention is a 600,000 square-foot rooftop on a large industrial building in Fontana. Several photovoltaic solar panels that will eventually transform sunlight into electricity are being installed by Rosemead-based electricity provider Southern California Edison.
The project is the first step of a larger $875 million proposal to fill more rooftops with solar panels. Edison is waiting for approval within the next six months from the California Public Utilities Commission to move forward.
For more information on "going green" in the Inland Empire, visit www.greenvalleynow.org, www.giveforthefuture.org and www.cssd.ucr.edu.
When the 2008 Southern California International Business Summit hits Ontario's Doubletree Hotel on Sept. 19, consulates from 15 countries will mingle with regional business leaders who are looking to make more money in oversees markets over the next decade.
"They range from Poland, Mexico, Japan, China, Singapore, Armenia, and others," said Bill Carney, president and CEO of Riverside-based Inland Empire Economic Partnership. "We're hoping over 400 people will attend this year."
The organization tried promoting the first annual event last year, but efforts to attract publicity were in vain when October's wildfires drew most, if not all, regional news media reporters to the natural disaster.
"Ultimately, we'd like to encourage and increase the amount of global trade in the Inland Empire and show our business community the opportunities of developing business in foreign markets," Carney said. "If you look right now among companies doing well in profitability and sales, it's those having the largest share of foreign markets, the Caterpillars and John Deeres of the world."
Foreign investment into companies across San Bernardino and Riverside counties is another subject the event will address.
So what businesses should attend the event, in Carney's opinion?
"It's really for any business, but the obvious are the small manufacturers," he said. "There are a lot of them who do foreign trade. We become aware of the niche products for markets abroad... and answer questions about how you finance it, insure it, and make sure you get paid."
The event is $50 if paid in advance, or $65 at the door, and pre-registration is required. Organizers ask that you RSVP by Sept. 12.
For more information, visit www.ieep.com or call 951-779-6700, ext. 241.
Come as a guest, leave as a friend -- that was Doreen Wiggins' motto.
Not anymore.
Feeling the brunt of an economic cliff dive in the mountain tourism industry, Wiggins is shutting the doors to Big Bear Lake-based StarGazers Inn & Observatory and listing the cozy six-bedroom resort for $889,900 -- far less than the $1.5 million it was appraised for last fall.
Wiggins' situation might change if an investor decides to lay down some cash to keep the celestial-theme business afloat for one or two years.
"I'm still praying for a miracle," said the former data architect.
Wiggins put $500,000 into remodeling and expanding the property after buying it in 2000. StarGazers had a sauna, indoor heated saline pool, game room, and a small observatory with an 11-inch telescope imported from Australia for gazing into space.
The resort never reached profitable occupancy rates, and October's wildfires sure didn't help.
"Unfortunately, a lot of people think the Big Bear area has burned to the ground," she said. "And other people don't even know it's in their back yard."
If Wiggins could hold on just a bit longer, her balance sheets would've come into the black, she said.
She has ideas for moving on, but her future career is still in the air.
"I'm still trying to figure out what the next chapter will be," Wiggins said. "I've always loved people and entertaining them."
--matthew.wrye@inlandnewspapers.com
Over the last few years, the real-estate fraud unit of the San Bernardino County District Attorney's Office has seen a 40-percent year-over-year increase in residents claiming to be fraud victims.
The unit's most-recent buzz: foreclosure fraud investigations.
Lately, investigators are dealing with foreclosed homeowners saying they were lured by schemers who promised foreclosure relief for a price tag of $2,000, $3,000 or even more.
"Our attention is directed there because the times demand it," said Larry Roberts, lead deputy district attorney. "But we're easily distracted by the overwhelming amount of (other) cases coming in over the last year."
From July 2007 to July 2008, the unit received almost 460 formal complaints from residents across the county claiming they were duped by mortgage fraud or foreclosure fraud schemes.
For the small 10-person division, the task is daunting, especially when the unit's case load grows larger every month.
It usually takes three to six months before investigators can determine whether a complaint can be turned into a case.
"We have 139 cases sitting here, waiting to be investigated," he said. "It continues to increase."
