Oct. 8--RALEIGH -- Two Sanford residents resigned Monday from Capital Bank's board of directors as part of a bigger action that saw the company down size its board from 17 to 10 members in the face of declining profits.

Oscar Keller Jr. and L.I. "Poly" Cohen, both founding directors of the bank, announced their resignations Monday. Cohen, who is currently seeking an at-large seat on the Sanford City Council, resigned effective immediately. Keller's resignation will become effective in December.

CEO Grant Yarber said the reduction was proposed by a consultant as a way of bringing down costs.

"Most companies and banks our size have a board of directors in the 10 to 12 member range. Some have less and some have more, but on average, they have 10 to 12 board members," he said. "But 17 is a significantly large number."

Keller said he agreed with the decision and plans to stay involved as a member of the bank's local board.

"I made up my own mind (to leave). I feel good about it," he said. "I've been there since day one, and all I can say is I invite people to continue doing business with Capital Bank."

Cohen said he would have "liked to see it through to fruition," but added that he understood the move and looked forward to pursuing his bid for the Sanford City Council and spending time with his family.

"When you hire a consultant, you better take his advice or else you're just wasting your money," he said. "I've been on the board since the beginning and they need some new people, so I'm off. It was fair, and we all voted together. Everybody's happy."

Yarber said the consultant identified the "excessive size of the board as something that interfered with our effectiveness and nimbleness, and the entire board voted (to reduce the size)."

The other directors who resigned Monday are James Barnwell Jr., James McClure Jr., James Moser Jr., Richard Shirley, and J. Rex Thomas.

Keller's resignation will occur in December, Yarber said, because he will help transition the chairmanship of the board's loan committee to another member.

Yarber said the move will also allow for new members to join the board as the bank grows.

"We anticipate adding one or two new members from other growth areas. It's a very healthy process," Yarber said. "It was a unanimous vote that this was the best way to run a publicly-held company."

Keller's son, Sanford resident Oscar "Buddy" Keller III, remains chairman of the board of directors. Sanford residents Charles Atkins, Robin Perkins, Don Perry, and Sam Warnum also remain members.

"The bank was founded (in Sanford), and half of the board still lives there," Yarber said.

Capital Bank was founded in 1997 and has branches in 10 of North Carolina's 100 counties.

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