Federal Deposit
Insurance Corporation

{{4-1-90 p.A-438}}
   [¶5045] FDIC Docket No. FDIC-84-137(c) and (b) (5-6-85).

   FDIC ordered a bank to cease and desist from initiating or conducting any business on the instruction or advice of the bank's former chairman of the board. The bank had issued common stock certificates and increased its equity capital accounts based solely on the receipt of a cashier's check without collecting the funds in payment of the cashier's check, which had been drawn by the former board chairman. FDIC also ordered the bank to cease and desist from carrying account balances on its books which are not accurate, and from making preferential loans and loans which present a greater than normal risk of recovery.
   [.1] Cease and Desist Orders—Notice of Charges—Failure to Answer
   Unless a party served with notice appears at a hearing, the party is deemed to have consented to the issuance of a cease and desist order.

   [.2] Cease and Desist Orders—Unsafe or Unsound Practices
   Unsafe or unsound banking practices include issuing stock in return for unreceived funds; carrying account balances on a bank's books which are not accurate; and making preferential loans or loans that present a greater than normal risk of recovery.

In the Matter of * * * BANK and
* * * , FORMER CHAIRMAN OF THE
BOARD OF DIRECTORS, * * * BANK
(INSURED STATE NONMEMBER
BANK)




DECISION AND ORDER TO CEASE
AND DESIST
FDIC-84-137(c) and (b)

STATEMENT OF THE CASE

   On August 13, 1984, the Federal Deposit Insurance Corporation ("FDIC") simultaneously issued a Notice of Charges and of Hearing ("Notice") and a Temporary Order to Cease and Desist pursuant to Sections 8(b)(1) and 8(c) of the Federal Deposit Insurance Act (12 U.S.C. 1818(b)(1) and (c)). The Notice charged that: (a) the * * * Bank * * * ("Bank"), had issued common stock certificates and increased its equity capital accounts based solely on the receipt of a cashier's check without collecting the funds in payment of the cashier's check, which had been drawn by * * *, the Bank's former chairman of the board of directors * * *; and (b) the Bank had made to * * * and his wife a loan that was not fully collateralized, that had a greater than normal degree of risk of repayment, and that exceeded the Bank's lending limit and was preferential in violation of Regulation O of the Board of Governors of the Federal Reserve System. Such actions, it was charged, constituted unsafe or unsound banking practices and violations of laws and regulations in conducting the business of the Bank. Thirteen days before the date set for the hearing, the Bank withdrew its opposition to the entry of an appropriate cease and desist order and indicated its willingness to have the proceeding continue on an uncontested basis. Subsequently, the hearing was cancelled, the FDIC was invited to submit a proposed order, and the Bank was invited to submit responsive comments regarding the order.
   Administrative Law Judge Peter C. Edison on January 31, 1985, issued an advisory opinion recommending that the Bank cease and desist from further violations of the Federal Reserve Act, the Federal Deposit Insurance Act, the Rules and Regulations of the Federal Deposit Insurance Corporation, and from further transactions between itself and * * * or his associates that exceed the normal risk in transactions conducted by and between a shareholder and a bank. He further recommended that the Bank be affirmatively charged with formulating written policies and standards satisfactory to the FDIC to prevent a recurrence of the violations.

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   [.1] The language of § 8(b)(1) of the Federal Deposit Insurance Act states, in pertinent part that:

   Unless the party or parties so served shall appear at the hearing personally or by a duly authorized representative, they shall be deemed to have consented to the issuance of the cease-and-desist order. In the event of such consent,... the agency may issue and serve upon the bank...an order to cease and desist from any such violation or practice.

FINDINGS OF FACT

   The Board adopts Judge Edison's recommended Findings of Fact and incorporates them herein by reference.

CONCLUSIONS OF LAW

   The Board adopts Judge Edison's recommended Conclusions of Law and incorporates them herein by reference.