--matthew.wrye@inlandnewspapers.com
Wastwater services company Basin Water Inc. (Nasdaq: BWTR) said on Wednesday that it will request a hearing with Nasdaq stock exchange officials so it can postpone a scheduled Monday stock delisting.
The request ensures that shares will stay listed for the time being.
But if the stock is eventually delisted, the Rancho Cucamonga company would most likely get downshifted to a smaller exchange, closing the door to institutional investors with deeper pockets.
Basin Water announced last week that it couldn't file a second-quarter financial report on time because an internal audit committee and independent attorneys were reviewing money transactions.
The stock closed at $1.78 on Wednesday, down from about $17 when the company went public in May 2006.
The company might have to restate financial statements for certain periods, according to a previous statement.
It doesn't expect analysts' 2008 revenue estimates of $26 - $36 million will be reached, but instead will report "significant changes" in financial results for the first six months of this year compared to the same period last year.
"The company may be reexamining the transfer of water rights to its affiliate, Empire Water, which was completed in the fourth quarter last year," states an Aug. 11 research note published by Janney Montgomery Scott LLC investment firm. "Another possible catalyst for the reassessment is the company's sale of receivables to third-party financial groups."
The company lost $5.1 million in the first quarter, on top of other quarterly losses in 2007.
Basin Water doesn't expect to report its financials until after the internal audit is completed.
The company had about $23 million in cash as of June 30.
--matthew.wrye@inlandnewspapers.com
1st Centennial Bancorp announced Monday that it gave the boot to two top executives last week.
On the heels of the Redlands-based financial company's second loss in 16 years, its board of director's fired Tom Vessey, president and CEO, and John Lang, chief credit officer, on Friday.
Chief Financial Officer Beth Sanders wouldn't comment. She deferred to a company statement that says Suzanne Dondanville, chief operating officer, is now the interim president and CEO.
1st Centennial's second-quarter financial filings say the company has enlisted D.A. Davidson & Company -- a Great Falls, Mont. financial advisor -- to evaluate "capital and other strategic alternatives."
Its losses stem from home builders who can't repay what they borrowed from the bank.
The company lost $4.2 million over the first six months of this year compared to earnings of $4.1 million over the same period last year.
Total deposits at 1st Centennial's six bank branches jumped 13 percent from December to June. Stock shares closed Tuesday at $2.15, down from a peak of $30 in March 2007.
The $760 million asset bank has branches in Redlands, Palm Desert, Temecula, Escondido, Brea and Irwindale.
--matthew.wrye@inlandnewspapers.com
That's what a report released today by La Jolla-based real-estate data company DataQuick Information Systems says.
The median price for a home fell about 35 percent in the two-county region from July 2007 to July 2008. In San Bernardino County, it now stands at $230,000, or $260,000 in Riverside County.
More than 20,000 new and resale single-family homes and condominiums sold across San Bernardino, Riverside, Los Angeles, Orange, San Diego, and Ventura counties in July - almost a 17-percent jump from the previous month and 14-percent increase from one year ago.
About 43 percent of those resales were foreclosures - up from 8 percent in July 2007.
"Before the credit crunch hit in August 2007, nearly 40 percent of Southland sales were financed with jumbo loans," the report states. "Jumbos last month accounted for 15.8 percent of Southland sales."
The report went on to explain: "The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,632 last month, down from a $1,671 the previous month, and down from $2,447 a year ago. Adjusted for inflation, the current payment is at its lowest level in five years.
It's 36.9 percent below its year-ago level and 24.2 percent lower than the spring of 1989, the peak of the prior real-estate cycle."
A silver rush might blaze into the High Desert by year's end.
International Silver, Inc. (OTCBB: ISLV), based in Tuscon, Ariz., hopes to start drilling in a few months on the Laviathan Property -- a 1,300-acre piece of land owned by the Bureau of Land Management and located in the Calico Mining District, near Barstow.
Silver is only the half of it, though.
The company estimates there's about 1 million tons of barite-silver ore entrenched throughout 60 mining claims on Laviathan. Barite is a heavy material used in manufacturing oil drills.
