A Northwest thrift that acquired a failed bank just seven months ago has entered into a memorandum of understanding with federal regulators.

The $13.8 billion-asset Washington Federal Inc. entered into the agreement with the Office of Thrift Supervision on July 28, according to a quarterly report filed with the Securities and Exchange Commission Friday. The Seattle-based company said the memorandum would not affect dividend policy or require additional capital, but could limit or delay the company's ability to expand strategically. Washington Federal acquired the former Horizon Bank in Bellingham, Wash., in January with assistance from the Federal Deposit Insurance Corp.

Under the MOU, the company will be required to develop an enterprise risk management program; enhance risk management policies and procedures, specifically with respect to construction lending; and develop various programs for portfolio valuation, consumer compliance, fair lending and information technology, among other areas.

Management believes the company is already in compliance with a number of the measures in the order, according to the quarterly filing. The requirements will likely increase compliance costs, but the company said it does not expect the costs to have a material impact on earnings.

As of June 30, the company's nonperforming assets totaled $473.1 million, or 3.45% of total assets, compared with $605.8 million, or 5% of total assets, a year earlier. The company has a total risk-based capital ratio of 22.7%, and a leverage ratio of 11.36%, as of June 30.

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