(This order was terminated by order of the FDIC dated 10-22-03; see ¶16,358.)
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.
[.1] Management—Qualifications Specified
[.2] Board of Directors—Committee to Review Compliance with Cease and
Desist Order Required
{{11-30-01 p.C-5195}}
[.3] Management—Management Report Required
[.4] Management—Management Plan Required
[.5] Capital—Increase Required
[.6] Loan Loss Reserve—Establishment of or Increase Required
[.7] Profit Plan—Preparation of Plan Required
[.8] Assets—Charge-off or Collection
[.9] Loans—Extensions of Credit—To Borrowers with Existing Adversely
Classified Credits
[.10] Loan Policy—Preparation or Revision of Policy Required
[.11] Technical Exceptions—Correction of Technical Exceptions Required
[.12] Loans—Internal Review Procedure
[.13] Loan Officer, Limits on Authority
[.14] Violations of Law—Correction of Violations Required
[.15] Insurance—Credit Life Insurance Premiums Policy Required
[.16] Dividends—Dividends Restricted
[.17] Reports of Condition and Income—Amendment Required
[.18] Assets—Special Mention—Eliminate Deficiencies
In the Matter of
FARMERS AND MERCHANTS BANK
TREZEVANT, TENNESSEE
(Insured State Nonmember Bank)
ORDER TO CEASE AND DESIST
FDIC-01-069b
Farmers and Merchants Bank, Trezevant, Tennessee ("Bank"),
having been advised of its right to a Notice of Charges and of Hearing
detailing the unsafe or unsound banking practices, violations of law
and/or regulations, and contraventions of policy alleged to have been
committed by the Bank and of its right to a hearing on the alleged
charges under section 8(b)(1) of the Federal Deposit Insurance Act
("Act"), 12 U.S.C. §1818(b)(1), and having waived those
rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF AN
ORDER TO CEASE AND DESIST ("CONSENT AGREEMENT") with counsel for
the Federal Deposit Insurance Corporation ("FDIC"), dated August
27, 2001, whereby solely for the purpose of this proceeding and without
admitting or denying the alleged charges of unsafe or unsound banking
practices and violations of law and/or regulations, the Bank consented
to the issuance of an ORDER TO CEASE AND DESIST ("ORDER") by the
FDIC.
The FDIC considered the matter and determined that it had reason to
believe that the Bank had engaged in unsafe or unsound banking
practices and had committed violations of law and/or regulations. The
FDIC, therefore, accepted the CONSENT AGREEMENT and issued the
following:
ORDER TO CEASE AND DESIST
IT IS HEREBY ORDERED that the Bank, its director, officers,
employees, agents, and other institution-affiliated parties (as that
term is defined in Section 3(u) of the Act, 12 U.S.C. §1813(u)), and
its successors and assigns cease and desist from the following unsafe
or unsound banking practices and violations:
(a) engaging in hazardous lending and lax collection practices;
(b) operating with inadequate capital in relation to the kind and
quality of assets held by the Bank;
(c) operating with a large volume of poor quality loans;
(d) operating with an inadequate loan valuation reserve;
(e) operating in violation of Part 323 of the FDIC's Rules and
Regulations, 12 C.F.R. §323; in violation of Part 365 of the FDIC's
Rules and Regulations, 12 C.F.R. §365; in contravention of Part 364
of the FDIC's Rules and Regulations, Standards for Safety and
{{11-30-01 p.C-5196}}
Soundness, 12 C.F.R. §364; in contravention of the Interagency
Policy Statement on the Allowance for Loan and Lease Losses; in
contravention of the Interagency Policy Statement on Internal Audit
Function and Its Outsourcing; and in violation of Sections 45-2-402 and
45-2-1102 of the Tennessee Code Annotated, T.C.A. §45-2-402 and
§45-2-1102 (2001).