ORDER TO CEASE AND DESIST

   Having found and concluded that the Bank is engaging or has engaged in unsafe or unsound practices in conducting the business of the Bank and has violated Section 22(h) of the Federal Reserve Act, Section 8(b) of the Federal Deposit Insurance Act, and Section 215.4 of Regulation O of the Board of Governors of the Federal Reserve System:
   IT IS ORDERED, that the Bank, its directors, officers, employees, agents, successors, assigns, and other persons participating in the conduct of the affairs of the Bank, cease and desist from:
   1. Initiating or conducting any business or transaction on the instruction or advice of * * * or any business transactions between the Bank and Mr. * * * or any related interest or person or party associated with him.
   2. Any business transaction which would, directly or indirectly, serve to benefit * * * or any related interest or person associated with him.

   [.2] 3. Engaging in unsafe and unsound banking practices including, but not limited to, issuing stock in return for unreceived funds, carrying account balances on its books which are not accurate, and making preferential loans and/or loans which present a greater than normal risk of recovery.
   IT IS FURTHER ORDERED, that the Bank, its directors, officers, employees, agents, successors, assigns, or other persons participating in the conduct of its affairs, take affirmative action as follows:
   1. The Bank's board of directors shall take all steps necessary to ensure that no person or group undermines or otherwise interferes with its authority in the management of the Bank.
   2. The Bank shall not permit * * *, directly or indirectly, in an individual or representative capacity, to engage in or authorize any transaction on behalf of the Bank.
   3. The Bank shall submit to the FDIC, within 60 days of the effective date of this order, written management policies designed {{4-1-90 p.A-440}}to prevent a recurrence of the transactions giving rise to this proceeding.
   Notwithstanding the provisions of this ORDER, the Bank may accept deposits to * * * account, honor drafts drawn on collected funds for his account, or engage in other transactions which would inure to the benefit of * * * solely in his capacity as a shareholder of the Bank.
   This ORDER shall be binding upon * * * and the Bank, its directors, officers, agents, employees, successors, assigns, and other persons participating in the conduct of its affairs.
   This ORDER shall become effective thirty (30) days after service on the Bank and shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this ORDER shall be modified, terminated, suspended, or set aside by the Board.
   By direction of the Board of Directors.
   Dated at Washington, D.C., this 6th day of May, 1985.
/s/ Hoyle L. Robinson
Executive Secretary
FDIC-84-137(c) and (b)

RECOMMENDED DECISION

   Pursuant to the provisions of Part 308 of the Rules of Practice and Procedure of the Federal Deposit Insurance Corporation (FDIC), the undersigned administrative law judge, issues the following Recommended Decision in this case.

PROCEDURAL BACKGROUND

   On August 13, 1984, the FDIC simultaneously issued a NOTICE OF CHARGES AND OF HEARING (Ex. 1) and a TEMPORARY ORDER TO CEASE AND DESIST PURSUANT TO SECTION 8(c)(1) OF THE FEDERAL DEPOSIT INSURANCE ACT (Ex. 2), essentially alleging that the respondents were engaging in unsafe or unsound practices in violation of laws and regulations, and would continue to do so unless restrained. On September 12, 1984, respondents, through counsel, filed their ANSWER (Ex. 3), essentially admitting the existence of the transactions complained of, but denying the inferences raised by the FDIC documents. By ORDER dated October 16, 1984, each party was directed to submit a Statement of Position and to outline its hearing case by November 2, 1984 (Ex. 4). A NOTICE OF HEARING issued the same day set the hearing for November 13, 1984, in * * * (Ex. 5). On October 31, 1984, FDIC submitted its TRIAL MEMO RANDUM (Ex. 6). Counsel for respondents indicated in a letter dated November 1 1984, that respondents were withdrawing their opposition to the entry of an appropriate cease and desist order, and indicating their willingness to have the proceeding continue on an uncontested basis (Ex. 9). Subsequently the hearing was cancelled, the FDIC was invited to submit a proposed order, and respondents were invited to comment (Ex. 10). The FDIC's proposal is contained as Ex. 11 in the record, and respondent's reply is Ex. 12. In view of the foregoing, and in keeping with the Rules and Regulations of the FDIC, this case now stands ready for decision.

