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FDIC Enforcement Decisions and Orders

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{{9-30-94 p.C-1947}}
   [10,453] In the Matter of People's Savings Bank of Brockton, Brockton, Massachusetts, Docket No. FDIC-92-39b (2-11-92).

   Bank to cease and desist from such unsafe or unsound practices as operating with excessive volumes of adversely classified assets; following hazardous lending and lax collection practices; operating with inadequate capital; operating in violation of applicable laws or regulations; operating with management policies detrimental to the Bank; operating with inadequate loan documentation; engaging in practices which produce inadequate operating income; failing to provide adequate supervision over the Bank's affairs; operating with inadequate allowance for loan and lease losses; failing to submit Reports of Condition and Income in accordance with instructions; and operating with inadequate routine and controls policies. (This order was terminated by order of the FDIC dated 7-29-94; see ¶ 15,894.)

   [.1] Management—Qualifications—Review
   [.2] Management—Management Plan—Minimum Requirements
   [.3] Allowance for Loan and Lease Losses—Establish/Maintain
   [.4] Capital—Tier 1 Capital—Increase/Maintain—Methods
   [.5] Loans—Risk Position—Reduce—Written Plan Required
   [.6] Loans—Extensions of Credit—Existing Borrowers—Curtail
   [.7] Loan Policy—Written Revision—Minimum Requirements
   [.8] Profit Plan—Minimum Requirements
   [.9] Funds Management—Written Policy Required
   [.10] Dividends—Restricted
   [.11] Shareholders—Disclosure—Cease and Desist Order
   [.12] Technical Exceptions—Eliminate/Correct
   [.13] Violations of Law—Eliminate/Correct
   [.14] Call Reports—Correct Deficiencies
   [.15] Compliance Reports—Frequency

In the Matter of

PEOPLE'S SAVINGS BANK OF
BROCKTON

BROCKTON, MASSACHUSETTS
(Insured State Nonmember Bank)
ORDER TO CEASE
AND DESIST

FDIC-92-39b

   People's Savings Bank of Brockton, Brockton, Massachusetts ("Bank"), having been advised of its right to a Notice of Charges and of Hearing detailing the unsafe or unsound banking practices and violation of regulation alleged to have been committed by the Bank and of its right to a hearing on such alleged charges under section 8(b)(1) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. § 1818(b)(1), and having waived those
{{9-30-94 p.C-1948}}rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER TO CEASE AND DESIST ("CONSENT AGREEMENT") with counsel for the Federal Deposit Insurance Corporation ("FDIC"), dated February 4, 1992, whereby solely for the purpose of this proceeding and without admitting or denying any allegation or implication of fact or the existence of any unsafe or unsound banking practices or violation of regulation, or any other factual ground for the issuance of an ORDER under section 8(b) of the Act, 12 U.S.C. § 1818(b), the Bank consented to the issuance of an ORDER TO CEASE AND DESIST ("ORDER") by the FDIC.
   The FDIC considered the matter and determined that it had reason to believe that the Bank had engaged in unsafe or unsound banking practices and had violated a regulation. The FDIC, therefore, accepted the CONSENT AGREEMENT and issued the following:

ORDER TO CEASE AND DESIST

   IT IS HEREBY ORDERED that the Bank and its institution-affiliated parties, as that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), to the extent such parties are subject to this ORDER pursuant to the Act, cease and desist from the following unsafe or unsound banking practices and violation of regulation:
   (a) operating with an excessive volume of adversely classified assets;
   (b) engaging in deficient lending and collection practices;
   (c) operating with inadequate capital for the kind and quality of assets held;
   (d) engaging in a violation of an applicable regulation;
   (e) engaging in management policies and practices which are detrimental to the Bank;
   (f) operating with deficient or inadequate loan documentation, including but not limited to current financial statements, appraisals, and cash flow and/or operating information;
   (g) engaging in practices which result in inadequate operating income and excessive loan losses;
   (h) failing to provide adequate supervision and direction over the affairs of the Bank to prevent unsafe or unsound practices and violation of regulation;
   (i) operating with an inadequate allowance for loan losses for the volume, kind and quality of loans held;
   (j) failing the submit Reports of Condition and Income in accordance with prevailing instructions;
   (k) operating without proper internal routine and controls.
   IT IS FURTHER ORDERED that the Bank and its institution-affiliated parties, to the extent such parties are subject to this ORDER pursuant to the Act, take affirmative action as set forth below, to the extent such actions have not already been completed by the Bank prior to the issuance of this ORDER. Solely for purposes of enforcement of this ORDER by the FDIC under section 8(i) of the Act, the Bank and its institution-affiliated parties will not be deemed to be in violation of paragraphs (a)-(k) above, except to the extent that the Bank is not in compliance with the following provisions:

