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{{4-1-90 p.TC-44}}
   [15,156] Docket No. FDIC-89-93b (8-28-90)

In the Matter of

BANK OF ELBOW LAKE
ELBOW LAKE, MINNESOTA
(Insured State Nonmember Bank)
MODIFICATION OF
ORDER TO CEASE
AND DESIST

FDIC-89-93b

   The ORDER TO CEASE AND DESIST ("ORDER") issued by the Federal Deposit Insurance Corporation ("FDIC") to Bank of Elbow Lake, Elbow Lake, Minnesota ("Bank"), on September 15, 1989, is modified as follows:
   1. Paragraph 3(a) of the ORDER is modified by deleting the word "more" and inserting in lieu thereof the word "later," by deleting the words "120 days from the effective date of this ORDER, or within the corrective period prescribed by the Order of Correction, whichever is earlier," and inserting in lieu thereof the words "June 1, 1990," and by deleting the amount of "$900,000" and inserting in lieu thereof the amount of "$500,000," so that paragraph 3(a), as modified, reads as follows:

       3. (a) No later that June 1, 1990, the Bank shall increase its equity capital by not less than $500,000. Such increase in capital may be accomplished by: ...
   2. Paragraph 3(d)(i) of the ORDER is modified by deleting the word "more" and inserting in lieu thereof the word "later," by deleting the words "120 days from the effective date of this ORDER, or within the corrective period prescribed by the Order of Corrective, whichever is earlier," and inserting in lieu thereof the words "December 31, 1991," so that paragraph 3(d)(i), as modified, reads as follows:
       3. (d) (i) No later than December 31, 1991, the Bank shall have equity capital exclusive of the allowance for loan and lease losses, at or in excess of 6 percent of the Bank's average total assets ("equity capital ratio") and shall continue to maintain its equity capital ratio at or in excess of such level as calculated herein while this ORDER is in effect.
   3. Paragraph 3(e) of the ORDER is modified by inserting after the word "If" the words "after December 31, 1991, but," by being renumbered to be known as paragraph 3(e)(ii), and by adding and incorporating a new subparagraph to be known as paragraph 3(e)(i), so that paragraph 3(e) as modified reads as follows:
       3. (e) (i) No later than September 30, 1990, the Bank's board of directors shall submit a written plan to the Regional Director for increasing the equity capital ratio, exclusive of the allowance for loan and lease losses, up to or in excess of 6 percent by December 31, 1991. Upon approval by the Regional Director, the Bank shall immediately implement the plan.
    (ii) If, after December 31, 1991, but during the period this ORDER is in effect, the equity capital ratio, exclusive of the allowance for loan and lease losses, declines below 6 percent, the Bank, within 30 days after the date on which the said ratio so declined, shall develop and implement a written plan to increase such ratio up to or in excess of 6 percent. No more than 60 days after the implementation of the written plan, the Bank's equity capital ratio, exclusive of the allowance for loan and lease losses, shall equal or exceed 6 percent and the Bank shall thereafter continue to maintain its equity capital ratio at or in excess of such level as calculated herein while this ORDER is in effect.
   4. A new paragraph added and incorporated into the ORDER, to be known as paragraph 3(h), reads as follows:
       3. (h) Nothing in this ORDER shall operate to subject any individual director of the Bank to a Federal District Court order of enforcement pursuant to section 8(i)(1) of the Act, 12 U.S.C. § 1818(i)(1), or imposition of civil money penalties pursuant to section 8(i)(2) of the Act, 12 U.S.C. § 1818(i)(2), for failure to utilize such director's personal assets to satisfy the capital requirements of paragraphs 3(a) through 3(e) of this ORDER prior to {{4-1-90 p.TC-45}}January 1, 1992; provided, however, that the sale of new offerings of common stock or perpetual preferred stock pursuant to paragraph 3(a)(i) of this ORDER shall not be considered to be a utilization of such director's personal assets, even if such sale may result in the diminution of value of stock held by any director.
   The provisions of the ORDER continue to be, and this MODIFICATION OF ORDER TO CEASE AND DESIST ("MODIFICATION") is, binding upon the Bank, its Institution-Affiliated Parties, its successors and assigns, and other persons participating in the conduct of the affairs of the Bank.
   The provisions of the ORDER, as modified by this MODIFICATION, shall remain effective and enforceable except to the extent that, and until such time as, any provisions of the ORDER, as modified by this MODIFICATION, shall have been modified, terminated, suspended or set aside by the FDIC.
   Pursuant to delegated authority.
   Dated this 28th day of August, 1990.

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