Howard Savings Bank has entered into a written agreement with the Federal Deposit Insurance Corp. and the New Jersey Department of Banking to tighten lending practices and build capital.

The agreement supersedes a less-stringent memorandum of understanding imposed by regulators in May 1990. It requires the Livingston, N.J.-based company to build core capital to 3% of assets -- from its June 30 level of 2.44% -- by the end of the year. Howard, which has $4.1 billion in assets, must hit a 6% core capital ratio by the end of 1992.

Nonperformers Must Be Cut

The agreement also requires the 74-branch company to reduce its level of nonperforming assets.

William P. Tuggle 3d, Howard's chairman and chief executive officer, cautioned that the bank's ability to achieve the capital ratio by yearend would depend on stability in the New Jersey real estate market.

Like many New Jersey companies, Howard has been hit hard by a real estate downturn in the state.

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