Top execs leave Bank of Whitman

Bank under operating orders from state, feds

Jim Tribbett, chief executive officer, and Craig Conklin, chief lending officer, stepped down from their positions with the Bank of Whitman Jan. 14. The bank is currently operating under orders from state and federal regulators.

Bill Knox, chief financial officer, said Tuesday Tribbett and Conklin decided to “pursue other opportunities.”

Knox said their departures were unrelated to state and federal orders that the bank change some of its management practices.

Bank of Whitman has been operating under a consent order with the state Department of Financial Institutions since Oct. 22. The consent order states the bank has not necessarily practiced any unsafe or unsound practices. The order was issued after a state examination of the bank in March 2010.

The Federal Reserve Bank of San Francisco also imposed requirements on the bank in an agreement reached July 8 that was based on the fed’s September 2009 examination.

Under terms of the state order, the bank’s board of directors was to hire a third party study of its management and personnel structure.

Knox said the management study was confidential to members of the bank’s board of directors.

The board must also show to the state’s satisfaction that top leaders were appropriately qualified to fill their positions.

“Often the board gets the study and reviews to determine what skills they will need in those officers for future stability,” said Brad Williamson, director of the state’s Division of Banks.

One of the primary concerns in the state report was the bank’s loan policies. Williamson noted the bank’s exposure to losses on commercial real estate loans was a reason for the state’s order.

Sinking values on commercial real estate took a toll on balance sheets of banks across the United States. The Federal Reserve Bank of San Francisco’s third quarter report showed 14 percent of commercial loans made by banks were more than 90 days past due.

“All banks around the country are feeling the pressure from declining values on commercial real estate,” said Knox. “We’ve felt that too.”

Both the state and federal agreements ordered the bank to increase its capital, write off or collect assets that had been classified as a loss and address its lending practices.

Other real estate owned, properties the bank has obtained through foreclosure or liens, increased from $7.4 million in 2009 to $23.4 million in 2010.

As of Sept. 30, 2010, the bank reported assets of $722.2 million, deposits of $606 million and loans of $538.5 million and capital of $31 million.

The bank’s September quarterly report to the FDIC showed the bank had an operating loss of $10.7 million, an increase from the $4.1 million loss from the third quarter of 2009.

Contributing to the increased operating loss, though, was a $10 million increase the bank made to bolster its reserve fund to $25 million.

Knox said the bank has made a concentrated effort to increase its reserves and its provision for loan losses since signing the orders.