Worry follows fed's takeover of Wash. bank

VANCOUVER, Wash. — Many Bank of Clark County business customers were reeling on Monday after the bank's takeover by state and federal regulators.

"It's all just a little bit scary," said Courtney Staehely, 29, a client of the Bank of Clark County since she opened her downtown Vancouver cafe, Dolce Gelato, in 2005. "This doesn't happen to a bank every day."

The Vancouver-based Bank of Clark County was shuttered by state regulators Friday for inadequate capital and liquidity, and seized by the Federal Deposit Insurance Corp.

Roseburg, Ore.-based Umpqua Bank then purchased the bank's roughly $209 million in insured deposits and $30 million in assets. The Bank of Clark County's two former branches opened Tuesday as Umpqua Bank branches.

Beyond that, clients weren't sure what was happening or what to expect after the takeover of the bank, which concentrated on business banking and lending to local companies, builders and land owners.

Some local business owners worried about the economic effects of $39.3 million in uninsured Bank of Clark County deposits that Umpqua Bank didn't take over. The deposits were held in 138 accounts valued at more than $250,000.

"That's money that has vanished from our local community," said Terry Wollam, a residential real-estate agent with Re/Max Equity Group in Vancouver.

Wollam blamed the Bank of Clark County's failure on slumping home sales, which dropped 32.6 percent in 2008. A total of 5,133 new and existing houses were sold last year, down from 7,613 homes sold during 2007. Local homebuilders also generated 52.4 percent fewer building permits for single-family home construction in 2008, according to county records.

Other developers wondered why billions of dollars in federal bailout money didn't save the Bank of Clark County. Local builders were keenly aware of the bank's recent plea for capital, said Jon Girod, a Vancouver homebuilder and owner of Quail Homes.

"I knew they were hunting deposits down. You would have thought they'd have had more time to work it out," he said.

Girod blamed plummeting regional land values for the Bank of Clark County's collapse.

"The rule is, [land owners] have to mark your assets down to the current value," which has lowered the value of vacant housing tracts all over the county, Girod said.

That's when banks ask property owners, which in many cases are homebuilders that have not been able to sell any new product, to make up for the difference in land value.

"These are arbitrary numbers, because the buyers aren't out there," Girod said.

Still other builders say they are interested in the land left on the Bank of Clark County's books through default. Michael Shanaberger, sales and marketing director for Manor Homes, a Vancouver-based homebuilder, said his company will keep an eye out for bargain-priced subdivisions that have been repossessed. "All the streets are in and the underground work is done, they are just vacant," he said. "Our position is to just lay and wait."