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FDIC Enforcement Decisions and Orders

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{{7-31-96 p.C-3739}}
   [11,026] In the Matter of Capital Bank, Downey, California, Docket No. FDIC-94-42PCAS (8-11-94).

   Bank to take prompt corrective action to restore capital adequacy. (This order was terminated by order of the FDIC dated 10-4-94; see ¶15,920.)

[.1] Capital—Increase—Sale of Shares
[.2] Capital—Increase—Sale of Bank
[.3] Deposits—Interest Paid—Prevailing Rates
[.4] Assets—Growth—Restricted

In the Matter of

CAPITAL BANK
DOWNEY, CALIFORNIA
(Insured State Nonmember Bank)
SUPERVISORY
PROMPT CORRECTIVE ACTION
DIRECTIVE

FDIC-94-42PCAS

   Capital Bank, Downey, California ("Bank"), being a significantly undercapitalized insured 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 Federal Deposit Insurance Corporation's ("FDIC") Rules and Regulations, 12 C.F.R. § 325.103, based upon the FDIC's Report of Examination of the Bank as of November 2, 1993, which shows its capital levels to be at a 3.5 percent Tier 1 leverage ratio, a 3.97 percent Tier 1 risk-based capital ratio and a 5.2 percent total risk-based capital ratio, and having received a NOTICE OF INTENT TO ISSUE A SUPERVISORY {{7-31-96 p.C-3740}}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 and Regulations, 12 C.F.R. § 308.201(d).

SUPERVISORY PROMPT CORRECTIVE ACTION DIRECTIVE

   [.1] IT IS HEREBY DIRECTED, that the Bank shall sell enough voting shares of the Bank so that the amount of capital raised by such sale shall be no less than $3,600,000.

   [.2] FURTHER DIRECTED, that the Bank accept an offer to be acquired by another depository institution holding company or insured depository institution, if notified in writing by the FDIC, one or more grounds exist for appointing a conservator or receiver for the Bank under section 11(c)(5) of the Act, 12 U.S.C. § 1821(c)(5).

   [.3] FURTHER DIRECTED, that the interest rates that the Bank pays on deposits be restricted to the prevailing rates of interest on deposits of comparable amounts and maturities in the Bank's normal market area, as determined by the FDIC.

   [.4] FURTHER DIRECTED, that the Bank's asset growth be restricted such that its quarterly average assets not exceed $85,000,000.
   FURTHER DIRECTED, that the Bank employ a qualified Chief Executive Officer, subject to the prior approval of the FDIC.
   FURTHER DIRECTED, that this SUPERVISORY PROMPT CORRECTIVE ACTION DIRECTIVE shall become effective immediately upon its receipt by the Bank.
   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 (4) 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 11th day of August, 1994.
   Pursuant to delegated authority.

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