Newspaper article THE JOURNAL RECORD

Exchange Bank Emerges from under Cease-and-Desist Order

Newspaper article THE JOURNAL RECORD

Exchange Bank Emerges from under Cease-and-Desist Order

Article excerpt

SKIATOOK - The Exchange Bank has been freed from a 2009 cease- and-desist order that overhauled its lending and management practices.

The 110-year-old bank, with branches in Owasso and Sperry, has cut its loans and leases by 37 percent since the order took effect. Exchange has almost doubled its tier-1 capital ratio, reversed its net losses and issued a dividend.

"By the end of this year, where we're positioned, we're gradually growing core deposits," President and CEO Daniel Torbett said. "I think we're situated really where we want to be. All of our branches are really in a very short drive. That's more our personality. We're a small-town community bank."

The Federal Deposit and Insurance Corp. and Oklahoma Banking Department removed the order at the end of March. The FDIC released news of that change Friday. State Banking Commissioner Mick Thompson could not provide further details.

The Skiatook bank drew regulatory concerns with its plunging financial performance during the 2008 recession. Total assets fell from $107.7 million at the end of 2007 to $97.4 million at the close of 2008, FDIC records show. Net charge-offs almost doubled to $756,000 over that period, while net income attributable to the bank plunged from $1.2 million to a $2.4 million loss.

"The bank in 2009 had some problem assets that had reduced capital," Torbett said. "We've now reduced those assets."

The Nov. 5, 2009, order required the bank to immediately address its capital levels and step up supervision of hazardous lending and debt-collection practices. The order curtailed dividends and directed an expansion of the bank's board with more independent directors.

The order also required hiring a consultant to help evaluate management and strategic practices, and to overhaul key operating policies. The order also set asset management targets to reduce delinquencies and build up capital standards.

Fulfilling that required hiring a full-time regulatory compliance officer and building a credit department, Torbett said. …

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