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FDIC Enforcement Decisions and Orders

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   [15,370] Docket No. FDIC-87-226b (11-27-91)

In the Matter of

FIRST COLONY BANK
THE COLONY, TEXAS
(Insured State Nonmember Bank)
MODIFICATION OF ORDER
TO CEASE AND DESIST

   On November 10, 1987, the Federal Deposit Insurance Corporation ("FDIC") issued an ORDER TO CEASE AND DESIST ("ORDER") to First Colony Bank, The Colony, Texas ("Bank"), that became effective on November 20, 1987 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 FDIC dated October 15, 1991, whereby, solely for the purpose of this proceeding and without admitting or denying any charges of unsafe or unsound banking practices and 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) and paragraph 2 of the ORDER are hereby deleted from the same.
   2. The following paragraph 1(a), (b), (c), (d) and paragraph 2(a), (b) are hereby substituted and incorporated into the ORDER as set forth as follows:

    1. (a) For so long as this Order remains in effect, the Bank shall maintain adjusted Tier 1 capital equal to or greater than 6.0 percent of adjusted total assets.
       (b) If the ratio of adjusted Tier 1 capital to adjusted total assets is less than 6.0 percent as determined at an examination or visitation by the FDIC or the State Banking Department, the Bank shall, within 30 days after receipt of 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 Tier 1 capital of the Bank or to take other measures to bring the ratio to 6.0 percent. Within 60 days of this response, the plan, including any modifications or amendments requested by the Regional Director and the Commissioner, shall be adopted by the board of directors of the Bank. The Bank shall thereafter immediately initiate measures detailed in the plan, to the extent such measures have not previously been initiated, to increase its Tier 1 capital by an amount sufficient to bring the ratio to 6.0 percent.
       (c) In complying with the provisions of this Order and until such time as any such public offering is terminated, 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 change which is materially different from the information reflected in any offering materials used in connection with the sale of the Bank's securities. The written notice required by this paragraph shall be furnished within 10 days after the date such material development or change was planned or occurred, whichever is earlier, and shall be furnished to every purchaser and/or subscriber who received or was tendered the information contained in the Bank's original offering materials.
       (d) 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.
    2. (a) While this Order is in effect, the Bank shall not declare or pay, either directly or indirectly, any cash dividend on common stock without the prior written consent of the Regional Director and the Commissioner.
       (b) While this Order is in effect, the Bank shall not declare or pay, either directly or indirectly, any cash dividend on preferred stock without the prior written consent of the Regional Director and the Commissioner if:
         (i) the dividend exceeds bank earnings or;
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         (ii) if after payment, the ratio of adjusted Tier 1 capital to adjusted total assets would be less than 6.0%.
       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 the MODIFICATION shall remain effective and enforceable except to the extent that, and until such time as, any provisions of said MODIFICATION shall have been modified, terminated, suspended, or set aside by the FDIC.
   Dated at Dallas, Texas, this 27th day of November, 1991.
   Pursuant to delegated authority.

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