While International Silver goes through its environmental review process to eventually lease the bureau's land, the company is also in escrow with a private owner on an adjacent parcel, the Langtry Property.
Langtry comprises about 400 acres, and it's estimated to have 72 million ounces of silver and almost 3 million tons of barite.
Harold Shipes, president and CEO, said that after selling the barite, operating costs for mining the silver will be near zero.
"When silver started increasing in price, we went back and reviewed several silver properties," Shipes said. "These two caught our fancy."
Silver fetched about $5 an ounce in late 2003. Silver futures closed at $12.72 per ounce on Friday.
Shipes, a 35-year industry veteran, says his company's drilling operations will eventually create about 150 jobs.
International Silver was founded in 1992 and went public in March. It has about 100 shareholders and a market capitalization of $5 million. The stock closed at 32 cents a share on Friday.
--matthew.wrye@inlandnewspapers.com
The unemployment rate is inching even higher in the San Bernardino-Ontario-Riverside region, clocking in at almost 9 percent for the month of July.
That's according to a Friday report published by the state's Employment Development Department.
It stood at 5 percent in late 2006.
Several job losses came from state government and the education sector, where summer recess is giving several teachers a three-month break.
The leisure-hospitality industry shed 2,000 employees. More than half of them worked at restaurants and bars.
Between July 2007 and July 2008, nonfarm employment shrunk by 26,000 jobs.
The region is suffering from the consequences of a badly-bruised housing market. Residential and commercial construction workers are baring the brunt of this downturn.
Throughout the mid- to late-1990s and during the early 2000s housing boom, the area's construction employment soared to more than 127,000 jobs by 2006, according to a quarterly economic report released in July by Redlands-based regional economist John Husing.
But within two years, San Bernardino and Riverside counties lost more than 28,000 of these jobs -- about 22 percent of the construction hiring peak in 2006.
--matthew.wrye@inlandnewspapers.com
As Soyo Group Inc. (OTCBB: SOYO.OB) strives to increase its share price to $2, the consumer electronics manufacturer-distributor announced on Thursday that it netted a mere $30,000 in second-quarter earnings -- substantially lower than the $1 million projected.
The stock closed at 70 cents on Thursday.
Higher fuel and shipping costs are eating away at the Ontario company's profits, the company said in a statement. Shipping expenses were $1.3 million more than expected.
Soyo had projected $1.5 million in earnings over the first six months of this year, but only $235,000 of that has materialized so far.
Sales jumped 33 percent to $32 million from April to June. It was the company's 10th consecutive quarter of year-over-year sales increases.
If Soyo's stock reaches $2 a share, the company might get listed on the American Stock Exchange. Shareholders recently approved issuing 125 million more shares, which would more than double the number of outstanding shares.
While Soyo is looking to acquire financially-troubled electronics companies, it's trying to market computer, telecommunications and electronics products in an economy that's forcing similar companies to go bankrupt.
Last year, Soyo signed a deal with Honeywell International Inc. to supply the electrical industry giant with LCD and plasma flat-panel televisions.
After the company went public in mid-2005, its stock reached a record peak of $1.48 in October.
--matthew.wrye@inlandnewspapers.com
The San Bernardino-based grocery chain said its third-quarter financial results were "affected by the downturn in the economy" and the strain it's putting on family budgets.
Stater Bros. grocery stores have always competed with national grocery giants, but niche supermarkets like Fresh and Easy Neighborhood Market, Trader Joe's, Henry's Farmers Market and Sprouts Farmers Market are increasingly taking a bite out of the competition.
Higher gas prices are forcing consumers to trim back monthly budgets. For some, that means food.
Total sales at Stater Bros. stores between September and June jumped
4.5 percent compared to the same period a year ago.
"Our plan was to hold our customer counts, and that was accomplished," said president and CEO Jack Brown in a news release.
Stores saw an increase of 324,000 customers during the last 10 weeks, a sign that Staters is holding its own in the Inland Empire grocery industry.
The company's new refrigerated distribution operation will come online by next year.
Staters is ending a $300 million consolidation project that took months to complete. Multiple distribution hubs have been combined into one large facility in San Bernardino.
