Vineyard National Bancorp gets extension on $48 million loan

     Vineyard National Bancorp (NasdaqGS: VNBC) couldn’t pay a $48.3 million loan to its lender on time, so the financially troubled holding company based in Corona is getting a much-needed extension.
     Documents filed Thursday evening with the Securities Exchange Commission say that Vineyard — the parent company of Vineyard Bank — will have until Aug. 29 to pay off First Tennessee Bank National Association, a subsidiary of Memphis, Tenn.-based First Horizon National Corporation (NYSE: FHN).
     First Horizon is also suffering the consequences of its risky residential construction loans. The largest bank in Tennessee is shoveling millions of dollars into its loan loss reserves as it watches its portfolios deteriorate.
     Vineyard was pegged for $120,000 under the agreement, and the loan’s interest rate jumped 0.45 percent to a rate equaling LIBOR plus 3.5 percent.
     Vineyard also said its Aug. 5 annual shareholder meeting will be held at 2 p.m. at the Doubletree Hotel in Ontario on 222 N. Vineyard Ave.
     Investor John Salmanson and former CEO Norman Morales are expected to nominate their hand-picked candidates for the board of directors, but Vineyard is urging shareholders to vote down those nominees.
     The bank wants shareholders to approve the following candidates to the board of directors: Frank Alvarez, David Buxbaum, Charles Keagle, James LeSieur, Robb Quincey, Joel Ravitz and J. Steven Roush.

I.E. Vons stores lay off, demote employees

     Vons supermarket is going through some tough times, and local stores are feeling the brunt of it.
     A subsidiary of Pleasanton-based Safeway Inc. (NYSE: SWY), the Southern California chain’s Inland Empire stores laid off nine union employees, demoted 52, and switched 30 from full-time to part-time status in June
     “The biggest part of the (Southern California layoffs) are in our jurisdiction,” said Brent Denkers, secretary-treasurer of Local 1167, a Bloomington-based chapter within United Food and Commercial Workers International Union.
     The union’s Inland Empire jurisdiction represents workers at 37 Vons stores.
     He said Vons never completely recouped from the huge union strikes that hit Southern California grocery stores in 2003.
     “Regular customers didn’t shop there during the strike,” Denkers said. “Customers didn’t return, and (Vons) lost business. It’s required the company to do some layoffs.”
     The union is filing grievances on behalf of employees.
     “We believe there was an error made by the company in the procedures they used to lay off,” Denkers said.
     Union employees have “recall rights,” which means if the company is looking to hire or promote anyone, the laid off and demoted workers get first dibs.
     “We’re hopeful it’s a temporary thing,” he said. “It depends on how soon business picks up. Everything is impacting our economy right now.”

Posted in Uncategorized | 1 Reply

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.

Posted in Uncategorized | 1 Reply

Soyo Group Inc. looking for bigger britches

     Soyo Group Inc. (SOYO.OB) is looking for bigger britches, but the penny-stock company that’s traded on OTC Bulletin Board needs investors with deeper pockets.
     The Ontario-based consumer electronics distributor’s stock has taken a roller-coaster ride between October 2007 and now, falling 67 percent from its record peak of $1.48 to close at $0.49 on Thursday.
     Nonetheless, over the last two-and-a-half years the 43-employee company has gone from 800 to 1,200 shareholders and will soon be doubling its office space.
     Now Soyo wants a spot on the American Stock Exchange in New York, which means increasing its stock value to where it stood just nine months ago.
     Shareholders will be asked to approve a common stock increase from 75 million to 200 million shares at Soyo’s Aug. 4 annual meeting. If approved, the company might be a lucrative prospect for institutional investors with big piggy-banks.
     “We’ve already filed our application for the American Stock Exchange and meet every requirement to get there, except our share price,” said Ed Obrien, director of marketing.
     The 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.
     Some of those losses stem from Soyo’s bad debts. It’s customers got hit with stiff competition from companies like Dell Inc. and couldn’t pay up.
     “Their direct-end user model really commoditized the motherboard industry,” he said about Dell. “When that happened is when everything converted to LCD monitors and Bluetooth technology. It’s difficult knowing what’s going to be hot next.”
     To compound the issue, Soyo was being led by managers who were “a little more old-school,” Obrien said.
     The company’s big news over the last year was a deal signed with Honeywell International Inc. to supply the electrical industry giant with LCD and plasma flat-panel televisions.
     Soyo went public in mid-2005 after completing a reverse merger with Vermont Witch Hazel, a Los Angeles-based skin care company.
     Soyo has a market capitalization of $26 million and contracts with manufacturing companies in Taiwan, China and Mexico.

Is Starbucks’ bad fortune good news for local coffee shops?

     Local independent coffee shop owners could see a boon from Starbucks Corp.’s decision to close 600 stores nationwide, although it’s unknown which local stores will be axed.
     The Seattle-based retail coffee giant said Tuesday afternoon that certain unprofitable stores — 70 percent of them having been opened between early 2006 and now — will shut their doors this year and into 2009, leaving 12,000 employees without jobs.
     Dozens of Starbucks stores opened across San Bernardino and Riverside counties during the housing boom and in its aftermath.
     With yesterday’s news, some residents are no doubt feeling they may have to pick up a cup of Joe at the Starbucks across town or the mom-and-pop coffee shop around the corner in the future.
     “It’s the buzz,” said Morris Siancuri about Starbucks’ announcement.
     Siancuri helps manage Last Drop Coffee House in downtown Claremont, a coffee shop with loyal customers.
     “It’s good news for us, but it’s also bad news for the people who’ll lose their jobs,” he said. “My cliental doesn’t support Starbucks anyway.”
     While Starbucks has forced several small coffee retailers either out of business or back to the strategic drawing board, the multi-million-dollar company’s pricey menu for roasted grounds has actually been a good thing for some independent owners, Siancuri said.
     Christian Carrizales, manager of Coffee Nutzz in Rialto, agrees. He says most of his cliental are either existing or ex-Starbucks customers.
     “If one were to close near us, it might give us a chance at the people that haven’t given us a chance,” he said.


     Look below to read the Associated Press story on Starbucks Corp.’s decision to close 600 stores:

Continue reading

I.E. construction spending follows national downshift

     It seems the Inland Empire’s construction scene is following a national trend.
     Construction spending nationwide fell for the 11th time in May, the Commerce Department said on Tuesday, but it wasn’t because developers cut back on commercial spending.
     In fact, nonresidential construction rose in May by 0.2 percent to a record $405 billion, while home and apartment starts dropped 1.6 percent — the 25th decline over the last 26 months.
     While local commercial building rates are fairing much better than home building, the commercial market looks like it’s starting to take a nose dive this year.
     When the housing market peaked in the two-county region in late 2006, commercial developers and brokers were still pouring hundreds of slabs and soliciting work space.
     Builders pulled 22,000 residential permits during the first five months of 2004 across the two-county area, but that number has plunged 80 percent when compared to the same period this year, according to the Burbank-based Construction Industry Research Board.
     Commercial permits, on the other hand, have mostly risen. CIRB only tracks the dollar amount of commercial permits and reports that the value of these permits rose 50 percent in San Bernardino County for the five-month period from 2004 to 2007 before finally dropping 40 percent this year.
     Likewise, the value of commercial permits jumped 23 percent in Riverside County for the same five-month period from 2004 to 2007, but this year that value dropped 15 percent.