LegacyTexas Bank has signed a written agreement with bank regulators to improve its board oversight, loan quality, bad loan processes and other aspects of its business, according to a disclosure by the Federal Reserve System.
The agreement is between Plano-based LegacyTexas Bank, the Texas Department of Banking and the Federal Reserve Bank of Dallas.
The bank is working to satisfy the requirements, said Mays Davenport, executive vice president at Legacy Texas.
“It’s a sign of the economy we’re in right now,” he said.
In addition to putting in place controls on loan draws and limiting the number of credit policy exceptions in its lending practices, the regulators have ordered LegacyTexas to reduce credit concentrations within the bank. LegacyTexas has historically focused on real estate and development lending.
“It’s what we done and what we’ve always done,” Davenport said.
LegacyTexas continues to be well-capitalized by regulatory standards, and it has remained profitable, but with much slimmer margins this year. Halfway through 2009, LegacyTexas has produced an $882,000 profit, down from $9.5 million in the first half of 2008