--matthew.wrye@inlandnewspapers.com
Nationwide foreclosure activity jumped 8 percent in July, and the San Bernardino-Riverside-Ontario metropolitan area ranked No. 6 in the country on the foreclosure filing totem pole, according to a report released today.
One in every 91 local households received a foreclosure filing during July, according to Irvine-based real-estate company RealtyTrac Inc.
Last month, it was one out of every 95 households.
The "filings" include default notices, auction sale notices and bank repossessions.
The two-county region's No. 6 rank comes after being No. 5 from May to June, and No. 4 in April.
In July, the Merced metro area was No. 2, and Cape Coral-Fort Myers, Fla. was No. 1.
Six out of the top 10 cities in the report are in California, a sign that bank-owned properties are still hammering away at the state's downtrodden real-estate market.
Statewide, foreclosure filings increased to almost 72,300 on California properties -- 5 percent more than the previous month, and up 85 percent from July 2007.
In fact, one out of every 182 households in California received a foreclosure filing.
Bank repossessions throughout the state have skyrocketed to about 23,400 -- more than five times what they were in July 2007. Defalt notices clocked in at about 36,300 and auctions at about 12,500.
On a quarterly basis, one in every 32 homeowners in the two-county area either gave up the keys to their house, saw it auctioned off or couldn't pay their mortgages on time, a second-quarter RealtyTrac report says.
Over the last two quarters, the region ranked No. 2 nationwide for foreclosure filings.
--matthew.wrye@inlandnewspapers.com
Look below to read RealtyTrac's July report on foreclosure filings:
Almost 30 Longs Drugs stores do business in the Inland Empire, but starting next year, new signs will be posted above those locations.
CVS Caremark Corp. (NYSE: CVS), parent of CVS Pharmacy, announced Tuesday evening that it is acquiring Longs Drug Stores Inc. (NYSE: LDG) for $2.7 billion.
Longs, a 70-year-old pharmacy chain based in Walnut Creek, was founded by brothers Joe and Tom Long.
The merger will have a "minimal" impact on Longs locations, but store closures aren't being fully ruled out, according to CVS spokesman Mike DeAngelis.
"We haven't made any final decisions regarding that," he said.
CVS will start converting and remolding Longs stores in early 2009.
--matthew.wrye@inlandnewspapers.com
More losses are gouging the bottom lines of two Inland Empire financial companies that are already under close watch by federal regulators.
Vineyard National Bancorp -- the Corona-based parent of Vineyard Bank -- said its second-quarter losses are actually $5 million more than it reported last week, according to a financial statement filed Monday afternoon.
Vineyard's overall losses total almost $140 million since the end of 2007.
Official election results for Vineyard's board of directors were released Tuesday, ending a bitter proxy battle. The company's ousted CEO, Norman Morales, managed to get five out of seven candidates elected by shareholders, while Vineyard's candidates filled the other two spots.
Customers made a "run-off" with about $227 million from April to June due to "negative publicity relating to our financial results... (and) the seizure of IndyMac Bank by federal regulators," the statement says.
Luckily, Vineyard Bank branches received significant deposit inflows around the same time, possibly because new customers are looking to stash their cash somewhere they think is safe.
On the same day, Rancho Cucamonga-based PFF Bancorp -- parent of PFF Bank & Trust -- reported a second-quarter loss of $18 million. It's far less than the combined $225 million hit taken in the two previous quarters.
PFF is facing class-action lawsuits and investigations alleging it abandoned its responsibility to shareholders and employees, and it's buttressing its takeover bid by FBOP Corp., a private Illinois-based bank holding company.
PFF said that customers collectively pulled out almost $600 million between March and June.
Like Vineyard, PFF has ramped up its borrowing from the Federal Home Loan Bank, a program that several cash-needy institutions are drawing from these days. PFF borrowed $555 million between June 2007 and June 2008.
Vineyard borrowed $126 million in July from the same program.
Vineyard attracted substantial brokered deposits to offset the run-off in customer deposits.
However, federal regulators recently ordered Vineyard to stop accepting and renewing brokered deposits, which are much riskier than deposits from customers.