(f) operating with management whose policies and practices are
detrimental to the Bank and jeopardize the safety of its deposits; and
(g) operating with a board of directors which fails to provide adequate
supervision over and direction to the active management of the Bank.
IT IS FURTHER ORDERED that the Bank, its institution-affiliated
parties, and its successors and assigns, take affirmative action as
follows:
[.1] (a) During the life of this ORDER, the Bank shall have management
qualified to restore the Bank to a sound condition. Such management
shall include a chief executive officer and an experienced senior
lending officer responsible for supervising the Bank's overall lending
function.
(b) Present management shall be assessed on its ability to:
(i) Comply with the requirements of this ORDER;
(ii) Improve and thereafter maintain the Bank in a safe and sound
condition, including asset quality, capital adequacy, liquidity
adequacy, earnings adequacy, and sensitivity to market risk; and
(iii) Comply with all applicable State and Federal laws, regulations,
and FDIC and Federal Financial Institutions Examination Council policy
statements.
(c) During the life of this ORDER, the Bank shall notify the
Regional Director of the Memphis Regional Office ("Regional
Director") and the Commissioner of Department of Financial
Institutions for the State of Tennessee ("Commissioner") in
writing of any resignations or terminations of any members of its board
of directors or any of its senior executive officer(s) within 15 days
of the event. In addition, the Bank shall comply with Section 32 of the
Act, 12 U.S.C. §1831i.
[.2] (d) Within 30 days from the effective date of this ORDER, the board of
directors shall establish a committee of the board of directors with
the responsibility to ensure that the Bank complies with the provisions
of this ORDER. At least two-thirds of the members of such committee
shall be independent, outside directors as defined herein. The
committee shall report monthly to the entire board of directors, and a
copy of the report and any discussion relating to the report or the
ORDER shall be included in the minutes of the board of directors.
Nothing contained herein shall diminish the responsibility of the
entire board of directors to ensure compliance with the provisions of
this ORDER.
(e) For the purposes of this ORDER, an "outside director" shall
be an individual:
(i) Who shall not be employed, in any capacity, by the Bank or
its affiliates other than as a director of the Bank or an affiliate;
(ii) Who shall not own or control more than ten (10%) percent of the
voting stock of the Bank or its holding company;
(iii) Who shall not be indebted to the Bank or any of its affiliates in
an amount greater than five (5%) percent of the Bank's equity capital
and reserves;
(iv) Who shall not be related to any directors, principal shareholders
of the Bank or affiliates of the Bank; and
(v) Who shall be a resident of, or engage in business in, the Bank's
trade area.
[.3] 2. (a) Within 60 days from the date of this ORDER, the board of
directors shall review and make a written report ("Management
Report") on the Bank's management needs in the lending area. The
Management Report shall incorporate an analysis of the Bank's
management and staffing requirements and shall, at a minimum:
(i) Identify both the number and type of positions needed to
properly supervise the Bank's lending functions, giving appropriate
consideration to the Bank's loan volume, customer base and the number
of problem credits;
(ii) Provide a clear and concise description of the general duties and
responsibilities for lending officers and their support staff,
including in such review, the necessity for adherence to the Bank's
loan policies and procedures;
(iii) Identify the skills, experience and pay required for each
position;
(iv) Provide an evaluation of the Bank's senior management and lending
officials, indicating whether Bank officials possess
{{11-30-01 p.C-5197}}
the necessary
lending and collection experience and qualifications required to
adequately perform present and anticipated duties, and also indicating
whether the Bank's current direct and indirect compensation of such
persons is reasonable in light of the Bank's current financial
condition;
(v) Establish a plan to recruit, hire and/or replace personnel based on
ability and experience;
(vi) Establish a plan providing for periodic evaluation of each
individual's job performance; and
(vii) Provide for periodic review of Bank's management and updating of
lending policies and procedures.
