 County Bank was under a full head of steam in 2007. Headquartered in the Central Valley town of Merced and celebrating its twentieth anniversary, the bank had 39 retail branches and 4 commercial offices in Stockton, San Jose, Sacramento, and San Francisco. It had a diversified loan portfolio, little community bank competition, and recently had extended its product line with two strategic acquisitions: a factoring business and an asset based lending portfolio. It asked us to exploit its commercial beachheads and pave way for its expansion into Kern County, the Valley’s largest population center.
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 Our quantitative and qualitative research discovered numerous dysfunctions within the bank, as well as a shocking lack of consumer awareness throughout its existing and potential market area. Separation of commercial and retail offices promoted poor intra office teamwork and created a two-bank culture that delivered an inconsistent brand experience. Rather than finding the equity to keep their momentum moving, then, County Bank was confronted with deeply rooted problems that had been overlooked in their rush to market dominance.
Our findings were only a first glimpse of what turned out to be the financial meltdown of 2008. Although County Bank was not a sub prime lender, real estate speculation throughout the Central Valley caused all property values to plummet, leaving County Bank short on reserve capital. The bank was closed by the U.S. Treasury in March 2008. Had their brand strategy been implemented earlier, there is no question subsequent investigation would have at least warned of the dangers ahead. |
