{{5-31-02 p.C-1692}}
[¶10,387A] In the Matter of The Washington Bank, Fairfax County, Virginia, Docket
No. 91-376kk (11-26-91).
FDIC issues order conditionally granting approval for exemption of
liability.
[.1] Exemption from Liability—Conditional on Control of Bank—Time Frame
[.2] Exemption from Liability—Conditional on Increase in Stockholders'
Equity
[.3] Exemption from Liability—Distribution of Money from Stock
[.4] Exemption from Liability—Review of Loans
[.5] Exemption from Liability—Revocation for Non-Compliance
In the Matter of
THE WASHINGTON BANK
FAIRFAX COUNTY, VIRGINIA
(Insured Depository Institution)
related to
THE NATIONAL BANK OF WASHINGTON
WASHINGTON, DISTRICT OF COLUMBIA
and
THE WASHINGTON BANK (OF MARYLAND)
BALTIMORE, MARYLAND
(Commonly Controlled Insured Depository Institutions)
ORDER CONDITIONALLY GRANTING APPROVAL FOR EXEMPTION FROM LIABILITY
FDIC-91-376kk
WHEREAS, The Washington Bancorporation, Washington, District of
Columbia ("WBC") is a bank holding company which owns 100 percent
of the stock of The Washington Bank, Fairfax County, Virginia
("Bank"), an insured depository institution; and
WHEREAS, The Washington Bank Acquisition Company, or persons who
comprise The Washington Bank Acquisition Company, Fairfax County,
Virginia ("Acquiring Party"), was organized by a majority of
directors of the Bank to acquire the Bank from WBC; and
WHEREAS, WBC, the Bank, and the Acquiring Party (collectively
"Co-Applicants") have filed with the Federal Deposit Insurance
Corporation ("FDIC") an application pursuant to section
5(e)(5)(A) of the Federal Deposit Insurance Act ("Act"), 12
U.S.C. §1815(e)(5)(A); and
WHEREAS, the Acquiring Party has proposed to the FDIC that the
Acquiring Party purchase and recapitalize the Bank by offering $100,000
for 100 percent of the stock of the Bank and providing at least
$4,000,000 in cash to recapitalize the Bank; and
WHEREAS, the Bank was affiliated with The National Bank of Washington,
Washington, District of Columbia ("NBW"), which failed on August
10, 1990, and The Washington Bank (of Maryland), Baltimore, Maryland
("TWBM"), which failed on May 10, 1991, both of which were also
owned by WBC; and
WHEREAS, the Co-Applicants have requested that the FDIC grant an
exemption from liability for any losses the FDIC may incur or
reasonably anticipates incurring from the default of NBW and TWBM, such
request being filed pursuant to the provisions of section 5(e)(5)(A) of
the Act, 12 U.S.C. §1815(e)(5)(A); and
WHEREAS, the Board of Directors ("Board") of the FDIC, having
fully considered the facts and information relating to the foregoing
request for exemption from losses, has concluded that an exemption is
in the best interests of the Bank Insurance Fund and that approval of
the application for exemption should be granted subject to the
conditions and restrictions set forth below.
IT IS THEREFORE ORDERED:
[.1]1. This ORDER CONDITIONALLY GRANTING APPROVAL FOR EXEMPTION FROM
LIABILITY ("ORDER") shall become effective upon the acquisition
of control of the Bank by the Acquiring Party, provided the transaction
is completed within six months from the date of issuance of this ORDER,
unless a request for extension of time has been submitted and approved
by the FDIC.
[.2]2. Immediately upon the acquisition of the Bank by the Acquiring Party,
the Bank's common stockholders' equity, as that term is defined in
§325.2(d) of the FDIC's Rules and Regulations, 12 C.F.R.
§325.2(d), shall be increased by no less than $4,000,000.
[.3]3. Immediately upon the acquisition of the Bank by the Acquiring Party,
the $100,000 offered for the stock of the Bank will be distributed in
the following manner. After outside legal fees of no more than $7,500
have been paid, the WBC will receive 5 percent of the remainder and the
FDIC will receive 95 percent of the remainder to offset a portion of
the losses incurred by the FDIC due to the failure of both NBW and
TWBM.
[.4]4. Immediately upon the acquisition of the Bank by the Acquiring Party,
the Bank will present for conveyance to the FDIC all loans that have
been charged off at the Bank as of the date of this ORDER. The FDIC
shall have the discretion to reject any such loan prior to conveyance
by the Acquiring Party. Any and all recovery on the approved and
conveyed charge-offs will be retained by the FDIC, to further offset a
portion of the losses incurred due to the failure of NBW and TWBM.
[.5]5. Should ownership or control of the Bank revert back to WBC at any
time while this waiver is in effect, the ORDER shall be immediately
null and void, without further hearing on the matter.
6. Should the FDIC determine that any Co-Applicant has failed to
complete the requirements of paragraph 1, the FDIC shall have the right
to revoke this exemption after giving the Co-Applicants written notice
of said revocation, and a reasonable opportunity to be heard on the
matter. Should any Co-Applicant fail to comply with the provisions
contained in paragraphs 2, 3, or 4 above, or violate the provision
contained in paragraph 5, the ORDER shall be immediately null and void,
without further hearing on the matter.
By direction of the Board of Directors.
Dated at Washington, D.C., this 26th day of November, 1991.
