For the third time this year, a Snohomish County-based community bank has been reprimanded by the federal government.
On Thursday, Lynnwood’s City Bank said it had received a cease-and-desist order from the Federal Deposit Insurance Corp. and the State of Washington Department of Financial Institutions.
The bank had said in late March that it expected federal orders after posting a $60.8 million loss in 2008. At that time, 62 percent of City Bank’s loans were tied to residential construction and development.
Frontier Bank and Mountain Pacific Bank, both based in Everett, have received similar orders from the FDIC this year.
City Bank said Thursday that it has been aggressively dealing with the impact of the recession and the slowdown in residential housing sales in 2008. The bank has been working with the FDIC and the DFI to address the issues affecting it.
“The Agreement does not reflect any new developments impacting our business,” said Conrad Hanson, City Bank president and CEO, in a statement. “We recognize that these changes are necessary and we have made significant progress on these issues throughout 2009.”
Deposits of up to $250,000 that City Bank customers have with the Lynnwood-bank are still insured with the FDIC.
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