   [.1] 1. (a) Within one hundred twenty (120) days from the effective date of this ORDER, the Bank shall have and retain qualified management. At a minimum, such management shall include a Chief Executive Officer and a Loan Workout Officer with proven ability in managing a bank of comparable size and experience in upgrading a low quality loan portfolio. Such Chief Executive Officer shall be provided the necessary written authority by resolution of the Board of Directors of the Bank to implement the provisions of this ORDER. The qualifications of management shall be assessed on its ability to take effective action toward the accomplishment of the following goals:

       (i) compliance with the requirements of this ORDER,
       (ii) operation of the Bank in a safe and sound manner,
       (iii) compliance with applicable laws and regulations, and
       (iv) restoration or maintenance of all aspects of the Bank to or in a safe and sound condition, including asset quality, capital adequacy, earnings, management effectiveness and liquidity.
   During the life of this ORDER, the Bank shall notify the Regional Director of the FDIC's Boston Regional Office ("Regional Director") and the Commissioner of Banks of the Commonwealth of Massachusetts ("Commissioner") in writing
{{4-30-92 p.C-1949}}of any changes in management in the manner and to the extent required by section 303.14 of the FDIC's Rules and Regulations, 12 C.F.R. § 303.14.

   [.2] (b) Toward this end, within sixty (60) days from the effective date of this ORDER, the Board of Directors shall cause to be revised, under its supervision, its written analysis and assessment of the Bank's management and staffing needs ("management plan"), which shall include, at a minimum:

       (i) identification of both the type and number of officer positions needed to manage and supervise properly the affairs of the Bank;
       (ii) identification and establishment of such Board committees as are needed to provide guidance and oversight to active management;
       (iii) evaluation of each Bank officer at the level of Vice President and above, and in particular the chief executive officer, to determine whether these individuals possess the ability, experience and other qualifications required to perform present and anticipated duties, including adherence to the Bank's established policies and practices, and maintenance of the Bank in a safe and sound condition; and
       (iv) a plan of action to recruit and hire any additional or replacement personnel with the requisite ability, experience and other qualifications, which the Board of Directors determines are necessary to fill Bank officer positions consistent with the Board's analysis, evaluation and assessment as provided in paragraphs 1(b)(i) and 1(b)(iii) of this ORDER.
   (c) The written management plan shall be submitted to the Regional Director and the Commissioner for review and comment. No sooner than thirty (30) days, but under no circumstances more than sixty (60) days after such submission, the Board of Directors shall approve the written management plan, taking into consideration any responsive comments received from the Regional Director or the Commissioner during such 30-day period following submission, and such approval shall be recorded in the minutes of the Board of Directors. Subsequent modifications to the written management plan may be made only after giving the Regional Director and the Commissioner written notice of the proposed modification, and after consideration of any responsive comments received from the Regional Director and/or the Commissioner within thirty (30) days from their receipt of the notice of proposed modification. No such modification shall become effective until approved by the Board of Directors, and such approval shall be recorded in the minutes of the Board of Directors. The Bank, its directors, officers and employees shall implement and follow the written management plan and/or any subsequent modification thereto.
   (d) (i) The written management plan shall also include the requirement that the Board of Directors of the Bank, or a committee of Directors consisting of not less than a majority of committee members who are independent with respect to the Bank, provide supervision over lending, investment and operating policies of the Bank for the purpose of facilitating the Bank's compliance with the provisions of this ORDER.
   (ii) At the next meeting of the shareholders of the Bank, and at each succeeding meeting of the shareholders at which Bank directors are to be elected, the members of the Board of Directors who are also shareholders shall nominate and support the election of candidates to the Board of Directors who are independent with respect to the Bank, subject to the availability and willingness of such individuals to serve, in such number as is necessary to cause a majority of the Board of Directors to continue to be and to remain independent with respect to the Bank.
   (iii) For purposes of this ORDER, an individual who is "independent with respect to the Bank" shall be any individual (1) who is not an officer of the Bank or any of its affiliated organizations and who does not own more than five (5.0) percent of the outstanding shares of the Bank, (2) who is not related by blood, marriage or common financial interest to an officer of the Bank or to any stockholder owning more than five (5.0) percent of the Bank's outstanding shares, and (3) who is not indebted to the Bank, directly or indi- {{4-30-92 p.C-1950}}rectly (including the indebtedness of any entity in which the individual has a substantial financial interest), in an amount exceeding $750,000 or five (5.0) percent of the Bank's total equity capital and allowance for loan and lease losses, whichever is greater. For purposes of this paragraph, the position of "Clerk" of the Bank does not constitute an "officer."
   (e) The Bank's Board of Directors shall continue to meet at least monthly. The Board shall cause to be prepared in advance and shall follow a detailed written agenda at each meeting, which shall include consideration of actions of any committees. A chronological file of all written agendas shall be maintained. Notwithstanding the foregoing, the Board shall not be precluded from considering matters other than those contained in the agenda. Detailed written minutes of all Board meetings shall be maintained and recorded on a timely basis.

