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[¶11,744A] In the Matter of Maryland Permanent Bank & Trust Company, Owings Mills,
Maryland,Docket No. 00-107b (11-17-00).
A cease and desist order was issued, based on findings by the FDIC that
it had reason to believe that respondent had engaged in unsafe and unsound practices. (This order was terminated by order of the FDIC dated 12-19-02; see ¶16,324.)
[.1] ManagementQualifications Specified
[.2] ManagementManagement Report Required
[.3] CapitalMaintain Capital Ratio
[.4] Loan Loss ReservePolicy for Determining Accuracy of
[.5] Earnings PlanWritten Earnings Plan Required
[.6] Bank OperationsConflict of Interest Policy Regarding Insiders Required
[.7] AssetsAdversely Classified AssetsReduction Required
[.8] AssetsCharge-off or Collection
[.9] AssetsSpecial MentionEliminate Deficiencies
[.10] LoansExtensions of CreditTo Borrowers with Existing Adversely Classified Credits
[.11] AssetsProblem AssetsIndividual Written Plans Required
[.12] Loan PolicyPreparation or Revision of Policy Required
[.13] LoansInternal Grading System Required
[.14] LoansInternal Review Procedure
[.15] Violations of LawCorrection of Violations Required
[.16] Funds Management and LiquidityPreparation or Revision of Funds Management Policy Required
[.17] Bank OperationsInternal Routine and Control ProceduresWritten Plan Required
[.18] DividendsDividends Restricted
[.19] Bank Holding CompanyPolicy Required
[.20] Board of DirectorsCommittee to Review Compliance with Cease and Desist Order Required
In the Matter of:
MARYLAND PERMANENT BANK & TRUST COMPANY
OWINGS MILLS, MARYLAND
(Insured State Nonmember Bank)
ORDER TO CEASEAND DESIST
FDIC-00-107b
Maryland Permanent Bank & Trust Company, Owings Mills,
Maryland ("Insured Institution"), having been advised of its
right to a Notice of Charges and of Hearing detailing the unsafe or
unsound banking practices and violations of law and/or regulations
alleged to have been committed by the Insured Institution and of its
right to a hearing on the alleged charges under Section 8(b)(1) of the
Federal Deposit Insurance Act ("Act"), 12 U.S.C.
§1818(b)(1), 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 October 16, 2000, whereby,
solely for the purpose of this proceeding and without admitting or
denying the alleged charges of unsafe or unsound banking practices and
violations of law and/or regulations, the Insured Institution 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 Insured Institution had engaged in the
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unsafe or unsound banking practices and had committed violations of law and/or
regulations. The FDIC, therefore, accepted the CONSENT AGREEMENT and
issued the following:
ORDER TO CEASE AND DESIST
IT IS HEREBY ORDERED that the Insured Institution, its
directors, officers, employees, and other institution-affiliated
parties, as that term is defined in Section 3(u) of the Act, 12 U.S.C.
§1813(u), and its successors and assigns, cease and desist from the
following unsafe and unsound banking practices and violations of law
and/or regulations:
(a) Engaging in hazardous lending and lax collection practices;
(b) Operating the Insured Institution with inadequate capital in
relation to the kind and quality of assets held by the Insured
Institution;
(c) Operating the Insured Institution with an excessive volume of poor
quality assets;
(d) Operating the Insured Institution with an inadequate allowance for
loan and lease losses;
(e) Operating the Insured Institution with inadequate liquidity and
funds management;
(f) Operating the Insured Institution with inadequate internal routine
and controls;
(g) Operating the Insured Institution in such a manner as to produce
unsatisfactory earnings;
(h) Engaging in violations of applicable Federal and State laws and/or
regulations, as more fully set forth in the joint Report of Examination
of the Insured Institution by the FDIC and the Division of Financial
Regulation of the State of Maryland ("Division") as of March 31,
2000;
(i) Operating the Insured Institution with management whose policies
and practices are detrimental to the Insured Institution and jeopardize
the safety of its deposits;
(j) Operating the Insured Institution with a board of directors which
has failed to provide adequate supervision over and direction to the
operating management of the Insured Institution; and
(k) Operating the Insured Institution with an excessive reliance upon
volatile funding.
