The late Sonoma Valley Bank offered exceptional customer service, and happily most of those smiling faces are still on the job at Westamerica Bank.
That spirit is demeaned somewhat by finger pointing from the defunct bank’s board of directors.
The government is a popular target for many of life’s woes but, quite simply, it is not in the business of closing down healthy banks.
“We were in shock as the FDIC arrived as receivers on Friday, August 20,” reads an open letter signed by nine board members. What is shocking is that the seizure could have been any form of surprise: the deadline, negotiated in part by bank officials, had been set in April after the FDIC declared that the bank’s “condition continues to deteriorate… management has not demonstrated the ability to return the bank to a safe and sound condition.”
In its letter, the board lamented that it was not given more time to find a white knight investor. But it was clear that the regulatory agency in charge does not as a rule grant extensions, a former federal regulator told The Sun.
SVB officials knew the laws and directives the regulators were giving them long before the Prompt Corrective Action document and the Cease & Desist Orders were made public earlier this spring, the source said.
True, the bank showed a profit of approximately $2 million for the second quarter. But with $40 million in lingering nonperforming loans, and key measures significantly beyond peer comparisons, it is difficult to project, as the board letter did, “good liquidity, strong assets, and profits” turning the corner on an annualized basis through year-end.
Investors certainly did not share the board’s confidence; the stock price had tumbled to under a dollar the week the bank closed.
Sonoma Valley Bank made some risky decisions – what business doesn’t? — that turned out badly. Like it our not, performance levels were imposed but could not be met. No need to spin it any other way.
In a quote more in keeping with the bank we remember, the letter called SVB “one of the most generous, helpful, caring and supportive institutions in town.” Agreed. Here’s hoping Westamerica lives up to the lofty reputation of its predecessor.
WestAmerica will NEVER EVER be able to provide the customer service Sonoma Valley Bank Provided.
Which is exactly why what SVB’s management did to destroy the bank by loaning a major chunk of the bank’s money to one shady entity was so egregious.
In the process, they undid any prior good services they had established in the community.
How unfair.
The rug was pulled out on innocent people because of greed and stupidity, it would appear.