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{{1-31-92 p.TC-101}}
   [15,360] Docket No. FDIC-89-34b (11-8-91)

In the Matter of

CHICKASHA BANK & TRUST
COMPANY

CHICKASHA, OKLAHOMA
(Insured State Nonmember Bank)
MODIFICATION OF ORDER
TO CEASE AND DESIST

   On May 25, 1989, the Federal Deposit Insurance Corporation ("FDIC") issued an ORDER TO CEASE AND DESIST ("ORDER") to Chickasha Bank & Trust Company, Chickasha, Oklahoma ("Bank") that became effective on June 4, 1989 and remains in full force and effect. The Bank, through its board of directors, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A MODIFICATION OF ORDER TO CEASE AND DESIST ("CONSENT AGREEMENT") with counsel for the {{1-31-92 p.TC-102}} FDIC dated November 8, 1991, whereby, solely for the purpose of this proceeding and without admitting or denying any charges of unsafe or unsound banking practices and/or violations of law and/or regulations, the Bank consented to the issuance of a MODIFICATION OF ORDER TO CEASE AND DESIST ("MODIFICATION") by the FDIC. In consideration of the foregoing, the FDIC accepted the CONSENT AGREEMENT and issued the following:

MODIFICATION OF ORDER TO CEASE
AND DESIST

   1. Paragraph 1(a), (b), (c), (d), (e), paragraph 2, paragraph 3(a), (b), (c), (d), (e), (f) and paragraph 5(a), (b), of the ORDER are hereby deleted from the same.
   2. The following paragraphs 1(a), (b), (c), (d) and paragraph 2(a), (b), (c), (d), (e), (f), (g) are hereby substituted and incorporated into the ORDER as set forth as follows:

       1. (a) As provided for in the Settlement Agreement dated September 5, 1991, between the Bank's board of directors and the FDIC, the Bank shall increase its Tier 1 capital by no less than $1,001,000.
       (b) The Bank shall achieve and thereafter maintain the following adjusted Tier 1 capital ratios:
         3.9% by December 31, 1991
         4.5% by December 31, 1992
         5.3% by December 31, 1993
    If such ratio is less than the amount required above as determined at an examination or visitation by the FDIC or the State Banking Commissioner, the Bank shall, within 30 days from receipt of a written notice of the capital deficiency from the Regional Director or the Commissioner present to the Regional Director and the Commissioner a plan to increase the Tier 1 capital of the Bank or to take other measures to bring the ratio into compliance. Within 60 days after the plan is reviewed and no exception is taken by the Regional Director and the Commissioner, the Bank shall increase or cause by some other method the Bank's Tier 1 capital to be in compliance with the above ratios.
       (c) For the purposes of this ORDER, the terms "allowance for loan and lease losses," "Tier 1 capital," and "total assets" shall have the meanings ascribed to them in Part 325 of the FDIC's Rules and Regulations, respectively subsections 325.2(a), (m), and (n), 12 C.F.R. 325.2(a), (m), and (n). "Adjusted Tier 1 capital" and "adjusted total assets" shall be calculated according to the methodology set forth in the Analysis of Capital section in a report of examination or visitation of the FDIC.
       (d) While this ORDER is in effect, the Bank shall neither declare nor pay, directly or indirectly, any cash dividend to shareholders without the prior written consent of the Regional Director and the Commissioner.
    2. (a) Upon the effective date of this ORDER, the Bank shall, to the extent that it has not previously done so, eliminate from its books, by charge-off or collection, all assets or portions of assets classified Loss and one-half of the assets classified Doubtful by the FDIC as a result of its examination of the Bank as of October 12, 1990. Reduction of these assets through proceeds of loans made by the Bank shall not be considered "collection" for the purpose of this paragraph.
       (b) Within 60 days after the effective date of this ORDER, the Bank shall submit a written plan to the Regional Director and the Commissioner to reduce the remaining assets classified Doubtful and Substandard as of October 12, 1990. At a minimum, the plan shall include the following:
         (i) A schedule providing quarterly goals to reduce the remaining adversely classified assets as of October 12, 1990 to levels representing not more than a specified percentage of total equity capital and reserves as reported each quarter by the Bank in its Consolidated Reports of Condition and Reports of Income and shall include no less than six consecutive quarterly target dates;
         (ii) An explanation showing the complete rationale used by the Bank in constructing the reduction schedule; and,
         (iii) A provision requiring, at a minimum, quarterly reviews by the Bank's board of directors whereby the extent of the Bank's compliance with the plan is expressly addressed, with the results of each review to be recorded in the corporate minutes of the board of directors.
       (c) Upon written notice from the Regional Director or the Commissioner that {{1-31-92 p.TC-103}} the submitted plan is not acceptable, the Bank shall, within 30 days after receipt of such notice, submit amendments to the plan to the Regional Director and the Commissioner, including any modification or amendments requested by the Regional Director or Commissioner. Upon written notice that the plan is accepted, it shall be adopted by the board of directors of the Bank. The Bank shall then immediately initiate measures detailed in the plan to the extent such measures have not been initiated.
       (d) For purposes of the plan, the reduction of the level of adversely classified assets as of October 12, 1990, to a specified percentage of total equity capital and reserves may be accomplished by:
         (i) charge-off;
         (ii) collection;
         (iii) sufficient improvement in the quality of adversely classified assets so as to warrant removing any adverse classification, as determined by the FDIC; or
         (iv) increase of total equity capital and reserves.
       (e) While this ORDER is in effect, the Bank shall eliminate from its books, by charge-off or collection, all assets or portions of assets classified Loss as determined at any examination or visitation conducted by the FDIC or the State at such time as the report of examination or visitation is received by the Bank.
       (f) While this ORDER is in effect, the Bank shall not extend, directly or indirectly, any additional credit to or for the benefit of any borrower who has an extension of credit with the Bank that has been classified Loss, either in whole or in part, and is uncollected, or to any borrower who is already obligated in any manner to the Bank on any extension of credit, including any portion thereof, that has been charged off the books of the Bank and remains uncollected. The requirements of this paragraph shall not prohibit the Bank from renewing credit already extended to a borrower after full collection, in cash, of interest due from the borrower.
       (g) While this ORDER is in effect, the Bank shall not extend, directly or indirectly, any additional credit to or for the benefit of any borrower whose extension of credit is classified Doubtful and/or Substandard, either in whole or in part, and is uncollected, unless the Bank's board of directors has signed a detailed written statement giving reasons why failure to extend such credit would be detrimental to the best interests of the Bank. The statement shall be placed in the appropriate loan file and included in the minutes of the applicable board of directors' meeting.
   3. The provisions of this MODIFICATION shall be binding upon the Bank and all institution-affiliated parties of the Bank.
   4. Except as specifically modified herein, all of the terms and conditions of the ORDER heretofore issued to the Bank shall remain in full force and effect.
   5. The effective date of this MODIFICATION, and the provisions contained herein, shall be the date of issuance by the Regional Director, FDIC, Dallas Region.
   6. The provisions of this MODIFICATION shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this MODIFICATION shall have been modified, terminated, suspended, or set aside by the FDIC.
   Dated at Dallas, Texas, this 8th day of November, 1991.
   Pursuant to delegated authority.

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