Anchor Mutual Savings Bank, better known as Anchor Bank, continues to move in the right direction after federal and state regulators ordered the company this year to change the way it does business, the bank's president and chief executive said Friday.
“It has some specific hurdles,” Jerry Shaw said about the regulators’ enforcement action, “and we have met all those hurdles to this point.”
He was referring to a cease-and-desist order that the bank received in August from the Federal Deposit Insurance Corporation and state Department of Financial Institutions. Such orders have become increasingly common in this state because of the slower economy and its effect on the residential and commercial real estate markets. This year, about 19 banks in the state, such as Frontier Bank, Sterling Savings Bank and the former Venture Bank, have been operating under enforcement actions taken by federal and state regulators, according to information on the FDIC Web site.
Venture Bank was closed by regulators and sold to First-Citizens Trust and Bank Co. of Raleigh, N.C., on Sept. 11.
Department of Financial Institutions director Scott Jarvis said Friday that if there was one common theme for many community banks in the state, it’s that they have been hit by the slower commercial real estate market.
Shaw, too, said the bank’s troubled assets primarily are in construction and land-development loans. At the end of the third quarter, the bank reported its nonperforming assets totaled $56.5 million, or 9.2 percent of its total assets, according to FDIC and Securities and Exchange Commission information. Anchor Bank’s troubled assets are closely tied to real estate markets in the Portland/Vancouver area and in Pierce County, Shaw said.
Anchor Bank, based in Aberdeen, was formed in 1907 and has grown to operate 16 branches, including two locations in Olympia, one in Lacey and one in Yelm.
Today, the bank has about $600 million in assets and employs 170 people, he said. The bank has not had to cut staffing or close branches as a result of the cease-and-desist order, but it is trying to sell or auction off problem assets, such as vacant lots and single-family residences, Shaw said.
The bank also could soon raise up to $38.3 million in a public offering of its stock, according to an amended SEC filing last month.
Shaw said the bank survived the savings and loan crisis in the 1980s and will survive the current downturn too.
“The good news is that we recognized our problems early on and that’s going to help us,” he said.
Meanwhile, Sterling Savings Bank of Spokane, which has been operating under a cease-and-desist order since October, has been ordered to raise $300 million by Dec. 15.
Sterling announced this week that it now expects to raise the funds in the first quarter of next year.
“Sterling is working closely with its regulators, who have demonstrated flexibility with other banks that were showing meaningful progress in their capital-raising efforts,” said Greg Seibly, chief executive officer of Sterling Financial Corp., the bank-holding company for Sterling Savings.
As for when the economy might improve, that likely won’t happen until there is job growth and more consumer confidence, Jarvis said.
“People need money and they have to be confident before they spend it,” he said.
Rolf Boone: 360-754-5403