Oregon Public Broadcasting

Stress in the region's banking industry continues. The FDIC and state regulators have put four more Washington banks and another Oregon bank on a tighter leash. Correspondent Tom Banse reports.

All five banks received sharply worded letters from the feds.

They're ordered to correct “unsafe or unsound banking practices.”

The recipients include Bend, Oregon-based Bank of the Cascades, Twin City Bank of Longview, Washington, Anchor Bank of Aberdeen, the Bank of Tacoma, and Arlington, Washington-based North County Bank.

Washington State Division of Banks Director Brad Williamson says customers should not do anything rash since FDIC insurance protects their deposits up to $250,000.

Brad Williamson: “It's very rare for banks who receive formal enforcement actions to fail immediately. In large measure, it's going to be business as usual at these banks. Obviously, they have to take some corrective action, often with respect to asset quality and capital.”

All of the banks in question are saddled with heavy loan or investment losses. Some have started to cut branches or personnel to reduce overhead. Another common step is to reorganize the lending staff.