|
{{6-30-00 p.C-4791}}
[¶11,653] In the Matter of First Bank of Jacksonville, Jacksonville, Florida, No. 99-077ss (9-8-99)
The FDIC issued an order against the Bank for failure to submit an acceptable plan to comply with established Year 2000 safety and soundness standards.(This order was terminated by order of the FDIC dated 10-21-99; see ¶16,243., and by order of the FDIC dated 4-4-00; see ¶16,255)
In the Matter of
FIRST BANK OF JACKSONVILLE
JACKSONVILLE, FLORIDA
(Insured State Nonmember Bank)
SAFETY AND SOUNDNESS ORDER
FDIC-99-077ss
The Federal Deposit Insurance Corporation ("FDIC") has determined that First Bank of Jacksonville, Jacksonville, Florida ("Bank"), is operating with deficiencies in meeting the safety and soundness standards established under section 39 of the Federal Deposit Insurance Act ("Act"), 12 U.S.C. § 1831p-1, and Part 364 of the FDIC Rules and Regulations, 12 C.F.R. Part 364. The FDIC hereby issues this SAFETY AND SOUNDNESS ORDER ("ORDER") pursuant to 12 U.S.C. § 1831p-1(e)(2) and the provisions of Part 308, Subpart R of the FDIC Rules of Practice and Procedure, 12 C.F.R. Part 308, Subpart R.
Upon analysis and review of information made available to the Deputy Director of the FDIC's Division of Supervision and the Bank's response to the NOTICE OF INTENT TO ISSUE A SAFETY AND SOUNDNESS ORDER ("NOTICE") issued by the FDIC, the FDIC finds and concludes as follows:
FINDINGS OF FACT AND
CONCLUSIONS OF LAW
1. The Bank is a corporation existing and doing business under the laws of the State of Florida. The Bank is and has been, at all times relevant to this matter, an insured State nonmember bank, subject to the Act, 12 U.S.C. §§ 1811—1831u, the FDIC Rules and Regulations, 12 C.F.R. Chapter III, and the laws of the State of Florida.
2. The FDIC has determined that the Bank is deficient in meeting the safety and soundness standards established under Part 364 of the FDIC Rules and Regulations, 12 C.F.R. Part 364, by virtue of the following:
a. The board of directors has failed to provide sufficient resources for the Bank to meet Year 2000 timetables established by the FFIEC;
b. The Bank's Year 2000 project plan does not adequately address critical aspects of the Year 2000 program;
c. The Bank's Business Resumption Contingency Plan is inadequate;
d. The Bank has not fully implemented its formal Year 2000 liquidity guidelines;
e. The Bank has not completed an effective external review of its Year 2000 program.
3. On May 21, 1999 the FDIC notified the Bank of the deficiencies and requested the Bank to submit a compliance plan, in accordance with section 308.302(b) of the FDIC Rules of Practice and Procedure, 12 C.F.R. § 308.302(b).
4. The compliance plan submitted by the Bank was deemed unacceptable by the FDIC and a NOTICE OF INTENT TO ISSUE A SAFETY AND SOUNDNESS ORDER ("NOTICE") was issued on July 21, 1999.
5. The Bank filed a response to the NOTICE on August 4, 1999, which included a revised Year 2000 Plan.
6. The FDIC has determined that the rev-
{{6-30-00 p.C-4792}}ised Year 2000 plan submitted by the Bank remains unacceptable by virtue of the following:
a. The board of directors has failed to allocate the necessary resources in order to comply with FFIEC guidelines. The bank is currently operating without a President and Chief Executive Officer and the Year 2000 project manager has not been given the requisite authority to fulfill his responsibilities regarding Year 2000 readiness.
b. The plan does not establish acceptable guidelines for the renovation of all mission-critical systems within an acceptable time frame.
c. The plan fails to address implementation of internal mission-critical systems that are Year 2000 ready.
d. The plan does not provide a strategy to test the business resumption contingency plan.
e. The plan does not specifically require that monthly management reports to the board of directors contain the information outlined in the "Interagency Statement on Year 2000 Business Risk."
f. The plan does not provide for the submission of monthly written progress reports to the Regional Director of the FDIC and the Comptroller of the State of Florida.
