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Risk Management Manual of Examination Policies

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Section 17.1 - Bank of Anytown-Report of Examination

Compliance with Enforcement Actions

A Memorandum of Understanding (MOU) between the FDIC and the bank became effective on July 31, 2003 . Detailed below are provisions of the MOU which need further efforts, are requirements of a continuing nature, or for which time limits have not expired.


The bank shall maintain an adequate Allowance for Loan and Lease Losses.

Based on this examination's findings, the Allowance for Loan and Lease Losses is inadequate by at least $325M. Refer to the Examination Conclusions and Comments (ECC) page of this Report for details.


The bank shall maintain a Tier 1 Leverage Capital ratio at or in excess of seven percent.

As of June 30, 2004 , the Tier 1 Leverage Capital ratio is 7.44 percent.


The bank shall comply with the FDIC's Statement of Policy on Risk-Based Capital.

As of June 30, 2004 , the Total Risk-Based Capital ratio is 11.75 percent. The Tier 1 Risk-Based Capital Ratio is 10.48 percent.


The bank shall file accurate Call Reports.

Examiners noted significant errors in the December 31, 2003 , and the March 31 and June 30, 2004 , Call Reports which require amendments. Refer to the ECC page for details.


The bank shall not extend or renew, directly or indirectly, credit to, or for the benefit of, any borrower who has a loan or other extension of credit with the bank that has been charged off or classified, in whole or in part, Loss, Doubtful, or Substandard, unless rationale for the extension is noted in the official Board minutes and the appropriate credit file.

An extension of $50M was made to U. R. Worthless. The borrower was adversely classified Loss at the previous examination. The Board did not specifically document the reason(s) for the extension in the official Board minutes or in the appropriate credit file.


The bank shall not declare or pay any dividends without the written consent of the FDIC.

No dividends have been declared or paid since the previous examination.


Last Updated 02/02/2005 supervision@fdic.gov

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