EVALUATION OF THE EVIDENCE

   The FDIC has alleged that respondent bank, * * * Bank * * * and * * * Chairman of the Board of Directors, have engaged in unsafe or unsound practices which violate the law and the regulations of the FDIC, and which need to be restrained. In support for this general charge, the FDIC specifically cites several transactions. It is charged that on June 29, 1984, a worthless check was used to provide additional capital to the bank, and on the same day additional stock was issued to reflect the receipt of this check. The bank increased the amount of assets on its books to reflect the receipt of this check. Specifically the FDIC charges that on June 29, 1984, Chairman * * * remitted a check in the amount of $750,000. to the Bank. That check was a Cashier's Check drawn on the * * * and was dated April 18, 1984. The FDIC further alleges that funds in payment of the check were never received, but nevertheless the Bank continues to carry the $750,000. on its books as an asset. In return for the receipt of this Cashier's Check, the Bank issued to * * * common stock certificates, and also increased its equity capital accounts on its books by $750,000. based solely on the receipt of this allegedly worthless asset (Ex. 1). In its Answer (Ex. 3) respondents admit that this check was utilized on June 29, 1984, to provide additional capital to the bank, that * * * was the remitter, and that funds in payment of the check have not been received. It further admits that stock was issued to * * * in return for the $750,000. "received" by the {{4-1-90 p.A-441}}Bank. The answer further indicates that on September 6, 1984, the Bank received $750,000. in full payment for the stock issued on June 29, 1984.
   The FDIC further alleges that the bank is engaging in unsafe or unsound banking practices by awarding preferential loans. It specifically cites a loan of $204,332. from the Bank to * * * and his wife on July 17, 1984. The proceeds were apparently deposited in the account of * * * to cover a bad check in the amount of $199,000. payable to * * * (Purportedly, both * * * and * * * are interests of the * * *). The collateral for the loan was a second mortgage on the * * * residence which the FDIC viewed to be deficient in view of the market value of the residence and the amount of the first mortgage outstanding. These allegations are contained at page 3-4 of FDIC's Notice (Ex. 1). Respondent admits the fact and amount of the loan (Answer, Ex. 3) but indicates that on September 4 and 10, 1984, the bank received substitute collateral with a fair market value of $405,000. The FDIC had alleged that the loan to * * * posed a greater than ordinary risk of loss to the Bank in violation of Section 215.4(a) of Regulation O, and considered with other loans to * * * and his interests, exceeded the Bank's lending limit as a proportion of its equity capital account, in violation of Section 215.4(c) of Regulation O (Ex. 1).
   In its Trial Memorandum (Ex. 6) the FDIC reiterates the essential facts about these transactions, argues their violative nature, and asks for a permanent order barring * * * from doing business with the bank, and the bank from doing business with * * * or any of his associates. In its response to the FDIC's proposed Order, the Bank argues essentially that no action is necessary since * * * resigned as Chairman of the Bank on September 10, 1984. The Bank further argues that * * * is responsible for an infusion of $805,000. to the bank's capital, that the Bank has benefited from the association, and that to prohibit further transactions between * * * and the Bank, other than the normal shareholder transactions, would be both unwise and discriminatory (Ex. 12). Reading between the lines, the respondents argue that the transactions have been rectified, * * * has resigned, and the whole thing should be regarded as moot.
   I could not be in stronger disagreement. Strong regulatory action is not only appropriate but mandated after carefully considering all the aspects of this case. While these two transactions may not have caused any loss at least yet, they are indicative of a banking mentality that is simply unacceptable, and cannot be condoned. They evidence a complete disregard of the statutory policy passed by Congress, the regulations of the FDIC—the public policy of the United States. While these transactions are the basis for the Notice of Charges brought by the FDIC, the issues and the appropriateness of sanctions and relief must consider not only these specific transactions, but also consider them as part of a context of practices. Certainly, the view is disturbing at best.