   [.3] 2. (a) By the effective date of this ORDER, the Bank shall have increased its allowance for loan and lease losses ("Reserve") existing as of March 31, 1991 by $2,800,000 at a minimum.
   (b) Immediately after complying with paragraph 2(a), the Bank shall eliminate from its books, by charge-off, collection, or the establishment of specific reserves, all assets of portions of assets classified "Loss" and fifty (50.0) percent of all assets or portions of assets classified "Doubtful" in the FDIC's Report of Examination dated June 17, 1991 ("Examination"), which have not been previously collected or charged off. Reduction of these assets through use of proceeds of loans made by the Bank, other than to qualified third party borrowers, does not constitute "collection" or "elimination" for the purpose of this paragraph.
   (c) The Bank shall maintain its Reserve in accordance with the prevailing requirements of the Instructions for the Reports of Condition and Income ("Instructions"). Toward this end, within sixty (60) days from the effective date of this ORDER, the Bank's Board of Directors shall review the Bank's policy for determining the adequacy of the Bank's Reserve and make any appropriate changes to such policy necessary to result in a comprehensive policy for determining the adequacy of the Bank's Reserve. The policy shall provide for a review of the Reserve at least once each calendar quarter. The review should focus on the results of the Bank's internal loan review, loan loss experience, trends of delinquent and non-accrual loans, an estimate of potential loss exposure on significant credits, concentrations of credit, and present and prospective economic conditions based on facts then known. Review of other real estate and exposure therein shall be undertaken along the same lines as the aforementioned loan portfolio review. The adequacy of the Reserve in relation to the loss potential in the loan portfolio will be reviewed by the Board of Directors and adjustments to the Reserve will be made accordingly. Details of these reviews will be incorporated into the minutes of the Board of Directors, including the methodology used to determine the adjustments made.
   (d) Reports of Condition and Income required to be submitted by the Bank as of each Report date, as that term is used in the Instructions, between and including March 31, 1991 and the effective date of this ORDER, shall, at a minimum, reflect a Reserve maintained in accordance with the Instructions. If necessary to comply with this paragraph 2(d), the Bank shall file amended Reports of Condition and Income within ten (10) days from the effective date of this ORDER.
   (e) Prior to the submission of any Report of Condition or Report of Income required to be filed by the Bank after the effective date of this ORDER, the Board of Directors of the Bank shall: (1) review the adequacy of the Bank's Reserve, (2) cause the Bank to provide for an adequate Reserve, and (3) cause the Bank to accurately report the Reserve in any such Report of Condition and Income. The minutes of the Board meeting at which such review is undertaken shall indicate the results of the review, including any increases in the Reserve, and the basis for determining the amount of allowance provided.

