Jun. 25--Another bank has announced plans to expand into Merced to help fill the chasm left by the demise of County Bank earlier this year.

Central Valley Community Bank President and CEO Daniel J. Doyle said Wednesday that a full-service branch would open in the Bear Creek Galleria in August. The space used to be occupied by Washington Mutual.

Rabobank N.A. has opened two branches in Merced, and one each in Atwater and Los Banos.

While establishing a Merced branch has been part of Central Valley Community Bank's longterm strategy, the failure of County Bank and its takeover by Westamerica left Doyle believing that this was the best time to expand.

"In reality, there will be some void with the loss of County Bank," he said from Fresno. "We hope to fill some of that."

In mid-2008, County Bank had 38 percent of Merced County's banking market share, representing $676 million in deposits. It was closed in February and its business was transferred to Westamerica.

To boost the transition, Central Valley Community Bank tapped three former County Bank employees to run the branch.

Susan Armstrong will serve as vice president branch manager, Tom Crawley will serve as vice president commercial loan officer and Michael German will serve as assistant vice president/SBA loan officer.

Central Valley Community Bank has $760 million in assets, or loans, and $630 million in deposits. The bank, based in Fresno and traded on NASDAQ, was founded in 1979. The Merced office represents its 16th Valley branch.

Doyle joined the bank in 1998, a time when it was distressed by a loan portfolio that was hammered by a real estate downturn. He's kept the bank from investing too heavily in real estate as a result. Agriculture loans represent about 10 percent of its portfolio. Most lending goes to small businesses.

The bank accepted $7 million in Troubled-Asset Relief Program funding last year for four reasons, he explained.

One is that the market wanted to know what banks were on solid footing. The program was one way the U.S. Treasury Department could show confidence in such institutions.

Second, Central Valley Community Bank just finished its acquisition of Stockton's Service 1st Bancorporation and saw the program as a way to boost its capital.

Third, the country's economic uncertainty led the bank to believe it was wise to have some extra cash on hand.

Fourth, the Federal Desposit Insurance Corp., which regulates the bank, thought the added cash would be good in case Central Valley Community Bank was tapped to take over a troubled bank. So far no attractive opportunities have presented themselves, Doyle said, though the bank is on the FDIC's list of suitors.

A June 19 investment report by Sandler O'Neill + Partners gave the stock a hold recommendation.

"Despite facing some real challenges related to market conditions," the analysts wrote, "we believe the company should survive the cycle and ultimately thrive once the economy stabilizes and starts to recover."

Reporter Scott Jason can be reached at (209) 385-2453 or sjason@mercedsun-star.com.

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