Shares of Columbia Bancorp in The Dalles, Ore., tanked Friday, after the company announced that it is under a regulatory order to bolster capital at its banking unit.

The $1.1 billion-asset Columbia said in a press release late Thursday that it entered into an agreement with the Federal Deposit Insurance Corp. and the Oregon Division of Finance and Corporate Securities on Feb. 9.

The agreement requires it to increase both the total risk-based capital ratio and the leverage ratio at Columbia River Bank to at least 10% within 90 days.

At yearend the bank had a total risk-based capital ratio of 8.75% and a leverage ratio of 6.29%. (Typically, to be considered well capitalized, a bank must have a total risk-based capital ratio of 10% and a leverage ratio of 5%.)

To reach the required capital levels, the company said it has suspended dividend payments and embarked on an aggressive cost-cutting program.

The bank also must rid itself of certain classified assets and develop a plan to reduce delinquent loans.

Other stipulations of the agreement, including increasing the allowance for loan losses and replacing management, have already been carried out, Columbia said. In October its former chief executive officer, Terry L. Cochran, returned to that job, succeeding Roger L. Christensen.

"Although we are disappointed about the issuance of a regulatory order, we believe this arrangement represents a positive step in our long-term direction," Mr. Cochran said in the release. "We believe we have made substantial progress in addressing a number of the FDIC's concerns and we intend to finalize many of the plans called for in the order as promptly as possible."

Shares of Columbia fell 22%, to $1.15 per share.

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