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{{7-31-94 p.C-2832}}
   [10,667] In the Matter of Bank of New Hampshire, Manchester, New Hampshire, Docket No. FDIC-92-321d (11-3-92).

   Bank agrees to restore and maintain its total capital. (This order was terminated by order of the FDIC dated 5-16-94; see ¶15,869.)

   [.1] Capital Directive—Restore and Maintain

In the Matter of

BANK OF NEW HAMPSIRE
MANCHESTER, NEW HAMPSHIRE
(Insured State Nonmember Bank)
CAPITAL DIRECTIVE
FDIC-92-321d

   Bank of New Hampshire, Manchester, New Hampshire ("Bank"), having been advised of its right to receive a NOTICE OF INTENT TO ISSUE DIRECTIVE TO RESTORE AND MAINTAIN CAPITAL detailing the unsafe or unsound banking practices alleged to have been committed by the Bank and its right to file a response thereto, under sections 325.4 and 325.6 of the FDIC Rules and Regulations, 12 C.F.R. §§ 315.4 and 325.6, and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CAPITAL DIRECTIVE ("CONSENT AGREEMENT") with counsel for the Federal Deposit Insurance Corporation ("FDIC"), dated October 28, 1992, whereby solely for the purpose of this proceeding and without admitting or denying any allegations or implications of fact or the existence of any unsafe or unsound banking practices, the Bank consented to the issuance of a CAPITAL DIRECTIVE.
   The FDIC considered the matter and determined that the Bank had engaged in unsafe or unsound banking practices, as defined at section 325.4 of the FDIC Rules and Regulations, 12 C.F.R. § 325.4, by virtue of the fact that as of March 2, 1992, the Bank had a ratio of Tier 1 capital to total assets, as those terms are defined in section 325.2 of the FDIC Rules and Regulations, 12 C.F.R. § 325.2, of 3.42 percent. The FDIC hereby issues this CAPITAL DIRECTIVE pursuant to the provisions of section 908 of the International Lending Supervision Act of 1983, 12 U.S.C. § 3907, and section 325.6 of the FDIC Rules and Regulations, 12 C.F.R. § 325.6.

   The FDIC finds and concludes as follows:

FINDINGS OF FACT AND
CONCLUSIONS OF LAW

   1. The Bank is a corporation existing and doing business under the laws of the State of New Hampshire, having its principal place of business in Manchester, New Hampshire. The Bank is and has been, at all times pertinent to this action, an insured State non-member bank, subject to the Federal Deposit Insurance Act ("Act"), 12 U.S.C. §§ 1811–1831t, the Rules and Regulations of the FDIC, 12 C.F.R. Chapter III, the International Lending Supervision Act of 1983, 12 U.S.C. §§ 3901–3912, and the laws of the State of New Hampshire.
   2. As of March 2, 1992:

       (a) The Bank's total assets, as defined in section 325.2(n) of the FDIC's Rules and Regulations, 12 C.F.R. § 325.2(n), totaled $1,002,557,000.
       (b) The Bank's Tier 1 capital, as defined in section 325.2(m) of the FDIC Rules and Regulations, 12 C.F.R. § 325.2 (m), totaled $34,268,000, or 3.42 percent of total assets.
       (c) The Bank's adjusted Tier 1 capital totaled $38,887,000, or 3.86 percent of adjusted total assets.
       (d) The Bank's total deposits equaled $906,825,000.
   3. The Bank is engaging in an unsafe or unsound banking practice within the meaning of section 325.4(b) of the FDIC's Rules and Regulations, 12 C.F.R. § 325.4(b), in that the Bank is operating with inadequate capital to support the quantity and quality of the assets in its portfolio, as demonstrated by the following data as of March 2, 1992:
       (a) The Bank held adversely classified assets in the amount of $70,302,000, in- {{1-31-93 p.C-2833}}cluding $5,477,000 in assets classified "Loss", $2,128,000 in assets classified "Doubtful" and $62,697,000 in assets classified as "Substandard".
       (b) Total classified assets represented 129.52 percent of the Bank's total capital and ineligible reserves of $54,280,000.
       (c) Nonaccrual loans equaled $18,443,000, and represented 2.84 percent of the Bank's total loans.
   4. Upon consideration of the facts recited in the paragraphs above, the FDIC has determined that the Bank has failed to maintain adequate capital, as required by section 908 of the International Lending Supervision Act of 1983, 12 U.S.C. § 3907, and sections 325.3 and 325.4 of the FDIC's Rules and Regulations, 12 C.F.R. §§ 325.3 and 325.4.

CAPITAL DIRECTIVE

   After taking into consideration the FINDINGS OF FACT AND CONCLUSIONS OF LAW stated herein, it is hereby:

   [.1] DIRECTED, that the Bank shall restore and thereafter maintain its ratio of Tier 1 capital to hold assets to not less than six (6.0) percent.
   FURTHER DIRECTED, that the Bank shall complete the required capital augmentation as follows:
   by December 31, 1992, the Bank shall have a Tier 1 leverage capital ratio at or in excess of four and one-quarter (4.25) percent and shall continue to maintain its Tier 1 leverage capital ratio at or in excess of such level until June 30, 1993; by June 30, 1993, the Bank shall have a Tier 1 leverage capital ratio at or in excess for four and three-quarters (4.75) percent and shall continue to maintain its Tier 1 leverage capital ratio at or in excess of such level until December 31, 1993; by December 31, 1993, the Bank shall have a Tier 1 leverage capital ratio at or in excess of five and one-quarter (5.25) percent and shall continue to maintain its Tier 1 leverage capital ratio at or in excess of such level until June 30, 1994; by June 30, 1994, the Bank shall have a Tier 1 leverage capital ratio at or in excess of six (6.0) percent and shall continue to maintain its Tier 1 leverage capital ratio at or in excess of such six (6.0) percent level as calculated herein while this ORDER is in effect.
   FURTHER DIRECTED, that this CAPITAL DIRECTIVE shall become effective ten (10) days after its issuance by the FDIC.
   Each provision of this CAPITAL DIRECTIVE shall be binding upon the Bank, its directors, officers, employees, agents, successors, assigns, and other institution-affiliated parties of the Bank.
   Each provision of this CAPITAL DIRECTIVE shall remain effective and enforceable except to the extent that, and until such time as, any provision shall be modified, terminated, suspended, or set aside by the FDIC.
   Dated at Westwood, Massachusetts, this 3rd day of November, 1992.
   Pursuant to delegated authority.

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