Gas prices nationwide fell for the 25th day in a row on Monday, bucking their usual mid-summer trend of rising steadily.
It's welcome news for penny-pinching consumers bemoaning the high price of oil and making life-style changes to accommodate having less money in their piggy-banks every month.
The average price of a gallon of gasoline in San Bernardino and Riverside counties was $4.08 on Monday.
That's down from a peak of $4.61 on June 22, but higher than the now-envied $2.90 locals paid one year ago.
"Usually, summer travel kicks (prices) up a little more," said Jeffrey Spring, spokesman for the Automobile Cub of Southern California. "We usually put on a few more miles for summer travel."
Not this summer.
Monthly Federal Highway Administration data shows that vehicle travel dropped almost 4 percent when comparing May 2007 to May 2008.
Also, the state's Board of Equalization recently said that Californians purchased 2.2 percent less gas in April of this year versus one year ago -- about 28 million gallons less.
--matthew.wrye@inlandnewspapers.com
might be shedding about 30 percent of its flights, but the seeds of economic growth in this city are still visible.
Building projects are coming online and new businesses are opening
their doors, according to a city newsletter.
* Kaiser Permanente is constructing Ontario's first hospital. It's
expected to be completed by 2011 and will put more than 100 physicians and medical providers to work, along with a staff of 1,200.
* National home improvement giant Home Depot signed a 35-year lease
for a new store in the northwest corner of Euclid Avenue and Riverside Drive. The store is being built right now.
* Bianchi International is relocating its gun-holster manufacturing
operations to Ontario. It's slated to share a plant with Safariland, a holster maker owned by BAE Systems.
* A 175-room Embassy Suites hotel was recently approved by the city
council. It will be constructed where Haven Avenue meets the 10 Freeway.
* While certain parts of the commercial real-estate market go through
a downturn, Ontario leads the region in industrial leasing activity, with a 2.85 percent vacancy
rate reported for the first quarter, according to CB Richard Ellis.
* GE Energy Financial Services, a unit of General Electric Co., has
partnered with other companies to provide a 2.3-megawatt rooftop solar cell system for Toyota Motor Sales' North American Pole plant located in the city.
--matthew.wrye@inlandnewspapers.com
| Press Release | Source: 1st Centennial Bancorp |
1st Centennial Bancorp Announces Second Quarter Financial Results and Plans to Evaluate Capital Alternatives
Thursday August 7, 5:11 pm ET
Both the Company and Bank remain "well capitalized" as defined by applicable regulatory definitions. As of June 30, 2008, the Bank's Tier 1 capital to average assets ratio ("Leverage Capital Ratio") was 7.38%, the Tier 1 risk-based capital ratio was 9.35%, and the total risk-based capital ratio was 10.61%. On a consolidated basis, as of June 30, 2008, the Company's Tier 1 capital to average assets ratio was 7.60%, the Tier 1 risk-based capital ratio was 9.61%, and the total risk-based capital ratio was 10.87%. Under the regulatory definitions, in order to be considered "well capitalized," a financial institution must have a Leverage Capital Ratio of at least 5%, Tier 1 risk-based capital ratio of at least 6% and a total risk-based capital ratio of at least 10%. To be adequately capitalized, those same ratios must be at least 4%, 4% and 8%, respectively.
Patrick J. Meyer, Chairman of the Board, commented, "The financial services industry continues to experience a very challenging economic environment, especially in the Inland Empire and other parts of Southern California. These are clearly unprecedented times for our nation, our region and our company, as reflected in the results of operations that so many other financial institutions are reporting. As the financial services industry works through the excess housing inventory in the Inland Empire and surrounding areas, we are strategically positioning ourselves to take advantage of the economic recovery that will occur once the housing industry returns to normal. Here are some specific steps we have taken so far:
- We are completing our review of our entire loan portfolio, with specific emphasis on our construction loan portfolio;
- We have significantly curtailed our construction lending and will be concentrating on our commercial lending product line;
- We are diligently working on plans to resolve and/or restructure our nonperforming assets in an effective and efficient manner in order to maximize shareholder value and not 'give away' these assets to others at low current market prices."