IT IS FURTHER ORDERED, that the Insured Institution take
affirmative action as follows:
[.1] 1. (a) Within 60 days from the effective date of this ORDER, the
Insured Institution shall have management qualified to restore the
Insured Institution to a sound condition. Such management shall include
a chief executive officer who shall be given stated written authority
by the Insured Institution's board of directors. Such written
authority shall include the responsibility for implementing and
maintaining lending policies and other Insured Institution policies in
accordance with sound banking practices.
(b) During the life of this ORDER, the Insured Institution shall notify
the Regional Director of the New York Regional Office of the FDIC
("Regional Director") and the Commissioner of Financial
Regulation of the State of Maryland ("Commissioner") in writing
of any resignations and/or terminations of any members of its board of
directors and/or any of its officers.
(c) The Insured Institution shall comply with section 32 of the Act, 12
U.S.C. §1831i, which includes a requirement that the Insured
Institution shall notify the Regional Director in writing at least 30
days prior to any individual assuming a new position or any additions
to its board of directors and/or senior executive officers.
[.2].2 (a) Within 60 days from the effective date of this ORDER, the
board of directors of the Insured Institution shall review and make a
written report on the Insured Institution's management needs in the
lending area ("Management Report"). The Management Report shall
incorporate an analysis of the Insured Institution's management and
staffing requirements and shall, at a minimum:
(i) identify both number and type of positions needed to properly
supervise the Insured Institution's lending functions, giving
appropriate consideration to the Insured Institution's loan volume,
customer base and the number of problem credits;
(ii) provide a clear and concise description of the general
duties and responsibilities of lending officers and their support
staff;
(iii) identify the skills, experience and pay required for each
position;
(iv) provide an evaluation of the Insured Institution's senior
management and lending officials, indicating whether bank officials
possess the necessary lending and collection experience and
qualifications
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required to adequately perform present and anticipated duties;
(v) establish a plan to recruit, hire and/or replace personnel based on
ability and experience;
(vi) establish a plan providing for periodic evaluation of each
individual's job performance; and
(vii) provide for periodic review of the Insured Institution's
management and updating of lending policies and procedures.
(b) Within 90 days from the effective date of this ORDER,
the board of directors of the Insured Institution shall prepare a
written plan of implementation ("Plan") addressing the findings
of the Management Report. The Plan shall specify the actions to be
taken by the board of directors and the time frames for each action.
(c) A copy of the Management Report and Plan shall promptly be
submitted to the Regional Director and the Commissioner for review and
comment. Within 30 days from receipt of all comments, and after
consideration of such comments, the board of directors of the Insured
Institution shall approve the Management Report and Plan, which
approval shall be recorded in the minutes of the meeting of the
board of directors. It shall remain the responsibility of the board to
fully implement the Plan within the specified time frames. In the event
the Plan, or any portion thereof, is not implemented, the board shall
immediately advise the Regional Director and the Commissioner, in
writing, of the specific reasons for deviating from the Plan.
[.3] .3 The Insured Institution shall maintain its total risk-based
capital ratio, Tier 1 risk-based capital ratio, and leverage ratio at
levels which, but for section 325.103(b)(1)(iv) of Part 325 of the
FDIC's Rules and Regulations, would be sufficient for it to be deemed
well capitalized within the meaning of section 325.103(b)(1). For the
purposes of this ORDER, the terms total risk-based capital ratio, Tier
1 risk-based capital ratio, and leverage ratio will have the meanings
ascribed to them in Part 325 of the FDIC's Rules and Regulations,
respectively sections 325.2(w), 325.2(u) and 325.2(k).
