Capital Corp of the West in Merced, Calif., said Wednesday that it has reached an agreement with the Federal Reserve Board to improve its risk management and credit administration practices.

Donald T. Briggs, who chairs the board's regulatory oversight committee, said in a press release that the $2.1 billion-asset company had anticipated the agreement and has already implemented a plan to address the issues.

The company has been struggling with bad residential construction loans. Its ratio of nonperforming loans to total loans was 5.6% in the first quarter.

(It has yet to report second-quarter results.)

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