Cynthia Harriss, one of the five dissident slate members voted onto the Vineyard National Bancorp (Nasdaq: VNBC) board of directors, resigned from her position on Aug. 20, according to U.S. Securities and Exchange Commission filings made public Aug. 25.

The resignation came less than a month after the bank's Aug. 5 annual meeting where Harriss and the remaining four dissident members were elected to the new board of directors.

The resignation did not result from any disagreement with the bank or its operations, policies and practices, according to the SEC filing.

Vineyard board chairman Perry Hansen will fill the vacancy left by Harriss pending regulatory approval.

On the same day that Harriss resigned, the board increased the number of authorized directors from seven to eight.

The move provided an opportunity for Interim President and Chief Executive Officer James LeSieur to be reappointed to serve as a director of the bank pending regulatory approval.

LeSieur served as a director of the bank from December 2004 through Aug. 11, the date the shareholder vote for the annual meeting was certified and the new board was seated.

LeSieur was not elected to the new board at the annual meeting.

"This way the bank board and the holding company board are identical," director Douglas Kratz said.

Hansen and LeSieur are already on the subsidiary bank board.

According to the bank's bylaws, the number of directors "shall not be less than five nor more than nine with the exact number fixed at seven until changed."

Changes to the number of board seats can be approved either by the board itself or by shareholders.

Harriss was a member of a dissident slate of directors originally proposed by the bank's former president and CEO Norman Morales.

Morales himself was a member of the alternate slate but withdrew his name due to his inability to gain regulatory approval.

Fellow dissident slate member Thomas Koss withdrew the same day as Morales.

The five remaining dissident members, including Harriss, were all elected to the bank's board at the annual meeting.

Power balance

With the departure of Harriss and the addition of LeSieur, the balance of power on the board shifted to an even keel.

The dissident slate held a 5-2 advantage over the re-elected members, but the board's makeup is now even at 4-4.

The board remains under pressure from the Office of the Comptroller of the Currency to hire a full time CEO and chief credit officer.

As part of the consent order signed with federal regulators, the bank has until Oct. 31 to fill both positions.

Once a new CEO is appointed, LeSieur's status with the company will be decided by the board, Kratz said.

The board has not ruled out using a recruiting firm to aid in the search for a new CEO.

Vineyard officials stated in mid-August that they were nearing completion on the chief credit officer position and hoped to have the position filled by the end of the month.

The identity of the prospective chief credit officer was not disclosed.

The bank had nothing new to report on efforts to fill those positions as of Aug. 26.

The bank notified the Federal Reserve Bank of its election to terminate its financial holding company status on July 22.

The issue is still pending, according to Vineyard spokesman Jim Lucas.

The election would not result in an immediate termination of the holding company but instead would be in favor of or against the process.

If shareholders did ultimately elect to drop the holding company, the bank would continue its current banking operations, but would be unable to engage in businesses such as insurance, financial advisory services and other activities deemed to be financial in nature.

Vineyard officials do not feel the loss of the holding company will have an adverse effect on current operations.

The bank does not engage in activities that require it to be registered as a financial holding company, according to Lucas.