[.4] .4 (a) Within 30 days from the effective date of this ORDER, the board
of directors of the Insured Institution shall adopt a method of
computing the balance of the Insured Institution's allowance for loan
and lease losses that gives consideration to the volume and composition
of criticized loans, including, but not limited to (1) results of the
Insured Institution's internal loan review, (2) loan loss experience,
(3) an estimate of potential loss exposure on each significant credit,
(4) concentrations of credit in the Insured Institution, and (5)
present and prospective economic conditions. Immediately thereafter,
the board of directors of the Insured Institution shall review the
adequacy of the Insured Institution's allowance for loan and lease
losses utilizing the method adopted pursuant to this paragraph, and
shall make such additional provisions for loan and lease losses that
are necessary to maintain the allowance at an adequate level relative
to the volume of risk in the Insured Institution's loan portfolio.
Thereafter, the Insured Institution's board of directors shall, during
the first month of each quarter, reevaluate the allowance for loan and
lease loses and make such additional provisions for loan and lease
losses that are necessary to maintain the allowance at an adequate
level relative to the volume of risk in the Insured Institution's loan
portfolio. All such additional provisions for loan and lease losses
shall be made in the first month of the calendar quarter in which the
deficiency in the allowance is identified, but as of the end of the
preceding calendar quarter, and shall be reflected in the Report of
Condition and Income filed in the calendar quarter in which the
deficiency is identified with respect to the preceding calendar
quarter. The minutes of the board of directors of the Insured
Institution shall reflect that such reevaluation has been performed,
and documentary proof of the method employed in determining the level
of the allowance shall be maintained for future regulatory revew.
(b) All increases in the allowance for loan and lease losses, with the
exception of recoveries credited directly to the allowance, shall be
accomplished by charges to operating earnings through the provision for
loan and lease losses.
(c) All references to loans in this ORDER shall be deemed to include
all other forms of extensions of credit.
[.5] .5 (a) Within 90 days from the effective date of this ORDER, and within
the first 30 days of each calendar year thereafter, the board of
directors of the Insured Institution shall develop a written earnings
plan con
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sisting of goals and strategies for improving the earnings of
the Insured Institution for each calendar year. The written earnings
plan shall include, at a minimum:
(i) identification of the major areas in, and means by, which the
board of directors will seek to improve the Insured Institution's
operating performance;
(ii) realistic and comprehensive budgets;
(iii) a budget review process to monitor the income and expenses of the
Insured Institution to compare actual figures with budgetary
projections on not less than a quarterly basis; and
(iv) a description of the operating assumptions that form the basis
for, and adequately support, major projected income and expense
components.
(b) Such written earnings plan and any subsequent modification
thereto shall be submitted to the Regional Director and the
Commissioner for review and comment. Within 30 days from receipt of all
comments from the Regional Director and the Commissioner, the board of
directors shall approve the written earnings plan, which approval shall
be recorded in the minutes of the meeting of the board of directors of
the Insured Institution. Thereafter, the Insured Institution shall
follow the written earnings plan and/or any subsequent modification
thereto.
[.6] .6 Within 60 days from the effective date of this ORDER, the Insured
Institution shall develop, adopt and implement written policies and
procedures designed to bring to the attention of each member of the
board of directors conflicts of interest which may arise due to the
director's participation in the review, consideration or approval of
an extension of credit or other transaction in which any officers,
directors or principal stockholders of the Insured Institution
("Insiders") are directly or indirectly involved. Such policies
and procedures shall, at a minimum, ensure that each member of the
board has been apprised of any potential conflict prior to
participating in the review or consideration of such transaction(s) in
which Insiders and/or their business associates are, directly or
indirectly, involved. The results of board deliberations as to
potential conflicts shall be reflected in the minutes of the meeting of
the board of directors.
