North County Bank has received a cease-and-desist order because of its “unsafe or unsound banking practices and violations of law,” according to documents recently released by federal and state agencies.

The Federal Deposit Insurance Corporation and the Washington state Department of Financial Institutions announced Sept. 28 that the bank, which has four branches in Snohomish County, was notified of the order in August.

The order mostly pertains to unsafe lending practices used by the bank, according to federal documents.

North County Bank operated with “a board of directors which has failed to provide adequate supervision over and direction to the active management of the bank,” and has operated with a large volume of poor quality loans, according to the order.

An independent study of the banks’ management will be conducted to determine whether it needs additional personnel are needed to restore profitability.

North County Bank President Jack Myles said that the bank will be increasing its stock offerings to help make up for the loses, which were mostly in real estate loans.

Business loans remain strong, he said.

Although the bank will now be more selective and cautious when lending, Myles said that he’s already had customers approach him about purchasing stock in the company.

“It’s not like we’re shutting down lending at all,” Myles said. “Gradually those real estate loans are being absorbed.”

The order also requires management to notify the federal agency’s San Francisco regional office in writing of any changes to its Board of Directors or senior executives.