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 substantially all the assets and assume substantially all the liabilities of Sonoma Valley Bank. The California Department of Financial Institutions declared Sonoma Valley Bank closed today and appointed the FDIC as receiver.
“We are pleased to welcome the customers of Sonoma Valley Bank as valued customers of Westamerica. Westamerica assumed substantially all deposits of Sonoma Valley Bank. Customers can rest assured their deposits are safe and sound at Westamerica, which is well-capitalized and highly profitable,” said Chairman, President and CEO David Payne. “We will be working diligently with employees of the former Sonoma Valley Bank and the FDIC to ensure a smooth transition of customer accounts to Westamerica. Delivering superior customer service is our objective. Sonoma Valley Bank customers will benefit from Westamerica’s broader branch network throughout Northern and Central California, including our ten branches in Sonoma County,” added Payne.
Westamerica Bank’s capital significantly exceeds regulatory requirements to be considered “well-capitalized.” Westamerica Bank estimates $15 million of capital is required relative to the acquired assets in order to meet the most stringent regulatory “tier one leverage ratio.” At June 30, 2010, Westamerica Bank’s capital exceeded the “well capitalized” requirement for the “tier one leverage ratio” by $145 million. As a result, Westamerica Bank does not require additional capital relative to the acquired assets. Westamerica’s profitability further supports its capital levels; Westamerica Bancorporation’s second quarter 2010 net income was $24 million, of which $10 million was distributed to shareholders in the form of a dividend.
At June 30, 2010, Sonoma Valley Bank reported deposits totaling $256 million and loans totaling $241 million. Westamerica Bank assumed only the assets and liabilities of Sonoma Valley Bank. Assets, liabilities, and common stock of Sonoma Valley Bank’s former parent company Sonoma Valley Bancorp have not been purchased or assumed by Westamerica Bank or Westamerica Bancorporation.