   As part of its Trial Memorandum, the FDIC submitted for the record two revealing documents. The first is an Offsite Review/Visitation Report (Ex. 7) dated June 29, 1984. Among the comments made by the Examiner are that the condition of the bank continues to be poor, despite "an apparent capital injection." "The bank has not fulfilled most of the provisions of the various regulatory orders outstanding. There has been no real change in the volume of adversely classified assets discovered at the 1-20-84 Corporation examination; indeed, there has been marked deterioration in several lines since then, both adversely classified lines and others." (Ex. 7 at p.1.) The report noted that its reserves were "woefully inadequate", and despite a "miserable liquidity problem, the volume of loans continues to increase, funded by ever larger amounts of jumbo certificates." The report then goes on to specifically discuss the requirements of an FDIC Order of Correction dated March 26, 1984, and the bank's compliance or progress. In the Summary, the report concludes: "The most critical failure, liquidity and reliance on brokered deposits, shows a deteriorating position." (Ex. 7, at p. 2). Elsewhere, the report indicates that brokered deposits equal 16% of total deposits. A full scale examination was conducted on July 20, 1984, and a copy of that report, Report of Examination, appears as Ex. 8 in the record. That report indicates that the Bank had not complied with the FDIC's March 26, 1984, Order regarding the reports on the quality of the brokered depo-
{{4-1-90 p.A-442}}sits, and noted that the bank recently had increased its volume of brokered deposits primarily to fund new out-of-territory loans. The bank had failed to develop a plan to reduce brokered deposits to less than five percent of total deposits, and the report indicated that the amount of brokered deposits had soared from $1,646,000 during the March examination to $2,800,000. (Ex. 6B at 1).
   The report then goes on to discuss the bank's compliance with an earlier cease and desist order issued on July 27, 1983. The earlier order, which the bank had also agreed to, required it to increase its capital, change its management, tighten its loan policies, and write down doubtful loans. Its progress was spotty at best.
   Therefore, evaluating the two specific transactions in this context, they must be viewed far more seriously than the simple facts alone might indicate. These transactions are not only violations of the law and the FDIC regulations, they are the latest expressions of a banking mentality which cannot be condoned, and which warrants strong regulatory correction. Issuance of $750,000 of stock to respondent * * * in return for the receipt of an unverified foreign bank check was clearly in violation of sections 8(b) and (c) of the Federal Deposit Insurance Act. It is, on its face, an unsound banking practice and also an unsafe banking practice. Even though the check was ostensibly drawn on April 18, 1984, on the * * *, it was not remitted by respondent * * * until June 29, 1984. It apparently was not submitted for collection by the Bank, but on the very same day the Bank issued * * * stock in the same amount as the check, $750,000. Since that very day was the day that the FDIC examiner conducted his review (Ex. 7), it seems only reasonable to infer some connection between the two events. Respondent Bank of course increased its capital balance to reflect its "receipt" of the $750,000. This was clearly an unsound banking practice, and unsafe banking practice and possibly even a fraudulent banking practice. Respondent's Answer that $750,000 was received on September 6, 1984, in full payment for the purchase of the stock certainly does not cleanse or moot the transaction, or lessen the need for a regulatory response. There has been no explanation of why this transaction occurred in the first place.
   The respondent Bank's loan of $204,332 to Chairman * * * and his wife on July 17, 1984, must also be carefully scrutinized. Respondent has admitted the fact and amount of loan, and the fact that there was insufficient collateral for the loan when it was granted. It seeks to mitigate the impact of this by stating that sufficient collateral, in the form of deed of trust on property was given on September 4 and September 10, 1984, in lieu of the former collateral. The FDIC had alleged that the original proceeds of the loan were deposited in the account of one corporation to cover a bad check written by that corporation to another corporation. This essentially was not denied by respondents. Respondent however infers that no action need be taken now since sufficient collateral has been received by the Bank to cover the note by * * * and