(Source: Business Wire)
Westamerica Bancorporation (NASDAQ: WABC) announced today its wholly-owned subsidiary bank, Westamerica Bank, entered an agreement with the Federal Deposit Insurance Corporation ("FDIC") to purchase the assets and assume the deposit liabilities of County Bank ("agreement"). The California Department of Financial Institutions declared County Bank closed today and appointed the FDIC as receiver. Thereafter, Westamerica Bank signed the agreement with the FDIC.
"We are pleased to welcome the customers of County Bank as valued customers of Westamerica Bank. We will be working diligently with County Bank employees and the FDIC to ensure a smooth transition of customer accounts to Westamerica Bank," said Chairman, President and CEO David Payne. "Delivering superior customer service is our objective. Westamerica Bank has assumed all deposits of County Bank. Customers can rest assured their deposits are safe and sound at Westamerica Bank, which is well-capitalized and highly profitable," added Payne.
Westamerica Bancorporation will invest capital of approximately $93 million into Westamerica Bank to maintain Westamerica Bank's well-capitalized condition after purchasing County Bank's assets from the FDIC. Westamerica Bancorporation has received preliminary approval to receive approximately $83 million from the United States Department of the Treasury ("Treasury") under the Troubled Asset Relief Program's Capital Purchase Program ("TARP"). Westamerica anticipates closing the TARP transaction on or about February 13, 2009. Westamerica will issue the Treasury preferred stock yielding five percent per annum and approximately 300 thousand warrants to purchase Westamerica common stock at a price based on Westamerica's average closing price for the 20 days preceding the TARP closing date.
At December 31, 2008, County Bank reported deposits totaling approximately $1.3 billion. Under the terms of the agreement, Westamerica has the option to purchase, or to assume leases on, County Bank's 39 branches. Many of Westamerica's 86 branch locations are in close proximity to County Bank branch locations.
At December 31, 2008, County Bank reported loans totaling approximately $1.2 billion. Under the terms of the agreement, net loan losses and losses on repossessed loan collateral of up to $269 million will be shared with Westamerica absorbing 20 percent of the losses and the FDIC absorbing 80 percent of the losses. Any losses in excess of $269 million will be shared with Westamerica absorbing 5 percent of the losses and the FDIC absorbing 95 percent of the losses.