(b) The board of directors shall obtain the services of an outside
consultant, acceptable to FDIC and the Commissioner, who is
knowledgeable in the area of lending, collections and personnel
evaluation to assist the board of directors in reviewing the Bank's
management needs and preparing the Management Report. The acceptability
of the consultant(s) shall be based on the consultant's ability to
advise the Bank in each of the areas identified in Paragraph 2(a).
[.4] (c) Within 90 days of the effective date of this ORDER, the board of
directors, with the assistance of the outside consultant(s), shall
prepare a written plan of implementation ("Plan") addressing the
findings of the Management Report. The Plan shall specify the actions
to be taken by the board of directors and the time frames for each
action.
(d) Within 90 days of the effective date of this ORDER, the board of
directors shall prepare a written report ("Written Report") which
shall contain a recitation identifying:
(i) the recommendations made by the outside consultant(s) which
have been incorporated in the Management Report and Plan;
(ii) a recitation identifying the recommendations made by the outside
consultant(s) which were not incorporated in the Management Report and
Plan and the reasons for not including such recommendations;
(iii) a copy of any report(s) prepared by the outside consultant(s).
(e) A copy of the Management Report, Plan, and Written Report
shall be submitted to the Regional Director and the Commissioner for
review and comment. Within 30 days from receipt of any comment, and
after consideration of such comment, the board of directors shall
approve the Management Report and Plan, which approval shall be
recorded in the minutes of the meeting of the board of directors. It
shall remain the responsibility of the board to fully implement the
Plan within the specified time frames. In the event the Plan, or any
portion thereof, is not implemented, the board shall immediately advise
the Regional Director and the Commissioner, in writing, of the specific
reasons for deviating from the Plan.
[.5] 3. (a) Within 90 days from the effective date of this ORDER, the Bank
shall have Tier I capital equal to or greater than seven percent (7%)
percent of the Bank's Part 325 total assets and a total risk-based
capital ratio equal to or greater than eight percent (8%). Within 180
days from the effective date of this ORDER, the Bank shall have Tier I
capital equal to or greater than seven and one-half percent (7 1/2%)
percent of the Bank's Part 325 total assets. Thereafter, during the
life of this ORDER, the Bank shall maintain Tier I capital equal to or
greater than seven and one-half per cent (7 1/2%) percent of the
Bank's Part 325 total assets and maintain a total risk-based capital
ratio equal to or greater than eight (8%) percent.
(b) Any increase in Tier I capital necessary to meet the requirements
of Paragraph 3(a) of this ORDER may be accomplished by the following:
(i) The sale of new securities in the form of common stock or
non-cumulative perpetual preferred stock; or
(ii) The direct contribution of cash by the directors, shareholders, or
parent Bank holding company of the Bank; or
(iii) Any other method acceptable to the FDIC.
(c) If all or part of the increase in Tier I capital required by
Paragraph 3(a) of this ORDER is accomplished by the sale of new
securities, the board of directors of the Bank shall adopt and
implement a plan for the sale of such additional securities, including
the voting of any shares owned or proxies held or controlled by them in
favor of the plan. Should the implementation of the plan involve a
public distribution of the Bank's securities (including a distribution
limited only
{{11-30-01 p.C-5198}}
to the Bank's existing shareholders), the Bank shall
prepare offering materials fully describing the securities being
offered, including an accurate description of the financial condition
of the Bank and the circumstances giving rise to the offering, and any
other material disclosures necessary to comply with the Federal
securities laws. Prior to the implementation of the plan and, in any
event, not less than 30 days prior to the dissemination of such
materials, the plan and any materials used in the sale of the
securities shall be submitted to the FDIC, Division of Supervision,
Registration and Disclosure Section, 550 17th Street, N.W., Room F-250,
Washington, D.C. 20429 for review. Any changes requested to be made in
the plan or materials by the FDIC shall be made prior to their
dissemination. If the Regional Director and the Commissioner allow any
part of the increase in Tier I capital to be provided by the sale of
non-cumulative perpetual preferred stock, then all terms and conditions
of the issue, including but not limited to, those terms and conditions
relative to the interest rate and any convertibility factor, shall be
presented to the Regional Director and the Commissioner for prior
approval.
