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(This story follows last week's coverage on Montana banks receiving enforcement orders)

Updated-Add American Bank to the list of statewide banks under regulatory actions from a federal agency, a list that is likely to grow even larger.

The Montana based institution with six statewide branches is under a 'Written Agreement' with the Federal Reserve. Bank President, Bryan Klein says the document is less severe than the consent orders faced by some other state banks.

"It doesn't include any requirements to assess or change management, it doesn't include any changes to board oversight or the Board of Directors," Klein said, adding it also doesn't require the bank to raise additional capital.

"Our capital is extremely strong," he said. "We meet all the regulatory definitions of well capitalized." Klein said the bank has over $50 million in capital and reserves as of this point.

The agreement does dictate American Bank develop strategies to "reduce the level of problem assets." Klein said for American Bank it's problem loan assets.

"(Assets) that we have been reducing and will continue to work toward reducing going forward," he said.

State Banking Commissioner Annie Goodwin said the order faced by American Bank and even the more involved consent orders do not mean the banks were conducting themselves in an inappropriate way. Rather, the institutions are needing to reevaluate how they do business in light of the recession.

Klein said the banking industry nationwide has been challenged due to aggressive lending patterns undertaken before the start of the downturn, largely involving real estate loans. Regulators are now catching up.

An August 13th article from the financial services newspaper 'American Banker' said almost 1,200 banks have received a public enforcement action from a regulatory agency since the start of 2008. That's out of nearly 7,800 banks listed as members of the FDIC. The article's author, Rachel Witkowski, said those actions are on pace to increase 64 percent this year.

"More informal and formal actions will be taken by federal regulators," Witkowski writes. "Even on the well-capitalized banks if their loans appear to be a risk of lower valuations in the future."

Banking Commissioner Goodwin agreed the orders are on the rise, but said many of these types of documents did not exist earlier than two years ago.

"These orders are in fact an action plan to allow the banks to improve and to strengthen over time as our economy strenghens as well," she said, adding customers' money is safe.

"There is no need to panic, there is the FDIC insurance that exists for all customers that provide deposits of money in our FDIC insured banks," Goodwin said. The FDIC insures deposits up to $250,000 per each individual listed on an account.