Lots of government people in suits showed up after the Bank of Clark County closed for business this evening. It’s not good.
The Bank of Clark County became the first locally based bank to fail in recent memory, following a ruling by state regulators on Friday that the Vancouver financial institution did not have adequate cash to stay in business. Its two branches will open Tuesday under the control of Umpqua Bank, which has assumed all of its roughly $209 million in insured deposits.
Sounds pretty serious. According to the Columbian, the state closed the bank and FDIC took receivership. The newspaper reports that there is over $39 million in uninsured deposits.
Several top Bank of Clark County executives, including President Mike Worthy, were relieved of their positions on Friday.
The rest of the bank’s 91 employees, based at two branches, will continue to work for Umpqua Bank, which still plans to open a branch next to Esther Short Park this summer.
“Employees heard the news that their bank has inadequate capital and their bank was declared closed, and we walked in the room five minutes later to tell them were taking over,” said Sullivan.
He entered with a phalanx of bankers and regulators in suits and ties that converged on 1400 Washington St. just after the 6 p.m. close of business on Friday.
Bank of Clark County was basically a local bidness guys and gals bank, started by some local movers and shakers in the late 1990’s.
The bank grew quickly as it aggressively courted business borrowers and developers during Clark County’s building boom. But when the housing market soured, so did its finances, as did the finances of most other banks in the region.
Until recently, it was clear that the Bank of Clark County had lost money on construction and development loans, but not how bad things had become.
“The last number of months they saw tremendous decreases in some of the values in their loan portfolio,” said Brad Williamson, director of the state Department of Financial Institutions banking division. “That requires a bank to make tremendous loan loss provisions. If the bank does not have enough in earnings, it comes out of its capital.”
This is quite the blow to certain aspects of the Clark County economy. The credit crunch and housing bubble deflation were already putting a severe strain on developers, and now their main local bank had to be seized by regulators.
It’ll be interesting to see what details emerge.
The theory behind Wingnut Whack-O-Nomics is that bank failures are self-correcting because they make people be more careful next time.
An analogy is that allowing untrained and unlicensed people to perform surgery is self-correcting because the patients won’t use an unlicensed surgeon again.
The theory behind liberal economics is that you have to regulate capitalism or it’ll destroy itself. Conservatives put America through the Great Depression to teach us this lesson. Not content with that, conservatives put us through the Financial Panic of 2008 to teach it to us again.
Business Week reports that Boeing “is rethinking the global outsourcing model” that has delayed the 787 Dreamliner. According to BW, “The company is making plans to bring more work back in-house.”
(quoted under fair use)
Roger Rabbit Commentary: That’s a step in the right direction. In the same vein, Alaska Airlines should stop outsourcing baggage handling to gangs and rehire its union baggage handlers.
Other than a fucking Rabbit – Who gives a shit!
@3
Funny how that whole outsourcing thing often ends up biting the companies that try it in the ass. Particularly with complex high-tech products like airliners or software.
@2 I’ll never forget Barney Fwank just in July
of 2008 saying everthing with Fannie and Freddy
was just fucking fine. Is this the liberal
economic oversight you are referring to?
Atta boy!
I worked for a high-tech manufacturing company back in the 80’s when they adopted with a great deal of fanfare the “just-in-time manufacturing” system which had recently become all the rage. This basically consisted of outsourcing the responsibility for scheduling and warehousing of parts to the suppliers.
The very first JIT delivery arrived on the dock and was unpacked under the smiling gaze of the assembled senior managers–and promptly had to be marked “RETURN TO VENDOR: WRONG PARTS”.
Gee whillikers….the government has been throwing hundreds of billions of dollars at the big banks to “bail them out”…and here a little one gets into trouble and it’s bye-bye time.
I wonder what the criterion is for determining whether or not a particular institution gets a “thumbs-up” or a “thumbs-down”. Here are some possibilities:
Whether the institution’s CEO is an ex fraternity brother of Hank Paulson.
Whether the institution’s CEO is a member of Skull & Bones
Whether the institution threw in the towel early, or had the guts to try and stick it out and solve its own problems, in which case it should be soundly punished for making the others look bad.
Whether the institution mainly serves ordinary people, instead of shuffling the assets of rich people and the other institutions they own.
Whether it’s just beforethe new administration takes office, and the Bush folks want to sit drinking expensive Scotch and laughing their asses off while Obama struggles with a run on the banks.
Any other suggestions?
Must be the invisible hand giving the phony free marketers the finger.
Knowing who the directors of this wanna B Bank were–it is no big surprise that they were attempting to be the big boys in town. Writing checks with their mouths that their wallet couldn’t cover!!! Their huge ego’s and arrogance is their dimise.. Maybe you guys should stick to auto repair and screwing up the port of Vancouver==instead of costing innocent people millions of dollars. The lawsuits aren’t gonna be pretty~~~ Gno$$$