(d) In complying with the provisions of Paragraph 3 of this ORDER, the
Bank shall provide to any subscriber and/or purchaser of the Bank's
securities written notice of any planned or existing development or
other changes which are materially different from the information
reflected in any offering materials used in connection with the sale of
Bank securities. The written notice required by this paragraph shall be
furnished within 10 days from the date such material development or
change was planned or occurred, whichever is earlier, and shall be
furnished to every subscriber and/or purchaser of the Bank's
securities who received or was tendered the information contained in
the Bank's original offering materials.
(e) For purposes of this ORDER the terms "Tier I capital,"
"Part 325 total assets," and "total risk-based capital
ratio" shall have the meanings ascribed to them in Subsections
325.2(t), 325.2(v), and 325.2(w) of the FDIC's Rules and Regulations,
12 C.F.R. §§ 325.2(t), 325.2(v) and 325.2(w). The "Capital
Calculations" schedule on page 81 of the Joint Report of Examination
provides the method for determining the ratio of Tier I capital to Part
325 total assets and for determining the ratio of total risk-based
capital to risk-weighted assets as required by this ODER.
(f) The Bank shall not lend funds directly or indirectly, whether
secured or unsecured, to any purchaser of Bank stock or to any investor
by any other means for any portion of any increase in Tier I capital
required herein.
[.6] 4. (a) Within 30 days from the effective date of this ORDER, the Bank
shall establish and shall thereafter maintain, through charges to
current operating income, an adequate valuation reserve for loan and
lease losses. In determining the adequacy of the valuation reserve for
loan and lease losses, the board of directors of the Bank shall at a
minimum consider the following:
(i) Prevailing instructions contained in the Federal Financial
Institutions Examination Council booklet entitled
"Instructions—Consolidated Reports of Condition and Income";
(ii) The volume and mix of the existing loan portfolio, including the
volume and severity of nonperforming loans and adversely classified
credits, as well as an analysis of net charge-offs experienced on
previously adversely classified loans;
(iii) The extent to which loan renewals and extensions are used to
maintain loans on a current basis and the degree of risk associated
with such loans;
(iv) The trend in loan growth, including any rapid increase in loan
volume within a relatively short time period;
(v) General economic conditions affecting the collectibility of the
Bank's loans;
(vi) Previous loan loss experience by loan type, including the trend of
net charge-offs as a percent of average loans over the past several
years;
(vii) Any risks resulting from the Bank's out-of-territory lending;
(viii) Any other factors appropriate in determining future valuation
reserves.
(b) Prior to the submission of any Report of Condition or Report
of Income, the board of directors of the Bank shall review the adequacy
of the Bank's valuation reserve for loan and lease losses. The minutes
of the board meetings at which each review is undertaken shall indicate
the results of the review, the amount of any increase to the reserve,
and the basis for the amount of the
{{11-30-01 p.C-5199}}
valuation reserve. The criteria for
the review shall be as set forth in Paragraph 4(a).
(c) Notwithstanding the provisions of Paragraph 4(a) and 4(b) above,
the Bank shall achieve, within 30 days of the effective date of this
ORDER, a valuation reserve for loan and lease losses, after charge-off
of loans classified "Loss" and one-half of loans classified
"Doubtful" as required in Paragraph 6(a) below, of not less than
$1,600,000, and shall thereafter maintain, through changes to current
operating income, an adequate valuation reserve for loan and lease
losses.
(d) In the event that the Regional director and/or the Commissioner
determine, at subsequent examinations and/or visitations, that the
Bank's valuation reserve for loan and lease losses is inadequate, the
Bank shall amend its Consolidated Reports of Condition and Income in
accordance with Paragraph 14, below.
(e) The requirements of Paragraph 4(c) above are not to be construed as
a standard for future operations.
