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[¶16,350] Docket No. FDIC-00-097b (8-19-03).
In the Matter of
BANK OF CALHOUN COUNTY
HARDIN, ILLINOIS
(Insured State Nonmember Bank)
AMENDED ORDER TO CEASE AND DESIST
No. 2000-BBTC-11-b
FDIC-00-097b
On November 16, 2000, the Federal Deposit Insurance Corporation
("FDIC") and the Office of Banks and Real Estate for the State of
Illinois ("OBRE") issued an ORDER TO CEASE AND DESIST against
Bank of Calhoun County, Hardin, Illinois ("Bank"), that became
effective on November 26, 2000 ("2000 ORDER"), and remains in
full force and effect. Further, on November 27, 2002, the FDIC and OBRE
issued against the Bank a MODIFICATION OF ORDER TO CEASE AND DESIST
("MODIFICATION ORDER"), which modification was limited to a
revision of paragraph 6(a) of the 2000 ORDER.
Subsequent to the issuance of the 2000 ORDER and the MODIFICATION
ORDER, specifically, as of February 18, 2003, the FDIC and OBRE
conducted an examination of the Bank which showed that the condition of
the Bank had deteriorated since the issuance and modification of the
2000 ORDER. Thus, to more adequately address the Bank's condition, the
FDIC and OBRE determined to amend certain provisions of the 2000 ORDER
and the MODIFICATION ORDER.
On July 10, 2003, the Bank, through its board of directors, entered
into a STIPULATION AND CONSENT TO THE ISSUANCE OF AN AMENDED ORDER TO
CEASE AND DESIST ("CONSENT AGREEMENT") wherein the Bank consented
to the issuance of an AMENDED ORDER TO CEASE AND DESIST ("AMENDED
ORDER").
The FDIC and OBRE considered the matter and determined that there was
reason to believe that sufficient cause existed to amend the 2000 ORDER
and the MODIFICATION ORDER to more adequately address the condition of
the Bank. The FDIC and OBRE, therefore, accepted the CONSENT AGREEMENT
and issued the following:
AMENDED ORDER TO CEASE AND DESIST
A. The 2000 ORDER is amended so that the phrase "as of April
25, 2000" in paragraphs 1(c)(ii), 14(b), and 15(b)(iii) is deleted
and replaced with the phrase "as of February 18, 2003, and as of the
date of any subsequent examination of the Bank conducted by the FDIC or
OBRE."
B. Paragraph 3(b) of the 2000 ORDER is amended by designating present
paragraph 3(b) as 3(c), and inserting the following paragraph 3(b):
3. * * *
(b)(i) On or before August 29, 2003, the Bank shall prepare and
submit to the Regional Director and Commissioner for review and comment
a report listing all Bank employees who have lending authority. In
addition to providing the employee's name and title, the report shall
detail the employee's secured and unsecured lending limits, and shall
provide any other information relevant to his or her lending authority.
(ii) Subsequent to the initial submission required by this paragraph,
and so long as this ORDER remains in effect, the Bank shall provide the
Regional Director and Commissioner with a revised report whenever an
employee's secured or unsecured lending limit increases, decreases, or
is eliminated; whenever another employee is given lending authority,
regardless of the type of lending authorized or the limitations
thereon; and whenever there is a change in any other information
relevant to an employee's lending authority. The revised report shall
be submitted to the Regional Director and Commissioner within 10 days
of any change in the immediately preceding report.
(iii) Within 30 days from the receipt of any comments from the Regional
Director and Commissioner, and after the adoption of any recommended
changes, the board of directors shall approve the employees' lending
authority as set out in the report and in any subsequent modifications
thereto, which approval shall be recorded in the minutes of the board
of directors' meeting. Thereafter, the Bank shall
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operate its lending function in conformance with the lending authority report.
