It’s business as usual, but the business has changed hands.
Founded in 1988, the publicly owned Sonoma Valley Bank grew to three locations and was trading as high as $31 a share three years ago. Last week, federal regulators announced it had failed, and San Rafael-based Westamerica Bank was taking over.
“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.
The 50-plus employees are more vulnerable. Westamerica CFO Robert Thorson said the company is in the process of interviewing every current employee by August 27. Asked about layoffs, Thorson said, “it’s too early to know. But the goal is a high level of retention.”
Staff cuts are likely at the upper management level, a former federal regulator told The Sun. Jobs that can be consolidated at corporate headquarters, such as human resources, IT services and auditing, are also common targets.
Thorson said the priority amid the transition is to deliver customer service. With a steady flow of customers coming into the branches to find out what’s going on, “hearing it face to face from someone you know,” is invaluable, he said. “We want as minimal an impact as possible.”
Thornton said Tuesday his sense was that the transition was moving smoothly. “It feels like the customers are being reassured.”
A “welcome’ letter will be mailed to bank customer on Friday, answering some key questions and letting customers know that it’s “business as usual,” he said.
SVB cards are already accepted at all Westamerica ATMs. Other changes, like the look of checks and statements, will be phased in more slowly.
Thorson acknowledged Sonoma Valley Bank’s strong commitment to local non-profits and other community groups. “There was a very strong tie-in with the community,” he said. ‘We strive to operate in the same manner. Our focus is on small business banking, that’s out niche. You can’t have that without being connected to the community.”
Sonoma Valley Bank had been on federal notice since May that major loses on bad loans had left it with insufficient reserves. The bank failed to meet a government directive to raise $20 million by August 15.
To keep deposits safe and insured, the FDIC then brokered the deal with Westamerica, which has nearly 100 branches throughout Northern and Central California.
Some 2.2 million shares of SVB stock are now essentially worthless and the board of directors has been dissolved.