Federal regulators have ordered Cowlitz Bancorp of Longview, Wash., to raise capital or accept a sales offer by July 15, the company said Tuesday in a filing with the Securities and Exchange Commission.

The $537 million-asset company received a prompt corrective action directive, dated June 15, that prohibits it from accepting brokered deposits, increasing assets, paying dividends, or paying bonuses, among other restrictions.

According to the order the bank, which had a leverage ratio of 3.37 on March 31, is critically undercapitalized.

Cowlitz said in the filing that it "has engaged in numerous discussions and due diligence with various capital sources, and will continue to vigorously pursue contacts and discussions with prospective investors." It said it is continuing to reduce its loan portfolio, lowering its regulatory capital requirements.

The bank reported a $12.1 million first-quarter loss, compared with a $1.9 million loss a year earlier, and had a nonperforming-assets ratio of 8.5% on March 31.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.