Mrs. * * *. The FDIC's charges that the amount of that loan, in connection with other loans to Chairman * * *, exceeded the statutory limit have not been effectively disputed. There can be no doubt that this loan transaction violated Section 22(h) of the Federal Reserve Act, applicable to respondent Bank because of section 18(j)(2) of the Federal Deposit Insurance Act. It would, on its face, appear to be a textbook example of a prohibited "insider" loan; a loan made by a bank to its Chairman and his wife for the purpose of covering a bad check, supported by insufficient collateral for a period of approximately 60 days between July and September 1984. It is not only a violation of the Federal Reserve Act and the Federal Deposit Insurance Act, but is obviously an unsound or unsafe banking practice prohibited by the provisions of section 8(b) of the Federal Deposit Insurance Act. It is also strong evidence, especially in the context of this case, of a continuing series of banking practices that threaten the continued viability of respondent Bank. The apparent willingness of the respondent Bank's officers and Board members to permit respondent * * * and his associates to use the bank as a personal fiefdom must be deemed as evidence of their ineffectiveness, or even their incompetence.
   In its request for relief, the FDIC wants to have the bank prohibited from further dealings with, or on behalf of Chairman * * * (ex. 1, 6 & 11). Respondent argues in its Responsive Comments (Ex. 12) that Chairman * * * has already resigned, and the bank should not be prohibited from {{4-1-90 p.A-443}}having further dealings with him, so long as they are on a nondiscriminatory basis. The respondents further argue that "the bank has profited handsomely from its relationship with Mr. * * *" and should not be prohibited from continuing to do business with him. In weighing the proper relief that should be granted in this case, and considering the scope of that relief in light of the violations that have occurred, and the context of the respondent bank's history in recent years, the Administrative Law Judge concludes that strong regulatory action is not only justified but mandated. Respondent bank will obviously be ordered to cease and desist from further violations of the Federal Reserve Act, the Federal Deposit Insurance Act and the Regulations of the Federal Deposit Insurance Corporation. It will also be prohibited from further transactions between itself and from Chairman * * * or his associates that exceed the normal transactions conducted by and between a shareholder and a bank. Despite respondent's protestations to the contrary, the bank's officers seem unwilling or unable to treat former Chairman * * * on a nondiscriminatory basis despite their obligation to do so, and therefore all transactions that exceed normal shareholder transactions must be prohibited entirely.
   Counsel has alleged that the respondent bank has "profited handsomely" from its relationship with * * * and should not be prevented from availing itself of his expertise. In view of the transactions that have already taken place, the Administrative Law Judge finds that the obvious perils of such "profit" must be forsaken in the future. In order to protect the depositors of the Bank, the interests of the Federal Deposit Insurance Corporation, and the sanctity of the Regulations of the FDIC and the laws of the United States, respondent Bank will be ordered to cease and desist from further violations of law, and will be specifically barred from doing further business with * * * and his associates that exceed the normal banking transactions which are engaged in by and between a customer and a bank. The Bank will also be affirmatively charged with formulating written policies and standards, satisfactory to the FDIC, which prevent a recurrence of the egregious transactions giving rise to the Notice of Charges in this case. Although outside the scope of this proceeding, the Administrative Law Judge is deeply concerned by the respondent Bank's apparent inability to comply with earlier FDIC orders and recommendations. It appears from the evidence in this record that respondent Bank continues to fail to maintain adequate equity capital and reserves, continues to carry assets on its books at excessive valuations, is accepting a greater amount of brokered loans that sound banking practice would permit, and is troubled with inefficient and inept management. Since these matters were not brought within the scope of proceeding by the FDIC, the Administrative Law Judge will recommend to the FDIC that a formal investigation be instituted into these matters to determine if further action is warranted.

