Business

Westamerica lays off dozens of former County Bank employees

Westamerica Bancorporation laid off more than three dozen former County Bank workers Wednesday, beginning what some expect will be a drastic downsizing of the failed Merced institution's local staff.

Several former and current workers said that 38 people were fired, though that figure couldn't be verified by Westamerica.

Chief Financial Officer Rob Thorson, its spokesman, didn't return repeated phone calls for comment.

Workers in the human resources, credit administration, marketing, risk management and training departments were fired in the morning, one employee who still has a job said. The layoffs were spread through Merced and Atwater.

"There's no mood," he said. "It's just 'When's the bleeding going to end?'"

Many suspect there'll be another round Friday, though no one has heard what positions might be cut, he said, asking that his name not be used because he's afraid of retaliation for speaking out.

Westamerica, based in San Rafael, took control of County Bank three weeks ago after the Federal Deposit Insurance Corp. declared it a failure. The bank's 500 workers were rehired through a temp agency that contracts with the FDIC.

Before this round of layoffs, about 150 County Bank employees worked in the Merced area, spread among branches and corporate offices. About 70 work at the former downtown headquarters.

Westamerica has about two months more to decide which of the 39 branches that belonged to County Bank it will keep open. No branch decisions have been made public.

The fired workers were given instructions on how to apply for unemployment benefits, said one employee who was dismissed.

The worker asked that his name not be used because the banking industry is small and it could hurt future employment chances.

They won't receive any severance, which riles many workers who believe Westamerica should take care of County Bank's former staff because it's being helped by money from the federal bank bailout, or Troubled Asset Relief Program.

Westamerica received $83.9 million in TARP funding last week, though in past statements it said the infusion was unrelated to the County Bank acquisition.

When County Bank dismissed about 20 workers in September 2008, it offered them a minimum severance of six weeks salary and benefits.

This is the first round of mass layoffs in County Bank's takeover, though several top-level executives were dismissed the night Westamerica stepped in.

Westamerica officials have said County Bank's branch offices were among the most appealing assets in the deal, suggesting that they intended to keep many of them.

But it has made no guarantees, and in County Bank communities where Westamerica already has branches, closures may be inevitable.

Before the takeover, Westamerica already had 18 branches scattered across Merced, Fresno, Kings, Madera and Tulare counties.

Its main Merced branch is one block from what was County Bank's downtown headquarters.

Before its failure, County Bank was by far the biggest financial institution in Merced County and the only publicly traded company with headquarters here. It had 39 branches in 13 California counties, most of them in the Central Valley.

A community hallmark since 1977, County Bank had battled for months to stay afloat. Its financial condition began spiraling downward with the collapse of the San Joaquin Valley's real estate market.

The bank reported its first annual loss, $3.7 million, at the end of 2007. Since then it's struggled to find enough investors to offset its mounting troubles.

It announced early this month that it lost $96 million last year.

Before its takeover of County Bank, Westamerica was the seventh-largest commercial bank headquartered in California, with 86 branches in 21 Northern and Central California counties.

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

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