[.7] 5. (a) Within 60 days from the effective date of this ORDER, and within
the first 30 days of each calendar year thereafter, the board of
directors shall develop a written profit plan ("Profit Plan")
consisting of goals and strategies for improving the earnings of the
Bank for each calendar year. The written Profit Plan shall include, at
a minimum:
(i) Identification of the major areas in, and means by which the
board of directors will seek to improve the Bank's operating
performance;
(ii) Realistic and comprehensive budgets;
(iii) A budget review process to monitor the income and expenses of the
Bank to compare actual figures with budgetary projections on not less
than a quarterly basis; and
(iv) A description of the operating assumptions that form the basis
for, and adequately support, major projected income and expense
components.
(b) Such written Profit Plan and any subsequent modification
thereto shall be submitted to the Regional Director and the
Commissioner for review and comment. No more than 30 days after the
receipt of any comment from the Regional Director or the Commissioner,
the board of directors shall approve the written Profit Plan which
approval shall be recorded in the minutes of the board of directors.
Thereafter, the Bank, its directors, officers, and employees shall
follow the written Profit Plan and/or any subsequent modification.
[.8] 6. (a) Within 10 days from the effective date of this ORDER, the Bank
shall eliminate from its books, by charge-off or collection, all assets
classified "Loss" and one-half of assets classified
"Doubtful" as of December 31, 2000, that have not been previously
collected or charged-off. Reduction of these assets through proceeds of
other loans made by the Bank is not considered collection for the
purpose of this paragraph.
(b) Within 60 days from the effective date of this ORDER, the Bank
shall formulate and submit to the Regional Director and the
Commissioner for review and approval a written plan of action directed
at lessening the Bank's risk position in each line of credit which was
classified "Substandard" or "Doubtful" as of December 31,
2000, and which aggregated $100,000 or more. Such plan shall include,
but not be limited to, the following:
(i) Target dollar levels to which the Bank will reduce each line
of credit or other asset within three months, six months, and twelve
months from the effective date of this ORDER; and
(ii) Provisions for the submissions of monthly written progress
reports, under this Paragraph 6, to the Bank's board of directors for
review and recordation in the board minutes.
(c) As used in Paragraph 6 the word "reduce" means (1) to
collect, (2) to charge-off, or (3) to sufficiently improve the quality
of assets adversely classified to warrant removing any adverse
classification, as determined by the FDIC.
[.9] 7. (a) Beginning with the effective date of this ORDER, the Bank shall
not extend, directly or indirectly, any additional 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" or "Doubtful" and is uncollected. The
requirements of this paragraph shall not prohibit the Bank from
renewing (after collection in cash of interest due from the borrower)
any credit already extended to any borrower.
(b) Beginning with the effective date of
{{11-30-01 p.C-5200}}
this ORDER, the Bank shall not
make any further extensions of credit, directly or indirectly, to any
borrower whose loans are adversely classified "Substandard" as of
December 31, 2000, without prior approval by the Bank's board of
directors after the board's affirmative determination, as reflected in
the minutes of the meeting, that the extension of credit is in full
compliance with the Bank's loan policy, that the extension of credit
is necessary to protect the Bank's interest or is adequately secured,
that credit analysis has determined the customer to be creditworthy,
and that all necessary loan documentation is on file, including current
financial and cash flow information and satisfactory appraisal, title
and lien documents. The minutes shall also include the following
information about the extension of credit; (i) The amount adversely
classified as of December 31, 2000; (ii) the current balance; (iii) the
amount of credit requested; (iv) a description of the collateral and
its value securing the credit; and (v) a full description of the
documentation presented to the board of directors including the date of
the borrower's most recent financial information and the borrower's
current income or cash flow data.
