Feb. 7--MERCED -- County Bank, reeling since the real estate market collapsed in the Northern San Joaquin Valley, was shut down late this afternoon by state regulators, the Federal Deposit Insurance Corp. announced.

The FDIC agreed to sell bank's deposits and branches to Westamerica Bank of San Rafael. Merced-based County Bank's 39 offices will reopen as branches of Westamerica Bank.

The California Department of Financial Institutions was the agency that closed 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 apparently had worked out a deal in advance to sell the bank's assets to Westamerica.

The move comes a week after County Bank reported its losses linked to bad real estate development loans had swelled to about $96 million. It reported its first annual loss, $3.7 million, at the end of 2007.

County Bank branches that have Saturday hours will be open as usual; the remaining branches will reopen Monday. County Bank depositors automatically become Westamerica Bank customers.

Deposits will continue to be insured by the FDIC, so customers don't need to to change their banking relationship to retain their coverage, federal officials say. Customers of both banks should continue to use their existing branches until Westamerica Bank can fully integrate the deposit records of County Bank.

Over the weekend, depositors of County Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

Customers who have questions about closure and sale of County Bank can call the FDIC toll-free at 1-800-591-2820. The phone number will be operational at 9 p.m. Friday, Saturday from 9 a.m. to 6 p.m., Sunday from noon to 6 p.m. and thereafter from 8 a.m. to 8 p.m.

People can also get information at the FDIC's Web site at www.fdic.gov/bank/individual/failed/county.html.

The bank said last week that it expected its capital ratios would fall into the "undercapitalized category" based on federal guidelines. It said it had to raise $75 million "in the near future" to reach acceptable capitalization levels. Without it, regulators would step in.

At the same time, Capital Corp. said its solvency depended mainly on "the bank's ability to continue as a going concern." It expressed "substantial doubt" about whether it could.

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

-----

To see more of The Modesto Bee, or to subscribe to the newspaper, go to http://www.modbee.com/.

Copyright (c) 2009, The Modesto Bee, Calif.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NASDAQ-NMS:CCOW, OtherOTC:WACC,

A service of YellowBrix, Inc.