Wednesday, Mar. 04, 2009

County Bank opens with new name

Westamerica owns branches, but records not yet merged

All 39 branches of failed County Bank reopened for business under the ownership of Westamerica Bank on Monday, the Federal Deposit Insurance Corp. confirmed.

The California Department of Financial Institutions on Friday closed Merced-based County Bank, which is owned by Capital Corp. of the West. The state agency immediately appointed the FDIC as the receiver.

As in other bank failures, the FDIC had worked out a deal in advance to sell County Bank's deposits and branches. The buyer is Westamerica Bank of San Rafael. Regulators took over the bank after it closed Friday to expedite the transition. Nine branches with Saturday hours opened as usual, but as West-america branches.

David Barr, an FDIC spokesman, said the transition seemed to be going smoothly and no serious problems were reported at any of the branches Monday.

Deposits, money markets, checking accounts and all other financial tools continue to be insured by the FDIC. Barr said the protection simply rolls over with the merger because Westamerica purchased all of County Bank's assets and now stands behind them.

Barr said customers don't need to to change their banking relationship to retain their coverage, adding that people with money in both banks have up to 90 days to restructure those finances if they exceed FDIC limits.

Customers of both banks should continue to use their existing branches until West-america can fully integrate the records of County Bank. Barr said that could take a couple of months.

John and Andrena Paladini of Modesto, longtime customers of County Bank, said Monday they weren't worried about the money they had in the bank because it was insured. But they were worried about the future of bank employees at the downtown Modesto branch.

"We really like the people here. They know your name and really make you feel comfortable," John Paladini said. "We'll stay here as long as the service stays the same."

Employees working as temps

County Bank is the ninth bank to fail in the nation this year, and the third in California.

Its closure came as little surprise Friday after County Bank reported a week earlier that its losses linked to bad real estate development loans had swelled to about $96 million. It reported its first an-nual loss of $3.7 million at the end of 2007.

Rob Thorson, chief financial officer for Westamerica, said his company has had a presence in the Northern San Joaquin Valley for many years and knows what serv-ices the region's banking customers need and want.

Thorson said Westamerica bid on County Bank through the FDIC's marketing program for failing financial institutions because it was a good fit for his company. He said Westamerica specializes in small business and professional loans, much as County Bank did.

Westamerica also is active in providing support to farmers and agriculture-related businesses, Thorson said. "We are very positive about ag lending."

Thorson stressed that West-america is focused on customer service and will make its decisions about integrating County Bank into its system based on what's best for customers.

Westamerica has branches in Modesto and other cities where County Bank also has offices. Thorson wasn't sure how long it would take for Westamerica to determine which branches it will keep open and which ones it will close.

As for the fate of County Bank employees, Thorson said Westamerica will evaluate all of them. He said Westamerica wants employees its customers are the most comfortable with as well as those with strong networks in their communities.

Barr said County Bank employees are working for a temp agency used by the FDIC for up to 90 days while Westamerica determines who it will hire. Westamerica will reimburse the FDIC for any costs associated with the temp agency's services, Barr said.

It was uncertain what will happen to the staff at the downtown Modesto branch, where Tom Norquist of Tenney A. Norquist Air Conditioning could be found Monday afternoon.

"They've always treated us well. I just stopped by to say hello and let them know we are thinking of them," the longtime Modesto businessman said.

Bee Business Editor David W. Hill can be reached at dhill@modbee.com or 578-2336.