[.7] .7 Within 10 days from the effective date of this ORDER, the Insured
Institution shall eliminate from its books, by collection or
charge-off, all assets or portions of assets classified "Loss"
and 50 percent of all assets or portions of assets classified
"Doubtful" by the FDIC and the Division as a result of their
joint examination of the Insured Institution as of March 31, 2000,
which have not been previously charged of or collected. In addition,
and so long as this ORDER remains in effect, the Bank shall, within 30
days from the receipt of any subsequent Report of Examination of the
Insured Institution from the FDIC or the Division, eliminate from its
books, by collection or charge-off, all assets or portions of assets
classified "Loss" and 50 percent of all assets or portions of
assets classified "Doubtful" in said Reports of Examination.
Elimination of these assets through the use of the proceeds of loans or
other extensions of credit made by the Insured Institution does not
constitute collection for the purposes of this ORDER.
[.8] .8 (a) Within 180 days from the effective date of this ORDER, the
Insured Institution shall reduce the remaining total of all assets
classified "Doubtful" and "Substandard" by the FDIC and the
Division as a result of their joint examination of the Insured
Institution as of March 31, 2000, to not more than 50 percent of Tier 1
capital plus allowance for loan and lease losses.
(b) As used in this ORDER, the word "reduce" means (1) to
collect, (2) to charge off, or (3) to improve the quality of adversely
classified assets sufficiently to warrant removing any adverse
classification, as determined by the FDIC and the Division. Reduction
of these assets through the use of the proceeds of loans or other
extensions of credit made by the Insured Institution does not
constitute collection for the purposes of this ORDER. The requirements
of this paragraph shall not be construed as a standard for future
operation of the Insured Institution.
[.9] .9 Within 60 days from the effective date of this ORDER, the Insured
Institution shall take all necessary steps to eliminate all
deficiencies noted in all assets scheduled as "Special Mention"
by the FDIC and the Division as a result of their joint examination of
the Bank as of March 31, 2000, and within 60 days from the receipt of
any subsequent Report of Examination from the FDIC or the Division, the
Insured Institution shall take the necessary steps to eliminate all
deficiencies noted in all assets scheduled as "Special Mention"
in each such Report.
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[.10] .10 (a) Immediately upon the effective date of this ORDER, the Insured
Institution shall not extend, either directly or indirectly, any new or
additional credit (which, for the purposes of this ORDER, shall include
the granting of renewals or extensions, or the capitalizing of accrued
interest), to or for the benefit of any borrower who is obligated in
any manner to the Insured Institution on any extension of credit, or
portion thereof, which has been charged off the books of the Insured
Institution, in whole or in part, or to any affiliate or related
interest of, or other person or entity associated with, any such
borrower ("charged-off borrower"), so long as any portion of such
extension of credit, whether or not that portion was charged off,
remains uncollected. The provisions of this paragraph 10(a) shall not
apply to the advance of funds by the Insured Institution for the sole
purpose of maintaining or protecting the Insured Institution's real
estate collateral for any extension of credit, up to a maximum amount
of $100,000 in the aggregate for all such advances, with respect to
each real estate property securing, in whole or in part, all such
extensions of credit.
(b) Immediately upon the effective date of this ORDER, the Insured
Institution shall not extend, either directly or indirectly, any new or
additional credit to or for the benefit of any borrower who is
obligated in any manner to the Insured Institution on any extension of
credit that has been adversely classified, in whole or in part, by the
FDIC or the Division as a result of their joint examination of the
Insured Institution as of March 31, 2000, or as a result of any
subsequent examination of the Insured Institution by the FDIC or the
Division, or to any affiliate or related interest of, or other person
or entity associated with, any such borrower ("classified
borrower"), so long as such extension of credit remains classified
or uncollected. This paragraph 10(b) shall not prohibit the Insured
Institution for renewing all or any part of an extension of credit to a
classified borrower, after collection in cash of interest due on the
entire extension of credit.