FINDINGS OF FACT AND
CONCLUSIONS OF LAW

   After carefully considering all the evidence in the record, and the positions of the parties in this proceeding, the Administrative Law Judge makes the following Findings of Fact and Conclusions of Law in this proceeding:
   1. The * * *, is a corporation existing and doing business under the laws of the State of * * * and is, and has been, at all times pertinent hereto, an insured State nonmember Bank subject to the Federal Deposit Insurance Act (12. U.S.C. sections 1811-1831(d) and the Rules and Regulations of the FDIC (12 CFR Chapt. III). The FDIC has jurisdiction over the Bank and the subject matter of this proceeding.
   2. At all pertinent times herein, * * * served as a Director of the Bank and Chairman of the Board of its Directors. The FDIC has jurisdiction over * * * concerning transactions conducted while he served as Chairman of the Board of the Bank.
   3. * * * and the Bank engaged in unsafe or unsound banking practices in connection with the Bank's issuance of $750,000 of stock to * * * in exchange for a $750,000 cashier's check on June 29, 1984, when the funds were not received by the Bank.
   4. * * *, acting as Chairman, and the Bank engaged in unsafe or unsound banking practices by directing that the Bank's capital accounts be credited with a deposit of $750,000 when there was no actual infusion {{4-1-90 p.A-444}}of capital to the Bank at the time the credit was made.
   5. * * *, as acting Chairman of the Bank, and the Bank, have engaged in unsafe or unsound banking practices by carrying false account balances on its books and records.
   6. The bank has engaged in unsafe or unsound banking practices by lending $202,332 to * * * and his wife on July 17, 1984, and not requiring sufficient collateral for the loan.
   7. * * *, acting as Chairman of the Bank, engaged in unsafe and unsound banking practices by borrowing $202,322 on July 17, 1984, from the Bank and not providing sufficient collateral for the loan.
   8. The Bank engaged in unsafe or unsound banking practices by making a preferential loan to * * * which, because of a lack of sufficient collateral to cover the loan, presented a greater than normal risk of recovery, and also exceeded the permissible amounts that the Bank could lend to * * * and/or his associates in violation of section 22(h) of the Federal Reserve Act and section 18(j) of the Federal Deposit Insurance Act.
   9. By making this loan to * * *, the Bank violated sections 215.4(a) and 215.4(c) of Regulation O.
   10. By engaging in these transactions, respondent Bank and * * * both together and separately, violated Sections 8(b) and 8(c) of the Federal Deposit Insurance Act (12 U.S.C. section 1818(b) and (c)).
   In view of these Findings of Fact and Conclusions of Law, the Administrative Law Judge recommends that the attached Order to Cease and Desist be issued against the respondent herein. Under all the circumstances of this case, the Administrative Law Judge further recommends that the FDIC undertake a formal investigation into the management and accounting practices at respondent Bank to determine whether further regulatory action is necessary.

   Respectively submitted,

/s/ PETER C. EDISON
Administrative Law Judge
Suite 400, 501 Union Bldg.
Nashville, Tennessee 37219
January 31, 1985

ORDER TO CEASE AND DESIST
FDIC-84-137(c) and (b)

   The Federal Deposit Insurance Corporation ("FDIC") on August 13, 1984, issued to * * * Bank of * * * ("Bank"), and * * *, its Chairman of the Board of Directors ("Chairman * * *") a NOTICE OF CHARGES AND OF HEARING ("NOTICE") under Section 8(b)(1) of the Federal Deposit Insurance Act (12 U.S.C. section 1818(b)(1)). The NOTICE charged the Bank and Chairman * * * with having engaged in unsafe or unsound banking practices and violations of law and regulations.
   The Bank, through its board of directors, Chairman * * * and Counsel for the FDIC thereafter executed a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER TO CEASE AND DESIST ("CONSENT AGREEMENT"), whereby, solely for the purpose of this proceeding and without admitting or denying the allegations in the NOTICE, the Bank and Chairman * * * 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 and Chairman * * * have engaged in unsafe or unsound banking practices and violations of law and regulations and thereupon accepted the executed CONSENT AGREEMENT, and issued the following ORDER:

ORDER TO CEASE AND DESIST

   IT IS HEREBY ORDERED, that the Bank, its directors, officers, employees, agents, successors, assigns, and other persons participating in the conduct of the affairs of the Bank, cease and desist from:
   1. Initiating or conducting any business or transaction on the instruction or advice of * * * or any business transactions between the Bank and Mr. * * * or any related interest or person or party associated with him.
   2. Any business transaction which would, directly or indirectly, serve to benefit * * * or any related interest or person associated with him.
   3. Engaging in unsafe and unsound banking practices including, but not limited to, issuing stock in return for unreceived funds, carrying account balances on its books which are not accurate, and making prefer- {{4-1-90 p.A-445}}ential loans and/or loans which present a greater than normal risk of recovery.
   IT IS FURTHER ORDERED, that the Bank, its directors, officers, employees, agents, successors, assigns, or other persons participating in the conduct of its affairs, take affirmative action as follows:
   1. The Bank's board of directors shall take all steps necessary to ensure that no person or group undermines or otherwise interferes with its authority in the management of the Bank.
   2. The Bank shall not permit * * *, directly or indirectly, in an individual or representative capacity, to engage in or authorize any transaction on behalf of the Bank.
   3. Respondent shall submit to the FDIC, within 60 days, written management policies designed to prevent a recurrence of the transactions giving rise to this proceeding.
   Notwithstanding the provisions of this ORDER, the Bank may accept deposits to * * * account, honor drafts drawn on collected funds for his account, or engage in other transactions which would inure to the benefit of * * * solely in his capacity as a shareholder of the Bank.
   This ORDER shall be binding upon * * * and the BANK, its directors, officers, agents, employees, successors, assigns, and other persons participating in the conduct of its affairs.
   The provision of this ORDER shall remain effective and enforceable except to the extent that, and until such time as, any provision of this ORDER shall have been modified, terminated, suspended, or set aside by the FDIC.
   By direction of the Board of Review, pursuant to delegated authority.
   Dated at Washington, D.C. this ____ , day of ____, 1985.

/s/ Margaret M. Olsen
Assistant Executive Secretary

LIST OF EXHIBITS

Exhibit 1 NOTICE OF CHARGES
AND OF HEARING
Dated August 13, 1984
Exhibit 2 TEMPORARY ORDER TO
CEASE AND DESIST
Dated August 13, 1984
Exhibit 3 ANSWER TO NOTICE OF
CHARGES
Dated September 12, 1984
Exhibit 4 ORDER of Administrative
Law Judge
Dated October 16, 1984
Exhibit 5 NOTICE OF HEARING
Dated October 16, 1984
Exhibit 6 TRIAL MEMORANDUM (by
FDIC)
Dated October 31, 1984
Exhibit 7 OFFSITE
REVIEW/VISITATION
REPORT
Dated June 29, 1984
Exhibit 8 REPORT OF
EXAMINATION
Examined Close of Business
July 20, 1984
Exhibit 9 LETTER FROM
RESPONDENT'S
COUNSEL
Dated November 1, 1984
Exhibit 10 NOTICE by Administrative
Law Judge
Dated November 6, 1984
Exhibit 11 PROPOSED ORDER (by
FDIC)
Dated November 20, 1984
Exhibit 12 RESPONSIVE COMMENTS
   Dated December 5, 1984

CERTIFICATE OF SERVICE
   I hereby certify that I have served a copy of the attached Recommended Decision of Administrative Law Judge Peter C. Edison to all parties in this proceeding on 31st day of January, 1985, by postage prepaid first class U.S. mail.
/s/ LOUIS N. DOWDY
Lead Hearing Clerk
Office of Hearings and Appeals
Suite 400, 501 Union Bldg.
Nashville, Tennessee 37219