[.10] 8. (A) Within 60 days from the effective date of this ORDER, the Bank
shall review its written loan policy and make whatever changes may be
necessary to provide for the safe and sound administration of all
aspects of the lending function. Specific procedures shall be included
so that the loan portfolio of all loan officers is monitored on at
least a quarterly basis to ensure continuing compliance with the
Bank's loan policy. Additionally, the review shall address the
exceptions to and implement the recommendations for the loan policy
contained on pages 23-26 of the February 12, 2001 Report of
Examination. Evidence of the review and establishment of such
procedures shall be reduced to writing and included with the meeting
minutes of the board of directors. At the conclusion of each review, a
written report shall be submitted to the board for review and approval,
noting any exceptions to or deviations from the Bank's lending policy,
and listing the loan officer responsible for the exception or
deviation. Said report shall be made a part of the minutes of the Board
meeting. Any changes to the Bank's loan policy, as well as any
procedures adopted to insure compliance with current loan policies
pursuant to this Paragraph, shall be in a form and manner acceptable to
the Regional Director and the Commissioner as determined at subsequent
examinations and/or visitations.
(b) Beginning with the effective date of this ORDER, the Bank shall
review and strengthen its collection policies and procedures to include
actions to be taken against delinquent borrowers and adopt and
implement a written policy for placing loans on nonaccrual status in
conformance with the requirements contained in the Federal Financial
Institutions Examination Council booklet entitled
"Instructions—Consolidated Reports of Condition and Income."
[.11] 9. Beginning with the effective date of this ORDER, the Bank shall
initiate and implement a program to strengthen its credit files and
correct the technical exceptions as detailed on pages 75-80 of the
Report of Examination. In all future operations, the Bank shall
ascertain that all appropriate loan documentation is obtained before
credit is extended.
[.12] 10. (a) Within 30 days of the effective date of this ORDER, the board
shall establish an internal loan review and grading system
("System") to periodically review the Bank's loan portfolio and
identify and categorize problem credits. At a minimum the System shall
provide for:
(i) The identification of the overall quality of the loan
portfolio;
(ii) The identification and amount of each delinquent loan;
(iii) An identification or grouping of loans that warrant the special
attention of management;
(iv) For each loan identified, a statement of the amount, and an
indication of the degree of risk, that the loan will not be fully
repaid according to its terms and the reason(s) why the particular loan
merits special attention;
(v) An identification of credit and collateral documentation
exceptions;
(vi) The identification and status of each violation of law, rule or
regulation;
(vii) An identification of loans not in conformance with the Bank's
lending policy, and exceptions to the Bank's lending policy;
(viii) An identification of insider loan transactions;
(ix) An identification of all loans where payment extensions have been
approved;
{{11-30-01 p.C-5201}}
(x) For each loan identified, a determination whether the extension is
supported by a written extension agreement, a statement of the length
of the extension, the reason for the extension, whether interest was
paid current, and the loan officer responsible for approving the
extension; and
(xi) A mechanism for reporting periodically, no less than quarterly, to
the board of directors on the status of each loan identified pursuant
to this Paragraph, and the action(s) taken by management.
(b) A copy of the reports submitted to the board, as well as
documentation of the action taken by the Bank to collect or
strengthen assets identified as problem credits, shall be kept with the
minutes of the board of directors.
(c) Within 30 days from the effective date of this ORDER the
Bank's board of directors shall establish and appoint a loan committee
to review and approve in advance all extensions of credit, and/or
renewals that when aggregated with all other extensions of credit to
that borrower, either, directly or indirectly, exceed or would exceed
$100,000. The review should include financial, income, and cash flow
information, collateral values and lien information, repayment terms,
past performance by the borrower, the purpose of the extension, and
whether the extension complies with the Bank's loan policy and
applicable laws, rules and regulations. The loan committee shall meet
at least twice monthly and shall maintain written minutes which detail
the information reviewed by the loan committee, its conclusions,
approvals, denials, recommendations, and reasons for the approval of
any credit which does not fully comply with the review requirements set
forth in this paragraph. At least monthly, the loan committee shall
submit its written minutes to the board of directors. At least two of
the members of the loan committee shall be independent, outside
directors as defined in Paragraph 1(e) of this ORDER.