(c) The prohibitions of paragraphs 10(a) and 10(b) shall not apply to
any extension of credit to a charged-off or classified borrower, if:
(i) the Insured Institution's failure to extend further credit
to a charged-off or classified borrower would be substantially
detrimental to the best interests of the Insured Institution;
(ii) the extension of credit fully complies with the requirements of
the Insured Institution's written lending and collection policies and
procedures which have been revised, adopted, and implemented pursuant
to paragraph 12 of this ORDER;
(iii) any extension of credit to a charged-off borrower in connection
with any real estate-related financial transaction, as defined in
§323.2(i), regardless of amount, is supported by a current appraisal
of worth which at a minimum complies in all respects with the
requirements of Part 323 of the FDIC's Rules and Regulations, 12
C.F.R. Part 323;
(iv) a comparison with the written program adopted pursuant to
paragraph 11 of this ORDER shows that the Insured Institution's formal
program to eliminate the basis of criticism of said problem asset is
not compromised; and
(v) prior to extending any credit to a charged-off borrower, or a
classified borrower whose outstanding loans or other extensions of
credit exceed $100,000 in the aggregate, a majority of the Insured
Institution's full board of directors approves the extension of credit
and certifies, in writing, the specific reasons why failure to so act
would be substantially detrimental to the best interests of the Insured
Institution. A copy of the board's certification shall be maintained
in the credit file of the charged-off or classified borrower, and shall
also be submitted promptly to the Regional Director and the
Commissioner.
[.11] .11 (a) Within 30 days from the effective date of this ORDER, the board
of directors of the Insured Institution shall adopt and implement a
written program with regard to each asset equal to or in excess of
$100,000 criticized by the FDIC and the Division as a result of their
joint examination of the Insured Institution as of March 31, 2000, so
as to eliminate the basis of criticism of each such asset. This program
shall include, at a minimum, an assessment of the status of each
criticized asset, the proposed action for eliminating the basis of
criticism, and the time frame for its accomplishment. Once all such
programs are adopted, a copy of the program for each criticized asset
which
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equals or exceeds $100,000 shall be forwarded to the Regional
Director and the Commissioner. Furthermore, while this ORDER is in
effect, the Insured Institution's board of directors shall, within 30
days following receipt of any Report of Examination of the Insured
Institution from the FDIC or the Division, adopt and implement written
programs, as specified above, for any assets criticized in said
Reports, and forward copies of such programs to the Regional Director
and the Commissioner. For the purposes of this ORDER, the term
"criticized asset" means any asset or portion thereof (including
any unfunded commitment), scheduled as "Special Mention",
"Substandard", or "Doubtful" in any Report of Examination
of the Insured Institution by the FDIC or the Division.
(b) The Insured Institution's board of directors shall conduct a
review of each program adopted pursuant to paragraph 11(a) of this
ORDER on at least a monthly basis, to determine:
(i) the status of each criticized asset;
(ii) management's adherence to each written program;
(iii) the status and effectiveness of each written program; and
(iv) the need to revise each written program and/or take other actions.
The board shall send quarterly progress reports on the status of
each criticized asset equal to or exceeding $100,000 to the Regional
Director and the Commissioner.
[.12] .12 Within 60 days from the effective date of this ORDER, the Insured
Institution's board of directors shall revise its written lending and
collection policies and procedures to provide effective guidance and
control over the lending function of the Insured Institution and shall
submit said revised policies and procedures to the Regional Director
and the Commissioner. At a minimum, said policies and procedures shall
include the following:
(a) Standards for all applications for credit which shall
include, at a minimum:
(i) financial statement requirements;
(ii) credit analysis requirements;
(iii) loan purpose statement requirements;
(iv) identification of repayment sources (primary and secondary);
(v) collateral requirements; and
(vi) documentation requirements.