   [.4] 3. (a) (i) Throughout the life of this ORDER, the Bank shall maintain Tier 1 capital at or in excess of seven (7.0) percent of the Bank's total assets ("Tier 1 leverage capital ratio"). Toward this end, the Bank shall develop a Capital
{{4-30-92 p.C-1951}}Plan which will be submitted to the Regional Director and the Commissioner for approval within ninety (90) days from the effective date of this ORDER. The Capital Plan should address both internal and external sources of capital augmentation, including capital infusions, retention of earnings, restrictions of asset growth and assets sales.
   (ii) For purposes of this ORDER, the term "Tier 1 capital" and "total assets" shall have the meanings ascribed to them in the revised Part 325 of the FDIC's Rules and Regulations, 12 C.F.R. Part 325, which became effective April 10, 1991.
   (b) In calculating the Bank's Tier 1 leverage capital ratio under paragraph 3(a) initially, the Bank shall first comply fully with paragraphs 2(a) and (b) of this ORDER. Thereafter, such ratio and its component parts shall be determined only after the Bank has made such additions to its Reserve so as to bring the Reserve into compliance with the prevailing requirements of the Instructions and charged off any losses identified subsequent to the Examination.
   (c) Any increase in the Tier 1 leverage capital ratio made by the Bank in order to meet the requirements of paragraph 3(a) of this ORDER may be accomplished by:

       (i) the sale of new offerings of common stock or perpetual preferred stock;
       (ii) the collection of all or part of assets classified "Loss" within the Examination without further loss or liability to the Bank. Reductions to loans and leases classified "Loss" shall first be credited to the Bank's Reserve and, if the Board of Directors' review of the adequacy of the Reserve required by paragraph 2 of this ORDER indicates that such Reserve has a balance in excess of that required for adequacy, any such excess may be transferred to equity capital through a negative provision to the Reserve;
       (iii) the collection in cash of assets previously charged off;
       (iv) the reduction of the overall size of the Bank through the sale of assets or other means;
       (v) any combination of the above means; or
       (vi) any other means acceptable to the Regional Director and the Commissioner.
   (d) If the Tier 1 leverage capital ratio specified in paragraph 3(a)(i) declines below seven (7.0) percent, the Bank, within thirty (30) days after the end of the month during which said ratio so declined, shall submit a written plan to the Regional Director and the Commissioner for increasing such ratio up to or in excess of seven (7.0) percent within one hundred twenty (120) days after the written plan is implemented. Thereafter, the Bank shall continue to maintain its Tier 1 leverage capital ratio at or in excess of such level as calculated herein while this ORDER is in effect. Upon approval by the Regional Director and the Commissioner, the Bank shall promptly implement the written plan.
   (e) In addition to the requirements of paragraph 3(a)-(d), the Bank shall comply with the FDIC's Statement of Policy on Risk-Based Capital found in Appendix A to Part 325 of the FDIC Rules and Regulations, 12 C.F.R. Part 325, App. A.
   (f) If all or part of any increase in capital made by the Bank in order to meet the requirements of this paragraph 3 involves an offering, other than an offering deemed not to be a public securities offering pursuant to 17 C.F.R. § 230.506 or an hereafter amended, of the Bank's securities (including a distribution limited only to the Bank's existing shareholders), the Bank shall prepare detailed offering materials fully describing the securities being offered, including an accurate description of the financial condition of the Bank and of this ORDER as well as the circumstances giving rise to the offering, and any other material disclosures necessary to comply with the Federal securities laws. Prior to the sale of the securities, and, in any event not less than twenty (20) days prior to the dissemination of such materials, the materials used in the sale of the securities shall be submitted to the FDIC, Registration and Disclosure Section, Washington, D.C. 24029, for review. Any changes requested to be made in the materials by the FDIC shall be made prior to their dissemination.
   (g) In complying with the provisions of paragraph 3(f) of this ORDER, the Bank shall provide to any subscriber and/or pro- {{4-30-92 p.C-1952}}spective purchaser of Bank stock, prior to the sale of such stock, written notice of any planned or existing development or other change which is materially different from the information reflected in any offering materials used in connection with the sale of Bank securities. The written notice required by this paragraph 3(g) shall be furnished within ten (10) calendar days from the date such material development or change was planned or occurred, whichever is earlier, to every prospective purchaser and/or subscriber of Bank stock who received or was tendered the information contained in the Bank's original offering materials.
   (h) The Bank's Board of Directors shall maintain in its minutes a written record of all actions taken by the Board of Directors to comply with the capital requirements of paragraphs 3(a) through 3(g) of this ORDER, including, at a minimum, any action to maintain its Tier 1 capital by each of the methods specified in paragraphs 3(c)(i) through 3(c)(vi) of this ORDER.