[.13] (d) The Board shall continue to limit the lending authority of Bolivar
Branch President, James Michael Rowland, to $50,000 for secured loans
and $10,000 for unsecured loans. Rowland may not combine his lending
limit with that of any other Bank loan officer in order to make loans
in excess of his personal lending limit. In addition, any loan
recommended by Rowland for more than $50,000 but less than $100,000
shall be approved by the Bank President (or the Bank's Finance
Committee if the President is unavailable) before such loan is
extended. All other loans recommended by Rowland shall be reviewed and
approved in advance by the Bank's loan committee. Furthermore, the
loan committee shall review and approve in advance any loan (regardless
of dollar amount) recommended by Rowland which is out-of-territory or
which violates the Bank's loan policy.
[.14] 11. Within 60 days from the effective date of this ORDER, the Bank
shall eliminate and/or correct all violations of law and/or
contraventions of FDIC statements of policy, which are set out on pages
35-38 of the Report of Examination of the Bank as of December 31, 2000.
In addition, the Bank shall henceforth comply with all applicable laws,
regulations and policy statements.
[.15] 12. Within 30 days from the effective date of this ORDER, the board of
directors shall develop and implement a policy governing the
disbursement of credit life insurance premiums received by the Bank.
Pursuant to this policy, the board shall on at least an annual basis:
(a) Formally approve the manner in which this insurance income is
to be distributed, the amount of such payments, and the recipients;
(b) Require at least annual reporting and documentation in the board
minutes of the dollar amount disbursed to each recipient during the
previous calendar year;
(c) Disclose the conduct of such activities to the bonding
company and obtain an acknowledgement that these activities do not
impair coverage under fidelity bond; and
(d) Formally approve expenses incurred by the Bank in connection with
insurance activities and assure that the Bank is adequately compensated
for any expenses it incurs in furnishing personnel, equipment,
facilities and supplies for conducting this activity.
[.16] 13. While this ORDER is in effect, the Bank shall not declare or pay
any cash dividends on its capital stock without the prior written
approval of the Regional Director and the Commissioner.
[.17] 14. (a) Within 30 days from the effective date of this ORDER, the
Bank shall review all Consolidated Reports of Condition and Income
filed with the FDIC on and after
{{11-30-01 p.C-5202}}
December 31, 2000, and shall amend and
file with the FDIC amended Consolidated Reports of Condition and Income
which accurately reflect the financial condition of the Bank as of the
date of each such Report.
(b) In addition to the above and during the life of this ORDER,
the Bank shall file with the FDIC Consolidated Reports of Condition and
Income which accurately reflect the financial condition of the Bank as
of the reporting period. In particular such Reports shall include any
adjustment in the Bank's books made necessary or appropriate as a
consequence of any State or FDIC examination of the Bank during that
reporting period.
[.18] 15. Within 90 days of the effective date of this ORDER, the Bank shall
sufficiently reduce or otherwise improve assets subject to Special
Mention as of December 31, 2000 to warrant removal from the Special
Mention category.
16. On the fifteenth day of the second month following the effective
date of this ORDER, and on the fifteenth day of every third month
thereafter, the Bank shall furnish written progress reports to the
Regional Director and the Commissioner detailing the form and manner of
any actions taken to secure compliance with this ORDER and the results
thereof. Such reports may be discontinued when the corrections required
by this ORDER have been accomplished and the Regional Director and the
Commissioner have released the Bank in writing from making further
reports.
17. This ORDER shall become effective ten days from the date of its
issuance.
18. The provisions of this ORDER shall remain effective and enforceable
except to the extent that, and until such time as, any provisions of
this ORDER shall have been modified, terminated, suspended, or set
aside by the FDIC.
Pursuant to delegated authority.
Dated: September 28, 2001.
