A Lacey-based bank holding company, Anchor Bancorp, has passed a milestone in putting its troubled history behind it.
The company, which operates the 13-branch Anchor Bank network in Thurston, Mason, Grays Harbor, Lewis and Pierce counties, is no longer subject to a cease and desist order that it entered into in 2009 with the Washington Department of Financial Institutions and the Federal Deposit Insurance Corporation. That order was lifted Wednesday.
That order, which gave the two regulatory agencies a tight supervisory role over the banking company’s business, has been replaced by a much less strict supervisory directive with the Department of Financial Institutions, the bank holding company announced Friday.
The original order was entered into because Anchor, like many banks, found itself holding too many risky or bad loans relative to its capitalization when the recession began. The collapse of the real estate market five years ago affected the bank badly.
Anchor Chief Executive Officer Jerry Shaw said Friday the company has successfully raised $25 million in new capital, shrunk its troubled loan portfolio and reduced its own borrowings to comply with the conditions of the cease and desist order. The bank closed some unprofitable branches in Walmart stores and has hired new personnel to supervise its lending and credit.
The cease and desist order was lifted as a result of May examination of the bank’s finances.
“A little self-congratulation is in order,” said Shaw. “But we still have a ways to go.”
The speed at which the banking company is able to exit supervision, he said, will in large measure depend on how fast or slowly the economy revives. Supervisory directives are typically removed within a year or two if a bank continues to make progress, he said.
“We are pleased with the lifting of the order, which reflects the results of our hard work and determination in improving credit quality and reducing nonperforming assets,” said Shaw. “We will continue to remain focused on improving our operations and returning the Bank to profitability.”