(b) Effective loan administration, servicing and collection
procedures including, at a minimum:
(i) establishing lending limits for specific officers and loan
amounts requiring board of directors approval;
(ii) establishing appropriate control and periodic review of
collateral;
(iii) setting forth requirements for maintaining current information,
including financial data, in credit files;
(iv) establishing appraisal and inspection standards, and
guidelines for performing reappraisals and reinspections which, at a
minimum, comply with the requirements of Part 323 of the FDIC's Rules
and Regulations, 12 C.F.R. Part 323;
(v) standardizing follow-up procedures on maturing and delinquent
loans;
(vi) ensuring that delinquencies are accurately reported to the board
of directors on a monthly basis;
(vii) placing loans on nonaccrual status in accordance with the
Instructions for Consolidated Reports of Condition and Income; and
(viii) recognizing losses in a timely manner.
(c) A loan review system which will effectively identify,
categorize, and report problem credits to the board of directors. Such
reports shall, at a minimum, include the following information:
(i) the overall quality of the loan portfolio;
(ii) the identification, type and amount of problem loans;
(iii) the identification and amount of delinquent loans;
(iv) credit and collateral documentation exceptions; and
(v) the identification and status of violations of law or regulations.
All references to loans in this ORDER shall be deemed to include
all other forms of extensions of credit.
Upon receipt of written approval or a written statement of
nonobjection from the Regional Director, said policies and procedures
shall be forthwith adopted and implemented by the Insured
Institution's board of directors.
[.13] .13 (a) Within 30 days from the effective date of this ORDER, the
board of direc
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tors of the Insured Institution shall adopt and implement
an internal loan review and grading system to periodically review the
Insured Institution's loan portfolio and identify and categorize
problem credits ("System"). At a minimum, the System shall
provide for:
(i) identifying the overall quality of the loan portfolio;
(ii) the identification and amount of each delinquent loan;
(iii) an identification or grouping of loans that warrant the special
attention of management;
(iv) for each loan identified, a statement of the amount and an
indication of the degree of risk that the loan will not be fully repaid
according to its terms and the reason(s) why the particular loan merits
special attention;
(v) an identification of credit and collateral documentation
exceptions;
(vi) the identification and status of each violation of law, rule or
regulation;
(vii) an identification of loans not in conformance with the Insured
Institution's lending policy, and exceptions to the Insured
Institution's lending policy;
(viii) an identification of insider loan transactions; and
(ix) a mechanism for reporting periodically, but in any event no less
than quarterly, to the board of directors on the status of each loan
identified and the action(s) taken by operating management.
(b) A copy of the reports submitted to the board, as well as
documentation of the action taken by the Insured Institution to collect
or strengthen assets identified as problem credits, shall be kept with
the minutes of the board of directors.
[.14] .14 Within 60 days from the effective date of this ORDER the Insured
Institution's board of directors shall establish and appoint a loan
committee to review and approve in advance all extensions of credit
and/or renewals that, when aggregated with all other extensions of
credit to that borrower, either directly or indirectly, exceed or would
exceed $250,000. The review shall include financial, income, and cash
flow information, collateral values and lien information, repayment
terms, past performance by the borrower, the purpose of the extension,
and whether the extension complies with the Insured Institution's loan
policy and applicable laws, rules, and regulations. The loan committee
shall meet at least monthly and shall maintain written minutes which
document its reviews, conclusions, approvals, denials and
recommendations. At least monthly, the loan committee shall submit its
written minutes to the board of directors. At least three of the
members of the loan committee shall be directors who are not now, and
never have been, involved in the daily operations of the Insured
Institution ("Outside Directors").
[.15] .15 Within 60 days from the effective date of this ORDER, the Insured
Institution shall eliminate and/or correct all violations of law and
regulations as described in the joint Report of Examination of the
Insured Institution by the FDIC and the Division as of March 31, 2000.