   [.5] 4. (a) Within thirty (30) days from the effective date of this ORDER, the Board of Directors shall cause to be developed, under its supervision, a written plan of action to lessen the Bank's risk position with respect to each borrower who or which had outstanding principal debt owing to the Bank in excess of $200,000 which was classified "Substandard" or "Doubtful," in whole or in part, in the FDIC Report of Examination of the Bank as of June 17, 1991. In developing such plan, the Bank shall, at a minimum:

       (i) review the financial position of each such borrower, including source of repayment, repayment ability, and alternative repayment sources; and
       (ii) evaluate the available collateral for each such credit, including possible actions to improve the Bank's collateral position.
   Based upon such review and evaluation, the written plan of action shall: (A) establish target dollar levels to which the Bank shall reduce the aggregate dollar volume of "Substandard" or "Doubtful" classifications in the FDIC Report of Examination of the Bank as of June 17, 1991 within six (6), twelve (12) and eighteen (18) months from the effective date of this ORDER; (B) provide for the submission of written monthly progress reports to the Bank's Board of Directors' Compliance Committee for review and notation in the Committee minutes; (C) provide for monthly reporting on said progress reports by the Compliance Committee to the Board of Directors; and (D) provide for the submission of said progress reports of the Bank's Board of Directors quarterly for review and notation in the Board minutes. Exhibit A provides the form for the progress report. As used in this paragraph 4, "reduce" means to (1) collect, (2) charge off or create a specific reserve against, or (3) improve the quality of such assets so as to warrant removal of any adverse classification by the FDIC and the Commonwealth of Massachusetts Department of Banking. Payment of loans with the proceeds of other loans made by the Bank, other than loans to qualified third party borrowers, will not constitute "reduction" or "collection" for purposes of this ORDER.
   (b) The written plan of action described by paragraph 4(a) shall be submitted to the Regional Director and the Commissioner for review and comment. No sooner than thirty (30) days, but under no circumstances more than sixty (60) days after such submission, the Board of Directors shall approve the written plan of action, taking into consideration any responsive comments received from the Regional Director or the Commissioner during such 30-day period following submission, and such approval shall be recorded in the minutes of the Board of Directors. Subsequent modifications to the written plan may be made only after giving the Regional Director and the Commissioner written notice of the proposed modification, and after consideration of any responsive comments received from the Regional Director and/or the Commissioner within thirty (30) days from their receipt of the notice of proposed modification. No such modification shall become effective until approved by the Board of Directors, and such approval shall be recorded in the minutes of the Board of Directors. The Bank shall follow the written plan of action and/or any subsequent modification thereto.

