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{{5-31-02 p.C-2934}}

   [10,688A] In the Matter of Pacific First Bank, A FSB, Seattle, Washington, Docket No. 92-365kk (12-22-92).

   FDIC issues order conditionally granting approval for waiver of cross-guaranty.

   [.1] Holding Company—Injection of Capital—Condition of Cross-Guaranty Waiver

   [.2] Cross-Guaranty—Waiver—Stock Administered by Independent Trustee

   [.3] Cross-Guaranty—Waiver—Institution's Independence Required

   [.4] Cross-Guaranty—Waiver—Reasonable Losses

   [.5] Cross-Guaranty—Waiver—Applicability May Not be Conveyed or Transferred

In the Matter of
PACIFIC FIRST BANK, A FSB
SEATTLE, WASHINGTON
(Insured Depository Institution)
related to
THE LINCOLN SAVINGS BANK, FSB
NEW YORK CITY, NEW YORK
(Insured Depository Institution)
ORDER CONDITIONALLY GRANTING APPROVAL FOR WAIVER OF CROSS-GUARANTY

FDIC-92-365kk

   WHEREAS, Hees International Bancorp, Inc., Toronto, Ontario ("Hees"), the company which is under common control with Pacific First Bank, A FSB, Seattle, Washington ("Pacific"), has made a proposal to inject capital into The Lincoln Savings Bank, FSB, New York City, New York ("Lincoln"), as set forth more fully, below, and in a draft dated December 22, 1992, of a certain Agreement relating to Lincoln ("Agreement"), between and among Hees, the Office of Thrift Supervision ("OTS"), Lincoln, and certain other parties; and

   WHEREAS, the commitment to inject capital, as detailed below and in such Agreement, is conditional upon the Federal Deposit Insurance Corporation ("FDIC") exempting, pursuant to section 5(e)(5)(A) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. §1815(e)(5)(A), Pacific from any liability for any losses incurred or reasonably anticipated to be incurred by the FDIC in connection with any default of or any FDIC assistance to Lincoln for a period of time; and

   WHEREAS, Hees has requested the FDIC to grant Pacific such an exemption; and

   WHEREAS, Hees has advised the FDIC that a definitive agreement for the sale of Pacific has been signed and is expected to close in 1993; and

   WHEREAS, the FDIC has not provided any assistance to Lincoln and has not been advised by the OTS of any OTS opinion concerning Lincoln, the receipt of which by the FDIC would result in Lincoln's being "in danger of default" within the meaning of section 3(x) of the Act, 12 U.S.C. §1813(x); and

   WHEREAS, the Board of Directors of the FDIC, having fully considered the facts and information relating to the foregoing request for exemption from losses, and in consideration of the commitments of Hees and Unicorp Energy Corporation ("UEC") contained in the Agreement, has concluded that an exemption is in the best interest of the Bank Insurance Fund, and that an exemption from liability under section 5(e) of the Act, 12 U.S.C. §1815(e), should be and hereby is granted, subject to the conditions and restrictions set forth below.

   IT IS THEREFORE:

   [.1]1. ORDERED, that the exemption granted by this ORDER CONDITIONALLY GRANTING APPROVAL FOR WAIVER OF CROSS-GUARANTY ("ORDER") shall be conditioned upon the injection by UEC of $15,000,000 of capital into Lincoln in accordance with the terms of the Agreement with such changes as are acceptable to the Regional Director (Supervision) of the FDIC's New York Regional Office ("Regional Director");

   2. IT IS FURTHER ORDERED, that the exemption granted by this ORDER shall be conditioned upon the making by UEC of a funded commitment to infuse up to an additional $15,000,000 of capital into Lincoln in accordance with the terms of the Agreement with such changes as are acceptable to the Regional Director in the event specified capital targets are not achieved over the period set forth in the capital directive to be served upon Lincoln by the OTS, the terms of which are incorporated herein by reference.

   [.2]3. IT IS FURTHER ORDERED, that the exemption granted by this ORDER shall be conditioned upon the placement of the stock of Lincoln, including any newly issued preferred stock, in a trust administered by an independent trustee (as defined in the December 17, 1992 draft of the Trust Agreement) ("Trust Agreement"), acceptable to the OTS, who shall exercise any rights associated with ownership of the stock, and shall arrange for the disposition and sale of all assets of the trust, all of the foregoing in accordance with the terms of the Agreement and the related Trust Agreement with such changes as are acceptable to the Regional Director.

   [.3]4. IT IS FURTHER ORDERED, that the exemption granted by this ORDER shall be conditioned upon, as long as Pacific is under common control with Hees, Pacific's operating independently of Lincoln and not in a fashion so as to intertwine its operations with those of Lincoln, unless the prior non-objection of the Regional Director is obtained.

   [.4]5. IT IS FURTHER ORDERED, that the exemption granted by this ORDER will apply only to such losses as may be incurred or are reasonably anticipated to be incurred in connection with the default of, or FDIC assistance to Lincoln.

   6. IT IS FURTHER ORDERED, that the exemption granted by this ORDER shall extend to any liability for any loss of the FDIC incurred or reasonably anticipated to be incurred at any time prior to the expiration of the trust described in paragraph 3 in connection with the default of or FDIC assistance to Lincoln (without regard to whether Pacific has received a written notice under section 5(e) of the Act, 12 U.S.C. §1815(e), prior to the expiration of such trust); provided further, that, notwithstanding any other provision of this ORDER, no liability of Pacific with respect to Lincoln shall arise under section 5(e) of the Act, 12 U.S.C. §1815(e), after the acquisition of control of Pacific (within the meaning of the Act) by any person(s) acquiring control of Pacific unless such person(s) has (have) a relationship to Lincoln such that Pacific and Lincoln are "commonly controlled depository institutions" within section 5(e) of the Act, 12 U.S.C. §1815(e).

   [.5]7. IT IS FURTHER ORDERED, that the exemption granted by this ORDER will apply to and only to (i) Pacific or (ii) any person that acquires control of Pacific after receiving all necessary regulatory approvals, provided that Lincoln is not, after such acquisition of control of Pacific, a "commonly controlled insured depository institution" with Pacific within the meaning of section 5(e) of the Act, 12 U.S.C. §1815(e).

   By direction of the Board of Directors.

   Dated at Washington, D.C., this 22nd day of December, 1992.

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