Bank of Whitman and the Federal Reserve Bank of San Francisco have reached an agreement that imposes a multitude of requirements on the Colfax-based institution, including some that must be met within 10 days of its signing on July 8.
The Federal Reserve disclosed the agreement Wednesday. It is one of many – 17 in July alone – the regulator has reached with banks around the country struggling to recover from significant loan losses.
The agreement with Bank of Whitman, which has been majority-owned by its employees since 2008, addresses lending practices, capital needs and management, including “a realistic and comprehensive budget for calendar year 2010.”
The San Francisco overseers also want the bank to immediately charge off or collect assets that were classified as a loss during their September 2009 examination of the bank. Future charges must be taken within 30 days of an examination.
The examinations are confidential.
As of March 31, Bank of Whitman reported assets of $786.5 million, deposits of $660 million and loans of $620 million.
Although capital ratios, the measure of a bank’s soundness, were near compliance with federal requirements, the agreement directs the bank and Whitman Bancorporation to submit plans that assure adequate capital in the future.
Bankrate.com, based on Dec. 31 conditions, said Bank of Whitman nonperforming assets were substantially higher than standard and questioned the quality of the assets. Loss reserves, the service said, were substantially below standard. The bank lost almost $17 million in 2009 but reported a $3.1 million profit for the first quarter of 2010.
The bank issued a press release acknowledging the agreement with the San Francisco Fed, calling it “a road map to improving our business.”
“Our vision for the future is positive,” the statement said.