   [.6] 5. The Bank shall not extend or renew, directly or indirectly, credit to, or knowingly for the benefit of, any borrower who has a loan or other extension of credit with
{{4-30-92 p.C-1953}}the Bank that has been charged off or classified, in whole or in part, "Loss," "Doubtful," or "Substandard" in the FDIC Report of Examination of the Bank as of June 17, 1991, and is uncollected, unless a majority of the Bank's Board of Directors first (1) determines that such advance is in the best interest of the Bank, (2) determines that the Bank has satisfied the requirements set out in paragraph 4(a) of this ORDER as to such borrower, and (3) approves such advance, either individually or as part of the Bank's work-out plan for the borrower. A written record of the Board of Directors' determination and approval of any advance under the terms of this paragraph 5 shall be maintained in the credit file of the affected borrower(s) as well as the minutes of the Board of Directors. Notwithstanding the foregoing, this ORDER shall not require such approvals by the Board of Directors for extensions of credit made pursuant to legally binding contractual commitments entered into by the Bank prior to the effective date of this ORDER. For purposes of this paragraph 5, an extension of credit shall be deemed to have been made "knowingly" for the benefit of a borrower if the Bank knew or, upon reasonable inquiry, could have known that the extension of credit would be for the benefit of that borrower.

   [.7] 6. Within ninety (90) days from the effective date of this ORDER, the Bank shall revise its written loan policy to incorporate at a minimum formalized collection procedures and expanded loan review procedures including a qualitative grading system. The revised written loan policy shall be submitted to the Regional Director and the Commissioner for review and comment. No sooner than thirty (30) days, but under no circumstances more than sixty (60) days after such submission, the Board of Directors shall approve the revised written loan policy, taking into consideration any responsive comments received from the Regional Director or the Commissioner during such 30-period following submission, and such approval shall be recorded in the minutes of the Board of Directors. Subsequent modifications to the revised written loan policy may be made only after giving the Regional Director and the Commissioner written notice of the proposed modification, and after consideration of any responsive comments received from the Regional Director and/or the Commissioner within thirty (30) days from their receipt of the notice of proposed modification. No such modification shall become effective until approved by the Board of Directors, and such approval shall be recorded in the minutes of the Board of Directors. The Bank shall follow the revised written loan policies and/or any subsequent modification thereto.

   [.8] 7. (a) Within ninety (90) days from the effective date of this ORDER, the Bank shall revise its written profit plan consisting of goals and strategies for improving the earnings of the Bank, which written profit plan shall include, at a minimum:

       (i) identification of the major areas in, and means by, which the Bank will seek to improve its operating performance;
       (ii) realistic and comprehensive budgets;
       (iii) a budget review process to monitor the income and expenses of the Bank to compare actual figures with budgetary projections; and
       (iv) a description of the operating assumptions that form the basis for, and adequately support, major projected income and expense components.
   (b) The written profit plan shall be submitted to the Regional Director and the Commissioner for review and comment. No sooner than thirty (30) days, but under no circumstances more than sixty (60) days after such submission, the Board of Directors shall approve the written profit plan, taking into consideration any responsive comments received from the Regional Director or the Commissioner during such 30-day period following submission, and such approval shall be recorded in the minutes of the Board of Directors. Subsequent modifications to the written profit plan may be made only after giving the Regional Director and the Commissioner written notice of the proposed modification, and after consideration of any responsive comments submitted by the Regional Director and/or the Commissioner and received by the Bank within thirty (30) days from their receipt of the notice of proposed modification. No such modification shall become effective until approved by the Board of Directors, and such approval shall be recorded in the minutes of the Board of Directors. The Bank
{{4-30-92 p.C-1954}}shall follow the written profit plan and/or any subsequent modification thereto.

   [.9] 8. (a) Within ninety (90) days from the effective date of this ORDER, the Bank shall review and advise its written funds management policy to ensure that is includes, at a minimum, to the extent it does not already do so:

