Federal Deposit
Insurance Corporation

{{1-31-99 p.C-4658}}
   [¶11,570] In the Matter of Pacific Thrift and Loan Company, Woodland Hills, California, Docket No. 98-96PCAS (11-23-98)

   FDIC issues Supervisory Prompt Corrective Action Directive ordering bank to raise capital.

   [.1] Capital—Increase Required
   [.2] Sale or Merge of Bank—Acceptance of Offer Required
   [.3] Deposits—Interest Paid On—Prevailing Rates
   [.4] Loans—Funding of Restricted
   [.5] Assets—Average Assets—Limit on Increase
   [.6] Bank Operations—Expansion Restricted
   [.7] Compensation—Restricted

In the Matter of

PACIFIC THRIFT AND LOAN COMPANY
WOODLAND HILLS, CALIFORNIA
(Insured State Nonmember Institution)
SUPERVISORY
PROMPT CORRECTIVE
ACTION DIRECTIVE
FDIC-98-96PCAS
   Pacific Thrift and Loan Company, Woodland Hills, California ("Institution"), being a significantly undercapitalized depository institution as that term is defined in section 38(b)(1) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. §1831o(b)(1), and section 325.103 of the Federal Deposit Insurance Corporations's ("FDIC") Rules and Regulations, 12 C.F.R. §325.103, based upon the Institution's Call Report as of June 30, 1998, which shows its capital levels to be at a 12.53% Tier 1 leverage ratio, a 4.55% Tier 1 risk-based capital ratio, and a 5.14% total risk-based capital ratio, and having received a NOTICE OF INTENT TO ISSUE A SUPERVISORY PROMPT CORRECTIVE ACTION DIRECTIVE ("NOTICE") detailing the actions which will be required to be taken by the Institution and/or the proscriptions which will be imposed on the Institution pursuant to section 38 of the Act, 12 U.S.C. §1831o, and section 308.201(a) of the FDIC Rules of Practice and Procedure, 12 C.F.R. §308.201(a), and the Institution having filed a response to the NOTICE pursuant to section 308.201(c) of the FDIC Rules of Practice and Procedure, 12 C.F.R. §308.201(c), and the FDIC having considered said response, the FDIC hereby issues this SUPERVISORY PROMPT CORRECTIVE ACTION DIRECTIVE pursuant to the provisions of section 38 of the Act, 12 U.S.C. §1831o, and section 308.201(d) of the FDIC Rules of Practice and Procedure and Regulations, 12 C.F.R. §308.201(d).

   [.1] IT IS HEREBY DIRECTED, that the Institution shall sell enough voting shares or obligations of the Institution on or before December 31, 1998 so that the Institution will be adequately capitalized after the sale;

   [.2] FURTHER DIRECTED, that the Institution accept an offer to be acquired by a depository institution holding company or to combine with another insured depository institution if notified in writing by the FDIC that one or more grounds exist for appointing a conservator or receiver for the Institution under Section 11(c)(5) of the Federal Deposit Insurance Act, 12 U.S.C. §1821(c)(5);

   [.3] FURTHER DIRECTED, that the Institution restrict the interest rates that the Institution pays on deposits to the prevailing rates of interest on deposits of comparable amounts and maturities paid by FDIC insured thrift and loan companies in the State of California;
   FURTHER DIRECTED, that the Institution shall comply with Section 23A of the Federal Reserve Act as if subsection (d)(1) of that section (exempting transactions with certain affiliated institutions) did not apply;

   [.4] FURTHER DIRECTED, that the Institution shall not commit, expressed or implied, to fund any loan until such time as the Institution or its parent, Pacific America Money Center, Inc. ("parent"), has in place a formal written committed loan production warehousing line of credit ("warehousing line") with a non-affiliated company, such that the warehousing line on the date of said loan commitment exceeds the sum of said commitment and all existing loan funding commitments that are reasonably anticipated to be called upon by the loan customers for funding, based on the Institution's recent history of funding of commitments;

   [.5] FURTHER DIRECTED, that the Institution shall not permit its average total assets, or its average total deposits, during any calendar month to exceed its average total assets, or its average total deposits, during the preceding calendar month. "Average" shall be computed consistent with Section 38(b(2)(A) of the Act (12 U.S.C. §1831o(b)(2)(A));

   [.6] FURTHER DIRECTED, that Institution shall not, directly or indirectly through its parent or any affiliate of the Institution or its parent, or by any other means, establish or operate any domestic branch, as that term is defined in Section 3(o) of the Act (12 U.S.C. §1813(o)), which has not received the prior approval of the FDIC, or establish and operate any place of business or loan production office ("LPO"), as defined in Section 18165 of the California Financial Code, which is required to have the prior approval of the California Department of Financial Institutions, but which has not received such prior approval. "Indirect" operation of such domestic branch or LPO shall include an office of the Institution's parent or any affiliate of the Institution or its parent at which an individual purports to represent the Institution before potential loan or deposit customers or loan brokers;