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{{7-31-94 p.C-3579}}
   [10,943] In the Matter of Commercial Bank and Trust Company, Lowell, Massachusetts, Docket No. FDIC-93-235pcas (2-1-94).

   FDIC orders supervisory prompt corrective action directive requiring undercapitalized bank to recapitalize or agree to a sale or merger. (This order was terminated by order of the FDIC dated 5-10-94; see ¶15,867.)

   [.1] Capital—Tier 1 Capital—Increase/Maintain—Methods
   [.2] Sale or Merge of Bank—Directors to Consider
   [.3] Affiliated Organizations—Transactions With—Restricted

In the Matter of

COMMERCIAL BANK AND TRUST
COMPANY

LOWELL, MASSACHUSETTS
(Insured State Nonmember Bank)
SUPERVISORY PROMPT
CORRECTIVE ACTION
DIRECTIVE


{{7-31-94 p.C-3580}}Commercial Bank and Trust Company, Lowell, Massachusetts ("Bank"), being a critically undercapitalized depository institution as that term is defined in section 38 (b)(1) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. § 1831o(b)(1), and section 325.103 of the Rules and Regulations of the Federal Deposit Insurance Corporation ("FDIC"), 12 C.F.R. § 325.103, based upon the results of the FDIC's Report of Examination of the Bank as of November 8, 1993, which shows its capital level to be at a 1.48% Tier 1 leverage ratio, a 2.00% Tier 1 risk-based capital ratio, and a 3.20% total risk-based capital ratio, and having received a NOTICE OF INTENT TO ISSUE A SUPERVISORY PROMPT CORRECTIVE ACTION DIRECTIVE ("NOTICE") detailing the actions which will be required to be taken by the Bank and/or the proscriptions which will be imposed on the Bank pursuant to section 38 of the Act, 12 U.S.C. § 1831o, and section 308.201(a) of the FDIC Rules of Practice and Procedure, 12 C.F.R. § 308.201 (a), and the Bank having failed to file a response to the NOTICE pursuant to section 308.201(c) of the FDIC Rules of Practice and Procedure, 12 C.F.R. § 308.201(c), the FDIC hereby issues this SUPERVISORY PROMPT CORRECTIVE ACTION DIRECTIVE pursuant to the provisions of section 38 of the Act, 12 U.S.C. § 1831o, and section 308.201(d) of the FDIC Rules of Practice and Procedure, 12 C.F.R. § 308.201(d).

SUPERVISORY PROMPT CORRECTIVE ACTION DIRECTIVE

   [.1] IT IS HEREBY DIRECTED, that by February 15, 1994, the Bank shall sell enough shares or obligations of the Bank so that the Bank's Part 325 Tier 1 capital equals or exceeds five (5.0) percent of the Bank's total assets, the Bank's Part 325 total risk-based capital ratio equals or exceeds ten (10.0) percent and the Bank's Part 325 Tier 1 riskbased capital ratio equals or exceeds six (6.0) percent.

   [.2] FURTHER DIRECTED, that should the Bank fail to recapitalize as provided herein, by February 15, 1994, the Bank shall merge with another insured depository institution or be acquired by a depository institution holding company that, if the Bank were so merged or acquired, the merger or acquisition would further the purpose of section 38 of the Act, 12 U.S.C. § 1831o.
FURTHER DIRECTED, that should the merger of the Bank and another insured depository institution take place, by February 28, 1994, the resulting institution shall (i) increase its Part 325 Tier 1 capital to or in excess of five (5.0) percent of the Bank's total assets; (ii) increase its Part 325 total risk-based capital ratio to or in excess of ten (10.0) percent and (iii) increase its Part 325 Tier 1 risk-based capital ratio to or in excess of six (6.0) percent.

   [.3] FURTHER DIRECTED, that the Bank shall not enter into transactions with affiliates without the prior written consent of the FDIC. For purposes of this DIRECTIVE, the term "affiliate" shall have the same meaning ascribed to it in 12 U.S.C. § 271c.
   FURTHER DIRECTED, that the provisions of this SUPERVISORY PROMPT CORRECTIVE ACTION DIRECTIVE shall not affect the obligations of the Bank pursuant to any other action issued against the Bank by the FDIC, including the existing Order to Cease and Desist issued by the FDIC against the Bank on October 5, 1992, and concurred in by the Commissioner of Banks for the Commonwealth of Massachusetts.
   Each provision of this SUPERVISORY PROMPT CORRECTIVE ACTION 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 SUPERVISORY PROMPT CORRECTIVE ACTION DIRECTIVE shall remain effective and enforceable until the Bank has been adequately capitalized on average for four consecutive calendar quarters, except to the extent that any provision shall be modified, terminated, suspended, or set aside by the FDIC.
   Dated at Washington, D.C., this 1st day of February, 1994.
   Pursuant to delegated authority.

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