       (i) the Bank's liquidity needs and plans for ensuring that such needs are met on an ongoing basis;
       (ii) goals and strategies for managing and/or improving the Bank's interest rate risk exposure;
       (iii) monitoring of the interest rate sensitivity of present investments and deposits and projections of the types of investments and deposits to manage and/or improve such liquidity position; and
       (iv) coordination of the Bank's loan, investment, operating, and budget and profit planning policies with the written funds management policy.
   (b) The written funds management policy shall be submitted to the Regional Director and the Commissioner for review and comment. No sooner than thirty (30) days, but under no circumstances more than sixty (60) days after such submission, the Board of Directors shall approve the written funds management policy, taking into consideration any responsive comments received from the Regional Director or the Commissioner during such 30-day period following submission, and such approval shall be recorded in the minutes of the Board of Directors. Subsequent modifications to the written funds management policy may be made only after giving the Regional Director and the Commissioner written notice of the proposed modification, and after consideration of any responsive comments submitted by the Regional Director and/or the Commissioner received by the Bank within thirty (30) days from their receipt of the notice of proposed modification. No such modification shall become effective until approved by the Board of Directors, and such approval shall be recorded in the minutes of the Board of Directors. The Bank shall follow the written funds management policy and/or any subsequent modification thereto.

   [.10] 9. The Bank shall not declare or pay any dividends unless:

       (a) such declaration and payments are made in accordance with applicable State and Federal laws and regulations;
       (b) after payment of such dividends, the Tier 1 capital ratio specified in paragraphs 3(a)(i) shall not be less than seven (7.0) percent and the Bank's allowance for loan and lease losses shall be adequate as described in paragraph 2 of this ORDER;
       (c) such declaration and payment of dividends shall be approved in advance by the Board of Directors of the Bank; and
       (d) such declaration and payment of dividends shall be approved in advance, in writing, by the Regional Director and the Commissioner.

   [.11] 10. Following the effective date of this ORDER, the Bank shall send to its shareholders a description of this ORDER, (1) in conjunction with the Bank's next shareholder communication, and also (2) in conjunction with its notice or proxy statement preceding the Bank's next shareholder meeting. The description shall fully describe the ORDER in all material respects. The description and any accompanying communication, statement, or notice shall be sent to the FDIC, Registration and Disclosure Section, Washington, D.C. 20429, for review at least twenty (20) days prior to dissemination to shareholders. Any changes requested to be made by the FDIC shall be made prior to dissemination of the description, communication, notice, or statement.

   [.12] 11. (a) Within sixty (60) days from the effective date of this ORDER, the Bank shall correct all remediable technical exceptions on loans noted on pages 2-d and 2-d-1 of the FDIC Report of Examination of the Bank as of June 17, 1991.
   (b) Within (60) days from the effective date of this ORDER, the Bank shall correct all remediable internal routine and control deficiencies cited on pages 6-c and 6-c-1 of the FDIC Report of Examination of the Bank as of June 17, 1991.

   [.13] 12. Within sixty (60) days from the effective date of this ORDER, the Bank shall eliminate and/or correct the apparent violation of regulation committed by the Bank as described on pages 6-b of the FDIC Report of Examination of the Bank as of June 17, 1991.

   [.14] 13. Within sixty (60) days from the effective date of this ORDER, the Bank shall
{{4-30-92 p.C-1955}}correct all call reporting deficiencies cited in the FDIC Report of Examination of the Bank as of June 17, 1991, and shall file appropriately amended call reports, as necessary.

   [.15] 14. Within forty-five (45) days from the effective date of this ORDER, and, thereafter, within forty-five (45) days from the end of each calendar quarter, the Bank shall furnish written progress reports to the Regional Director and the Commissioner detailing the form and manner of any action taken to secure compliance with this ORDER and the results thereof. In addition, the Bank shall furnish such reports on request of either the Regional Director or the Commissioner. All progress reports and other written responses to this ORDER shall be reviewed by the Board of Directors of the Bank and made a part of the minutes of the Board meeting.
   This ORDER shall become effective ten (10) days from the date of its issuance.
   The provisions of this ORDER shall be binding upon the Bank and its institution-affiliated parties, to the extent such parties are subject to this ORDER pursuant to the Act.
   This ORDER has been reviewed and concurred in by the Commissioner.
   The provisions of this ORDER shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this ORDER shall have been modified, terminated, suspended, or set aside by the FDIC.
   Dated at Needham, Massachusetts this 12th day of February, 1992.
   Pursuant to delegated authority.

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