Cascade Bancorp in agreement with FDIC

Cascade Bancorp received a cease and desist order from the Federal Deposit Insurance Corp. and the Oregon Division of Finance and Corporate Securities, and has agreed to take certain measures to strengthen the Bank of the Cascades' (BOC) financial condition and operations, the Portland Business Journal reported last week.

The measures stem from a routine regulatory exam completed in February. Patricia L. Moss, president and CEO, told reporters that the issues identified in the regulatory order largely reflect actions already well underway by the board of directors and management.

Those measures include taking steps to improve capital position, maintaining liquidity ratios, reducing the level of non-performing assets, and reducing loan concentrations in certain portfolios. The bank also agreed to improve management practices and to assure that its allowance for loan losses is maintained at an appropriate level, the Portland Business Journal reported.

Moss told The Nugget that the health of the Sisters branch of Bank of the Cascades is not in question.

"The Sisters branch is in no way at risk," Moss said. "That is a wonderful community bank for us. We do a tremendous amount of business out of Sisters."

Moss acknowledged that times have been tough on community banks, and she recognized that there have been rumors circulating about the potential demise of Bank of the Cascades.

"Certainly some of the rumors locally have been that the bank is in danger of closing, and that is not true," she said.

Plunging real estate values in Central Oregon have hurt the bank, but Moss said the Sisters Country has not contributed significantly to the bank's problems.

"We do not have significant exposure in non-performing loans or foreclosed properties in Sisters," Moss said.

Eric Dolson, former publisher of The Nugget, is both a commercial customer of the bank and an investor in the bank. He has confidence in Bank of the Cascades' ability to weather the current rough economic climate.

"I believe that they are going to survive and be stronger," he said. "I think the culture of the bank is community-oriented... I think they have earned loyalty from the Central Oregon community. It's at least true in my case and I believe it to be generally true."

Dolson said that Bank of the Cascades is "divesting itself of loans that were commonly made by all banks between 2004 and 2007 and as a result I think (BOC) going to be in a better position on the back side."

Moss said that BOC is changing with the times.

"We'll have to be leaner and meaner and more efficient," she said. "In order to accomplish our community mission, we'll have to have a different risk portfolio going forward."