City Bank has signed an agreement with the Federal Deposit Insurance Corporation (FDIC) and the State of Washington Department of Financial Institutions (DFI). The agreement, called a Cease and Desist Order, focuses on the steps the FDIC and DFI have identified as necessary to correct deficiencies identified in the bank’s most recent regulatory examination conducted as of December 31, 2008.
The bank says that the agreement does not impact the bank’s deposit customers since the FDIC deposit insurance coverage limits of $250,000 per account have been extended to 2013.
The agreement addresses organizational and operational issues including the key elements of the bank’s efforts to deal with a high level of non-performing residential construction loans as well as it calls for a plan for the orderly reduction of non-performing loans and foreclosed real estate.
Conrad Hanson, President and CEO of City Bank, said: “The Agreement does not reflect any new developments impacting our business. We recognize that these changes are necessary and we have made significant progress on these issues throughout 2009.”
