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FDIC Enforcement Decisions and Orders

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   [11,687] In the Matter of Hartford-Carlisle Savings Bank, Carlisle, Iowa, Docket No. 99-145c&b (1-5-00)

   A cease and desist order was issued, based on findings by the FDIC that it had reason to believe that respondent had engaged in unsafe and unsound practices. (This order was terminated by order of the FDIC dated 2-25-00; see ¶16,254)

   [.1] Loans—Extensions of Credit—Curtail to Existing Borrowers
   [.2] Loans—Repurchasing Restricted
   [.3] Prohibition, Removal or Suspension—Prohibition From—Participation in Conduct of Affairs
   [.4] Board of Directors—Implement Procedures to Guard Bank Records

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   [.5] Dividends—Dividends Restricted
   [.6] Compensation—Restricted
   [.7] Brokered Deposits—Restricted
   [.8] Liabilities—Procedure for Payment
   [.9] Shareholders—Disclosure of Cease and Desist Order Required

In the Matter of

HARTFORD-CARLISLE SAVINGS
BANK

CARLISLE, IOWA
(Insured State Nonmember Bank)
TEMPORARY ORDER TO
CEASE AND DESIST

FDIC-99-145c&b

   The Federal Deposit Insurance Corporation ("FDIC") has determined that the unsafe or unsound banking practices which Hartford Carlisle Savings Bank, Carlisle, Iowa ("Bank"), is alleged to have engaged in, as specified in the NOTICE OF CHARGES AND OF HEARING ("NOTICE") attached hereto and incorporated herein by reference, and/or the continuation thereof by the Bank, are likely to cause insolvency or significant dissipation of the assets or earnings of the Bank, or are likely to weaken the condition of the Bank or otherwise prejudice the interests of the depositors of the Bank prior to the completion of the proceedings against the Bank conducted pursuant to section 8(b) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. § 1818(b).
   Therefore, the FDIC hereby issues this TEMPORARY ORDER TO CEASE AND DESIST ("TEMPORARY ORDER") and hereby gives notice pursuant to section 8(c)(1) of the Act, 12 U.S.C. § 1818(c)(1), that the Bank and its institution-affiliated parties, successors and assigns, be and hereby are ORDERED as follows:

   [.1] 1. (a) Without the prior written consent of the Regional Director of the FDIC's Kansas City Regional Office ("Regional Director") and the Superintendent of Banking for the State of Iowa ("Superintendent"), the Bank shall not, directly or indirectly, make, extend or renew any extensions of credit to any person who is not an established borrower of the Bank;
   (b) Without the prior written consent of the Regional Director and the Superintendent, the Bank shall not, directly or indirectly, make, extend or renew any extensions of credit to an established borrower of the Bank or his or her related interest(s) in an amount that, when added to any other extensions of credit to the borrower and his or her related interest(s) made since the effective date of this TEMPORARY ORDER, would exceed $50,000;
   (c) The Bank shall not extend, direct or indirectly, credit to, or for the benefit of, any borrower who has a loan or other extension of credit with the Bank that has been charged off or classified, in whole or in part, "Loss," "Doubtful," or "Substandard," and is uncollected, without the prior written consent of the Regional Director and the Superintendent; and
   (d) As used in this TEMPORARY ORDER, the terms:

       (i) "extension of credit" shall be defined as provided in section 215.3 of Regulation O of the Board of Governors of the Federal Reserve System, 12 C.F.R. § 215.3, ("Regulation O");
       (ii) "company" shall be defined as provided in section 215.2(b) of Regulation O, 12 C.F.R. § 215.2(b);
       (iii) "related interest" shall be defined as provided in section 215.2(n) of Regulation O, 12 C.F.R. § 215.2(n); and
       (iv) the phrase "established borrower of the Bank" shall mean any borrower with an existing extension of credit from the Bank, in good standing and not more than 30 days past due on any existing extension of credit from the Bank.

   [.2] 2. The Bank shall not repurchase any loan participation sold without recourse, without the prior written consent of the Regional Director and the Superintendent.
   3. Paragraph 1 of this TEMPORARY ORDER notwithstanding, the Bank shall not advance, directly or indirectly, any additional funds to, or for the benefit of, any borrower identified in Attachment A, attached hereto, without the prior written consent of the Regional Director and the Superintendent.

   [.3] 4. The Bank, by action of its board of directors, shall immediately terminate the lending authority of Dirk A. Thierer and his authority to make or authorize the making of {{3-31-00 p.C-4865}} any entry in the Bank's general and subsidiary ledgers.

   [.4] 5. The Bank, by action of its board of directors, shall immediately adopt and implement procedures to prevent any officer, director, employee of the Bank or other person from destroying, erasing or altering or otherwise falsifying any Bank record, or removing any such record from the Bank's premises.

   [.5] 6. The Bank shall not pay or authorize the payment of any dividends, or the transfer of any asset, directly or indirectly, to, or for the benefit of, any shareholder, without the prior written consent of the Regional Director and the Superintendent.

   [.6] 7. The Bank shall not increase the salary, benefits, or other compensation of any officer, director, employee, agent, or shareholder of the Bank, nor pay any bonuses, nor make or agree to make any payment, directly or indirectly, or transfer any asset to, or for the benefit of, any officer, director, employee, agent, or shareholder of the Bank, without the prior written consent of the Regional Director and the Superintendent.

   [.7] 8. The Bank shall not accept, renew or roll over any brokered deposit, as defined in section 337.6(a)(2) of the FDIC Rules, 12 C.F.R. § 337.6(a)(2), without the prior written consent of the Regional Director and the Superintendent.

   [.8] 9. If, as a result of (i) any court or arbitration proceeding or (ii) any settlement negotiations, the Bank is found liable for breach of any contract ("award") or agrees to settle any contract claim ("settlement"), the Bank:

       (a) shall immediately notify the Regional Director in writing of such award or settlement; and
       (b) shall not make any payment pursuant to such award or settlement for a period of 90 days from the date such written notice is received by the Regional Director; provided that the Regional Director may approve any such payment, in whole or in part, in writing prior to the expiration of the 90 day period.

   [.9] 10. No more than 20 days from the effective date of this TEMPORARY ORDER, the Bank shall send to its shareholders a description of this TEMPORARY ORDER. The description shall fully describe this TEMPORARY ORDER in all material respects. The description and any accompanying communication, statement or notice shall be sent to the FDIC, Registration and Disclosure Section, 550 17th Street, N.W., Washington D.C. 20429, for review at least 10 days prior to dissemination to shareholders. Any changes requested by the FDIC shall be made prior to dissemination of the description, communication, notice or statement.
   This TEMPORARY ORDER shall be effective immediately upon service on the Bank and shall remain in full force and effect, pending the completion of the administrative proceedings instituted pursuant to the foregoing NOTICE.
   Pursuant to delegated authority.
   Dated at Washington D.C., this 5th day of January, 2000.

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