* * *
C. The 2000 ORDER is amended so that paragraph 7 is deleted and
replaced with the following paragraph 7:
7. As of the effective date of this ORDER, and within 10 days
from the date the Bank is provided with any Reports of Examination
subsequent to the effective date of this ORDER, the Bank shall
eliminate from its books, by charge-off or collection, all assets or
portions of assets classified "Loss" as of April 25, 2000, and at
any subsequent examination of the Bank conducted by the FDIC or OBRE,
that have not been previously collected or charged off. Any such
charged-off asset shall not be rebooked without prior written
notification to the Regional Director and Commissioner. Elimination or
reduction of these assets with the proceeds of other Bank extensions of
credit is not considered collection for the purpose of this paragraph.
D. The 2000 ORDER is amended so that paragraph 9(a) is deleted and
replaced with the following paragraph 9(a):
9. (a) Within 60 days from the effective date of this ORDER, and
within 10 days from the date the Bank is provided with any Reports of
Examination subsequent to the effective date of this ORDER, the Bank
shall formulate and submit to the Regional Director and Commissioner
for review and comment, a written plan to reduce the Bank's risk
position in each asset in excess of $50,000 which is classified
"Substandard" in the FDIC and OBRE Reports of Examination as of
April 25, 2000, and in any subsequent Report of Examination of the Bank
prepared by the FDIC or OBRE. In developing such plan, the Bank shall,
at a minimum:
(i) Review the financial position of each such borrower,
including source of repayment, repayment ability, and alternative
repayment sources; and
(ii) Evaluate the available collateral for each such credit, including
possible actions to improve the Bank's collateral position.
E. The 2000 ORDER is amended so that the introductory paragraph of
paragraph 12 and paragraph 12(a) are deleted and replaced with the
following introductory paragraph 12 and paragraph 12(a):
12. Within 90 days from the effective date of this ORDER, and
within 10 days from the date the Bank is provided with any Reports of
Examination subsequent to the effective date of this ORDER, the Bank
shall formulate and submit to the Regional Director and Commissioner
for review and comment a written plan to reduce the loan
concentration(s) of credit identified in the FDIC and OBRE Reports of
Examination as of April 25, 2000, and in any subsequent Reports of
Examination of the Bank prepared by the FDIC or OBRE, to not more than
25 percent of the Bank's total Tier 1 capital. Such plan shall
prohibit any additional advances that would increase the concentration
or create new concentrations and shall include, but not be limited to:
(a) Dollar levels to which the Bank shall reduce each concentration
within 6 and 12 months following the required date of submission of
each written plan required by this paragraph;
* * *
F. The 2000 ORDER is amended so that paragraph 18 is deleted and
replaced with the following paragraph 18:
18. Within 90 days from the effective date of this ORDER, and
within 10 days from the date the Bank is provided with any Reports of
Examination subsequent to the effective date of this ORDER, the Bank
shall correct the deficiencies in internal routines and controls which
are listed in the FDIC and OBRE Reports of Examination as of April 25,
2000, and in any subsequent Reports of Examination prepared by the FDIC
or OBRE. Additionally, policies and procedures shall be established to
prevent the recurrence of any deficiency so noted.
G. Paragraph 6(a) of the MODIFICATION ORDER is eliminated and the
language of paragraph 6(a) contained in the 2000 ORDER is restored, as
shown below:
6. (a) As of 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 is already obligated in any manner to the
Bank on any extensions of credit (including any portion thereof) that
has been charged off or classified "Loss" so long as such credit
remains uncollected.
* * *
The provisions of this AMENDED ORDER
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shall be binding upon the Bank, its institution-affiliated parties, and its successors and
assigns.
Except as amended herein, the provisions of the 2000 ORDER shall remain
in full force and effect.
The provisions of this AMENDED ORDER shall remain effective and
enforceable except to the extent that, and until such time as, any
provisions shall have been modified, amended further, terminated,
suspended or set aside by the FDIC and OBRE.
Pursuant to delegated authority.
Dated this 19th day of August, 2003.