Meyer continued, "While both the Company and the Bank continue to remain well capitalized under applicable regulatory definitions, we believe that further strengthening of our capital position is important to properly position the Company for future growth. This additional capital will help support the balance sheet during this difficult credit environment and provide operational flexibility to allow our footprint in high-growth and populous markets and favorable core deposit franchise to continue to create value for shareholders.
Accordingly, our Board of Directors is evaluating capital alternatives in order to further strengthen our capital position, and we have engaged the investment banking firm D.A. Davidson & Company as our financial advisor with respect to evaluating capital and other strategic alternatives to enhance shareholder value. We have always valued our customer and shareholder relationships and will continue to do so in the future in order to remain a 'Nice Place to Raise Your Business.'"
Aerospace industry manufacturer Emrise Corp., based in Rancho Cucamonga, reported a loss of $300,000 for the second quarter and also said on Thursday that a New Jersey company it plans to buy received environmental clearance for the pending acquisition.
"While we continue to incur net losses, we have decreased the amount of these losses as compared to the prior year periods," a company statement said.
The company lost $1.2 million over the first half of this year compared to $1.4 million during the same period last year.
Emrise shares closed at on Thursday.
The manufacturer has to acquire Advanced Control Components -- which it says will happen around Aug. 15 -- for a reverse stock split to happen.
If the split is approved by shareholders later this year, it will increase share value so the company can stay listed on the New York Stock Exchange.
Shares peaked at more than $11 in 1992, and the company's penny-stock status means it's facing a delisting on the exchange.
Emrise's first-quarter loss of $900,000 was mostly due to production and customer-related delays. Before that, the company saw a total of $5.5 million in losses between 2006 and 2007 because of slower sales, among other reasons.
Advanced Control Components is a New Jersey-based electronics device producer.
--matthew.wrye@inlandnewspapers.com
Vineyard National Bancorp reported a loss of $62.5 million on Wednesday for the second quarter -- more than four times the company's losses in the first quarter of this year.
Vineyard -- the financial parent of Vineyard Bank -- is shoring up capital to stay afloat amid its mounting losses stemming from the Inland Empire's imploding real-estate market.
The Corona-based company borrowed $126 million from the Federal Home Loan Bank on July 24, according to Wednesday's statement.
Vineyard also recently entered into an agreement with the Federal Reserve Bank of San Francisco to borrow money through the reserve's discount window, a federal finance program that several banks are taking advantage of these days as liquidity becomes a major concern.
Now Vineyard has about $300 million in liquid assets to work with as it continues "pursuing strategic alternatives for raising capital," the statement says.
--matthew.wrye@inlandnewspapers.com
Look below to read Vineyard National Bancorp's news release:
Soyo Group Inc. (OTCBB: SOYO.OB) is one step closer to possibly getting a spot on the American Stock Exchange.
But the Ontario-based consumer electronics distributor's stock must rise to $2 a share before the exchange will list the company. Shares closed at 77 cents on Tuesday.
Shareholders gave approval at Soyo's annual meeting on Monday for the company to issue 125 million extra shares of common stock. It would more than double the company's outstanding shares.
Soyo is trying to attract investors willing to put their money on the line.
In the meantime, it's looking to acquire electronics companies that are struggling financially.
"We've spoken to a few companies already this year," said Ed O'brien, director of marketing. "There are other companies that have approached us as an acquisition partner... companies that are in trouble."
If the stock can get listed on AMEX, Soyo might be a lucrative prospect for institutional investors with deeper pockets.
Shareholders also re-elected its current board of directors for another term, while increasing employee stock options.
The 43-employee company is trying to shrug off almost $5 million in losses for 2003 and 2004 and build upon its $6.5 million in earnings from 2005 to 2007.
Similar companies comparable to Soyo's size have gone bankrupt over the last couple of years. Last year, Soyo signed a deal with Honeywell International Inc. to supply the electrical industry giant with LCD and plasma flat-panel televisions.
The company's stock reached a record peak of $1.48 in October.
--matthew.wrye@inlandnewspapers.com
Nope.
That's what the Federal Reserve Board said about Norman Morales's bid to help lead financially-troubled Vineyard National Bancorp, the parent company of Vineyard Bank.
