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.