7. Upon consideration of the facts recited in paragraphs 1 through 6 above, the FDIC has determined that the Bank is deficient in meeting the safety and soundness standards established under Part 364 of the FDIC Rules and Regulations, 12 C.F.R. Part 364.
SAFETY AND SOUNDNESS ORDER
After taking into consideration the FINDINGS OF FACT AND CONCLUSIONS OF LAW stated herein and contained in preliminary form in the NOTICE, and the written response of the Bank to the NOTICE, IT IS HEREBY ORDERED, that the Bank:
1. Allocate all necessary resources to achieve compliance with FFIEC Year 2000 guidelines. Within 15 days of the effective date of this Order, the board of directors shall:
(a) hire and retain a qualified Year 2000 consultant, or qualified personnel, to oversee implementation of an acceptable Year 2000 Plan, whereby the Bank achieves compliance with all FFIEC Year 2000 guidelines within 20 days of the effective date of this Order. The board of directors shall provide the consultant or hired personnel with sufficient resources to achieve Year 2000 compliance within that time frame. The qualifications of the Year 2000 consultant or personnel shall be assessed on the ability of the Year 2000 consultant or personnel to comply with the provisions of this Order.
(b) appoint and retain a qualified senior bank officer as the Year 2000 project manager. The board of directors shall provide the Year 2000 project manager with sufficient resources and authority to achieve Year 2000 compliance. The Year 2000 project manager shall submit monthly reports regarding the status of the Bank's Year 2000 readiness to the board of directors. The monthly reports shall address the items specified for quarterly board reports in the Guidelines, the FFIEC Guidance and, specifically, the FFIEC's December 17, 1997 issuance entitled "Interagency Statement on Year 2000 Business Risk." The qualifications of the Year 2000 project manager shall be assessed on his/her ability to comply with the provisions of this Order.
2. Within 15 days of the effective date of this Order, renovate, as necessary, all mission-critical systems used by the Bank to make them Year 2000 ready and, within 20 days from the effective date of this Order, implement those Year 2000 ready systems.
3. Develop a Business Resumption Contingency Plan within 20 days of the effective date of the Order that provides workable plain language guidance to employees and can be implemented immediately. At a minimum, the Business Resumption Contingency Plan shall:
(a) set forth the Bank's plans to recover lost or damaged data and to mitigate risks associated with the failure of its systems at critical dates;
(b) include identification of the Bank's core business processes and a specific recovery plan for the possible failure of each core business process;
(c) establish a manual bookkeeping system to operate parallel with the computer system beginning November 1, 1999, unless the FDIC and State Regulatory authorities have reviewed and verified that the bank is operating in compliance with all FFIEC Year 2000 guidelines; and
(d) develop a method to validate and
{{5-31-01 p.C-4793}}test the Business Resumption Contingency Plan within 20 days of the effective date of the Order.
4. Provide for the external review of Year 2000 readiness by a qualified, independent third party within 30 days from the effective date of the Order.
5. Establish a line of credit with the appropriate Federal Reserve Bank within 20 days of the effective date of this Order.
6. Following the effective date of this Order the Bank shall send to its shareholders or otherwise furnish a description of this Order (i) in conjunction with the Bank's next shareholder communication and also (ii) in conjunction with its notice or proxy statement preceding the Bank's next shareholder meeting. The description shall fully describe this Order in all material respects. The description and any accompanying communication, statement or notice shall be sent to the FDIC, Registration and Disclosure Section, 550 17th Street, Washington, D.C. 20429, and to the Comptroller of the State of Florida, for review at least twenty (20) days prior to dissemination to shareholders. Any changes requested to be made by the FDIC or the Comptroller shall be made prior to dissemination of the description, communication, notice or statement.
7. Provide for the submission of a progress report on the requirements of this Order within 30 days of the effective date of the Order, and monthly thereafter, until the Order is terminated. The progress report shall be sent to the Regional Director of the FDIC and the Comptroller of the State of Florida.
This ORDER will become effective ten (10) days after its issuance. The provisions of this ORDER will be binding upon the Bank, its institution-affiliated parties, successors and assigns. Each provision of this ORDER shall remain effective and enforceable except to the extent that, and until such time as, any provision shall be modified, terminated, suspended, or set aside by the FDIC.
Pursuant to delegated authority.
Dated this 8th day of September, 1999.
|
