Home > Regulation & Examinations > Bank Examinations > FDIC Enforcement Decisions and Orders |
|||
FDIC Enforcement Decisions and Orders |
|
{{7-31-91 p.C-556}}
Bank to cease and desist from such practices as operating with management policies and practices which are detrimental to the Bank and jeopardize the safety of its deposits; operating with board of directors who fail to adequately supervise and direct management; operating with inadequate level of capital protection and excessive level of adversely classified assets; engaging in hazardous lending and ineffective and lax collection practices; operating with inadequate loan loss reserve and inadequate written loan policies and procedures; extending credit which is inadequately secured and without adequate documentation; refinancing credits to borrowers in weak financial positions without improving collateral margins or establishing structured repayment programs; renewing or extending the due dates of loans without collection in cash of interest due; and operating with inadequate liquidity. (This order was terminated by order of the FDIC, dated 5-15-91; see ¶
[.1] Primary CapitalIncreaseMethods
In the Matter of
The Texas Bank and Trust of Temple, Temple, Texas ("Bank"), through its board of directors, having been advised of its right to the issuance and service of a NOTICE OF CHARGES AND OF HEARING detailing the unsafe or unsound banking practices alleged to have been committed by the Bank and of its right to a hearing on the alleged charges under section 8(b) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. § 1818(b), and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER TO CEASE AND DESIST ("CONSENT AGREEMENT") with counsel for the Federal Deposit Insurance Corporation ("FDIC") dated August 27, 1990, whereby solely for the purpose of this proceeding and without admitting or denying the alleged charges of unsafe or unsound banking practices, the Bank consented to the issuance of an ORDER TO CEASE AND DESIST ("ORDER") by the FDIC.
ORDER TO CEASE AND DESIST
IT IS ORDERED, that the Bank and institution-affiliated parties of the Bank cease and desist from the following unsafe or unsound banking practices:
[.1] 1. (a) Within 90 days after the effective date of this ORDER, the Bank shall increase its primary capital by no less than $2,300,000; and for so long thereafter as this ORDER is outstanding, the Bank shall maintain adjusted primary capital equal to or greater than 7.5 percent of the Bank's adjusted total assets. Such increase in primary capital and any increase in primary capital necessary to meet the ratio required by this ORDER may be accomplished by:
[.3] 3. (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 February 16, 1990. Reduction of these assets through proceeds of loans made by the Bank is not considered "collection" for the purpose of this paragraph.
[.7] 7. Within 60 days after the effective date of this ORDER, the board of directors shall establish a committee of the board of directors with the responsibility to ensure that the Bank complies with the provisions of this ORDER. At least 50 percent of the members of such committee shall be directors not employed in any capacity by the Bank other than as a director. The committee shall report monthly to the full board of directors and a copy of the report and any discussion relating to the report or the ORDER shall be noted in the records of the board of directors. Establishment of this committee does not diminish the responsibility or liability of the entire board of directors to ensure compliance with the provisions of this ORDER.
[.8] 8. Within 60 days after the effective date of this ORDER, the Bank shall revise, adopt, and implement written lending and collection policies and procedures to provide effective guidance and control over the Bank's lending function. Such policies shall address, at a minimum, the recommendations/deficiencies described on page 6-a of the February 16, 1990 Report of Examination. The implementation of the policies shall be in a form and manner acceptable to the Regional Director as determined at subsequent examinations or visitations.
[.9] 9. Within 30 days after the effective date of this ORDER, the board of directors shall establish a loan review committee to periodically review the Bank's loan portfolio and identify and categorize problem credits. The committee shall file a report with the board of directors. Such report shall include the following information:
[.10] 10. Within 90 days after the effective date of this ORDER, the Bank, to the best of its ability using reasonable effort, shall eliminate and/or correct all technical exceptions with regard to loan documentation existing in the Bank as of February 16, 1990, as more fully set out on pages 2-d through 2-d-2 of the February 16, 1990 Report of Examination.
[.11] 11. Within 60 days after the effective date of this Order, the Bank shall amend its written funds management policy to include procedures for improving its liquidity position as measured on page 5-a of the February 16, 1990 Report of Examination. The revised funds management policy shall be submitted within said 60 day time period to the Regional Director and the Commissioner for review, and within 30 days after their response, the policy, including any modifications and amendments requested by the Regional Director or Commissioner, shall be adopted by the board of directors of the Bank. The bank shall thereafter immediately initiate measures detailed in the policy to the extent such measures have not previously been initiated.
[.12] 12. After the effective date of this ORDER, the Bank shall send to its shareholders or otherwise furnish a description of this ORDER, (1) in conjunction with the Bank's next shareholder communication, and also (2) in conjunction with its notice or proxy statement preceding the Bank's next shareholder meeting. The description shall fully describe the ORDER in all material respects. The description and any accompanying communication, statement, or notice shall be sent to the FDIC, Registration and Disclosure Unit, Washington, D.C. 20429, for review at least 20 days prior to dissemination to shareholders. Any changes requested to be made by the FDIC shall be made prior to dissemination of the description, communication, notice, or statement.
[.13] 13. Within 30 days after the end of the first calendar quarter following the effective date of this ORDER, and within 30 days after the end of each calendar quarter thereafter, the Bank shall furnish written progress reports to the Regional Director and the Commissioner detailing the form and manner of any actions taken to secure compliance with this ORDER and the results thereof. Such reports may be discontinued when the corrections required by this ORDER have been accomplished and
{{3-31-95 p.C-561}}the Regional Director and the Commissioner have released the Bank in writing from making further reports. |
|
Last Updated 6/6/2003 | legal@fdic.gov |