[.16] .16 Within 60 days from the effective date of this ORDER, the
Insured Institution shall adopt and implement a written liquidity and
funds management policy. Such policy shall include the establishment of
acceptable ranges of ratios in the following areas: volatile liability
dependence, total loans to total deposits and temporary investments to
volatile liabilities. In addition, the liquidity policy shall
incorporate a funds management program which designates acceptable
levels for: volatile liabilities, including borrowings; asset mix,
including temporary funds and investments, long-term investment
securities and classes of obligors, and loans to deposits; and
rate-sensitive assets as a percent of rate-sensitive liabilities. Such
policy and its implementation shall be in a form and manner acceptable
to the Regional Director and the Commissioner as determined at
subsequent examinations and/or visitations.
[.17] .17 Within 90 days from the effective date of this ORDER, the Insured
Institution's board of directors shall revise, adopt and implement
written policies and procedures to provide effective guidance and
control over the internal routine and controls of the Insured
Institution, in accordance with safe and sound banking practices. Among
other provisions, the revised policies and procedures shall
specifically provide for correction of all internal routine and
controls deficiencies scheduled by the FDIC and the Division as a
result of their joint examination of the Insured Institution as of
March 31, 2000. Such policy and its implementa
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tion shall be in a form
and manner acceptable to the Regional Director and the Commissioner as
determined at subsequent examinations and/or visitations.
[.18] .18 The Insured Institution shall not declare or pay dividends in any
amount except as follows:
(a) That such declarations and payments are made in accordance
with applicable State and Federal laws and regulations;
(b) That after payment of such dividends, the Insured Institution's
total risk-based capital ratio, Tier 1 risk-based capital ratio and
leverage ratio meet or exceed the levels specified for it to be deemed
well capitalized, within the meaning of Part 325 of the FDIC's Rules
and Regulations, section 325.103(b)(1);
(c) That such declaration and payment of dividends shall be approved in
advance by the board of directors of the Insured Institution; and
(d) That the Insured Institution provide prior notice, in writing, to
the Regional Director and the Commissioner of its intention to declare
or pay dividends.
[.19] .19 Within 60 days from the effective date of this ORDER, the Insured
Institution shall adopt and implement a policy for accounting with
respect to its holding company which will address the deficiencies set
forth in the Report of Examination as of March 31, 2000. At a minimum,
the policy shall provide for the use of separate books and ledgers for
the Insured Institution's and the holding company's transactions. The
policy shall also include procedures to ensure that generally accepted
accounting principles are followed, and that the deficiencies set forth
in the Report of Examination as of March 31, 2000 do not recur.
20. Within 15 days of the effective date of this ORDER, the Insured
Institution shall provide the board of directors of its holding company
with a copy of this ORDER.
[.20] .21 The Insured Institution's board of directors shall appoint a
committee composed of at least three directors who are not now and have
never been involved in the daily operations of the Insured Institution,
and whose composition is acceptable to the Regional Director and the
Commissioner (the "Compliance Committee"), to monitor the Insured
Institution's compliance with this ORDER. Within 30 days from the
effective date of this ORDER, and at monthly intervals thereafter, such
Compliance Committee shall prepare and present to the Insured
Institution's board of directors a written report of its findings,
detailing the form, content, and manner of any action taken to secure
compliance with this ORDER and the results thereof, and any
recommendations with respect to such compliance. Such progress reports
shall be included in the minutes of the meeting of the Insured
Institution's board of directors.
22. By the 30th day after the end of the calendar quarter following the
effective date of this ORDER, and by the 15th day after the end of
every calendar quarter thereafter, the Insured Institution shall
furnish written progress reports to the Regional Director and the
Commissioner detailing the form, content, and manner of any actions
taken to secure compliance with this ORDER, and the results thereof.
The effective date of this ORDER shall be (10) days from the date of
its issuance.
The provisions of this ORDER shall be binding upon the Insured
Institution, its directors, officers, employees, and other
institution-affiliated parties.
The Provisions of this ORDER shall remain effective and enforceable
except to the extent that, and until such time as, any provisions of
this ORDER shall have been modified, terminated, suspended, or set
aside by the FDIC.
Pursuant to delegated authority.
Dated: November 17, 2000