A five-year-old bank in Portland, Ore., has been slapped with a cease- and-desist order by the Federal Deposit Insurance Corp. for engaging in what the regulator called "unsafe or unsound banking practices."

The FDIC said $72 million-asset Northern Bank of Commerce lacks sufficient equity capital to support its assets, has an inadequate management team to support its loan portfolio, and is operating with an insufficient allowance for loan losses.

As part of an agreement with the FDIC, chief executive officer John Holloway has stepped down as chairman. He is to be succeeded by William Spicer, a director since the bank's inception in 1994.

The FDIC order also requires Northern Bank to hire a chief financial officer and a chief credit officer to upgrade its "low-quality loan portfolio and improve earnings."

Over the next 180 days, Northern Bank must also increase its Tier 1 capital by at least $2 million and reduce all loans classified as "doubtful" by regulators to $3.5 million.

Northern Bank, which operates eight branches in retirement neighborhoods around Portland, primarily makes construction and residential loans.

James Bradshaw at Pacific Crest Securities in Portland said that Mr. Holloway's troubles stemmed from the bank's explosive growth and management turnover.

"It's become too much for one man to handle," Mr. Bradshaw said.

Mr. Spicer agreed. "Our challenge now is to make sure that our internal management keeps pace with our rapid growth," he said in a prepared statement.

He said the bank has adopted a formal plan to address the regulator's concerns.

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