The federal regulator doesn't approve of Morales sitting on the Corona company's board of candidates, which he's been trying to accomplish through a proxy battle in recent months.
The former CEO was nominating himself, investor Jon Salmanson and five other candidates to Vineyard's board of directors, but on Monday he announced the federal regulator's decision.
Morales led the bank during a period that Vineyard attributes its skyrocketing loan losses to.
Still, Morales and like-minded investors own a substantial amount of stock, which boosts their voting power at Tuesday's much-anticipated annual shareholder meeting.
Besides its millions of dollars in loan losses, Vineyard -- with its own board nominees -- has been fighting Morales and Salmanson in the proxy battle.
The company will tally votes on Tuesday and announce who was voted on the board of directors to lead the bank.
--matthew.wrye@inlandnewspapers.com
Look below to read Norman Morales and John Salmanson's news release:
The fate of leadership at Vineyard National Bancorp -- the parent company of Vineyard Bank -- lies in the hands of Tuesday's annual meeting, where shareholder votes will determine who takes charge in the coming months.
Some stakeholders speculate the tug of war between former CEO Norman Morales and Vineyard will be a pushover in Morales's favor.
Besides, he and a like-minded group of investors, including John Salmanson and Douglas Kratz, have purchased a substantial amount of Vineyard stock.
The bank said Morales "resigned" in January. He was cut a check for more than $1 million, among several other perks. He led the bank during a period that Vineyard attributes its skyrocketing loan losses to.
But because of Vineyard's "troubled condition" status designated by federal banking regulators, either side's board candidate nominees are subject to regulatory approval.
Vineyard Bank announced last week that it is voluntarily agreeing to a federal regulator's consent order, which says the bank must manage its financial woes by following a three-year capital plan and numerous other rules.
Also, the OCC charged Vineyard with the daunting task of keeping its head above regulatory waters.
Vineyard must not only diversify its investments, but also get the OCC's permission if it wants to grow its loan portfolio by more than 5 percent from the prior year, among a litany of other regulations.
The documents also said Vineyard told its creditor -- First Tennessee Bank National Association -- on Thursday that it might need another extension on a $48 million loan. The overdue loan was already extended to Aug. 29, and Vineyard is backing nonpayment with its entire shareholder stock.
Besides himself, Morales is asking for approval of Kratz, Thomas Koss II, Cynthia Harriss, Harice "Dev" Ogle, Lester Strong and Glen Terry.
Through investor group One Investments LLC, Kratz bought almost 10 percent of Vineyard's stock in late June for about $6.3 million. Morales and Salmanson joined Kratz in the stock purchase.
Vineyard is asking shareholders to approve interim CEO James LeSieur, Frank Alvarez, David Buxbaum, Charles Keagle, Robb Quincey, Joel Ravitz and J. Steven Roush as board members.
Vineyard's shareholder meeting will be held at 2 p.m. at the Doubletree Hotel in Ontario on 222 N. Vineyard Ave.
--matthew.wrye@inlandnewspapers.com
It's become a trend.
That's what researchers at Cal State San Bernardino said today in a report released by the Institute of Applied Research and Policy Analysis.
July's purchasing manufacturer's index -- a barometer of how well local manufacturers are fairing -- came in at 41.2. It's the second-lowest index reading since the report's inception in 1993.
The index is based off a survey of commodity prices, production numbers, new orders, inventory numbers, employment numbers and supplier deliveries at companies.
In July, production and new orders -- two key economic indicators -- dropped sharply.
Inventory, employment and supplier deliveries "continue to manifest weakness," the report says.
"If the PMI continues to remain this low for the next two months, this will indicate that the local economy is in recessionary mode," the report states.
Also, 44 percent of purchasing managers surveyed said they think the Inland Empire's economy will continue weakening, while another 46 percent said things will remain sluggish.
The news comes on the heels of June's report, which said oil and raw material prices were eating away profit from local companies' bottom lines at a record rate.
Shipping budgets keep growing as businesses cope with the cost of crude oil.
--matthew.wrye@inlandnewspapers.com
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