The Collapse of County Bank

Yssterday was the last day for the major bank in the area... County Bank

The state regulators came in and are deep into auditing the books this Saturday. The Sun Star claims that there were 160 suits that arrived at the bank yesterday to close it down. It will reopen on Monday as part of another named bank.

The local investers have lost their perverbal shirts. It is not a small bank. It had grown to branches in 16 different cities in three states. This bank started in Merced and retained its headquarters in Merced. It was established in 1977. It was the keystone to downtown development. It bought up old buildings downtown and made two story new buildings in their place. It even constructed its own two story parking facility.

But who could blame them going under? Merced has been labeled ground zero for the foreclosures of mortgages and the Feds are not really dealing with that level of problem with their financial ballouts.. at least for now. A large share of County Bank's loans were for small business development. That could mean strip malls which have lost their big box tennants or it could be small dairies that are reeling from the drop in the price that is paid for milk.

The recent news was a major topic at the local Starbucks this morning that I encountered on my morning walk. Everyone was talking about the community hit. The investors are the ones that will get it. One guy mentioned that he bought County Bank stocks when they were 4 dollars a share. He thought that it was a good buy then. Now they are worth 26 cents a share and maybe not even that. Someone else at the table mentioned that his 401K had bottomed out to zero. That was pretty incredulous to the others.. how could an investment be worth 0? It has and it is. One of the engineers at the table was talking that last year he had 6 good projects going on at one time. Now he is lucky to have one. Sign of the times.

I saw on the card that the manager of the Starbucks was also a classroom teacher for Starbucks. I asked him how the Starbucks classes are going.. rmembering the book I read that Kelly sent to be via audio about how Starbucks had saved this older guy's life by giving him worth and redefining his objectives and learning some effective people skills.. with benefits. He said that his classes were going well but their were fewer students becuase Starbucks is closing outlets all over.

We should all feel lucky that we have jobs.

: ) Pat