EXHIBIT 10.1
AGREEMENT BY AND BETWEEN
CBC National Bank
Fernandina Beach, Florida
and
The Comptroller of the
Currency
CBC National Bank, Fernandina Beach,
Florida (“Bank”) and the Comptroller of the Currency of
the United States of America (“Comptroller”) wish to
protect the interests of the depositors, other customers, and
shareholders of the Bank, and, toward that end, wish the Bank to
operate safely and soundly and in accordance with all applicable
laws, rules and regulations.
The Comptroller has found unsafe and
unsound banking practices relating to the Bank’s increasing
credit risk. Additional actions by the Board and management
are needed to restore the Bank to a safe and sound
condition.
In consideration of the above premises,
it is agreed, between the Bank, by and through its duly elected and
acting Board of Directors (“Board”), and the
Comptroller, through his authorized representative, that the Bank
shall operate at all times in compliance with the articles of this
Agreement.
ARTICLE I
JURISDICTION
(1)
This Agreement shall be construed to be a
“written agreement entered into with the agency” within
the meaning of 12 U.S.C. § 1818(b)(1).
(2)
This Agreement shall be construed to be a
“written agreement between such depository institution and
such agency” within the meaning of 12 U.S.C. §
1818(e)(1) and 12 U.S.C. § 1818(i)(2).
(3)
This Agreement shall be construed to be a
“formal written agreement” within the meaning of 12
C.F.R. § 5.51(c)(6)(ii). See 12 U.S.C.
§ 1831i.
(4)
This Agreement shall be construed to be a
“written agreement” within the meaning of 12 U.S.C.
§ 1818(u)(1)(A).
(5)
All reports or plans which the Bank or
Board has agreed to submit to the Assistant Deputy Comptroller
pursuant to this Agreement shall be forwarded to the:
Assistant Deputy Comptroller
North Florida Field Office
8375 Dix Ellis Trail, Suite
403
Jacksonville, FL 32256
ARTICLE II
CREDIT RISK
(1)
The Board shall continue to ensure
Bank adherence to a written program to reduce the high level of
credit risk in the Bank. The program shall include, but not
be limited to:
(a)
procedures to strengthen credit
underwriting, particularly in the commercial real estate (CRE)
portfolio;
(b)
procedures to strengthen loan portfolio
management, to include internal lending guidelines and
concentration limits that control the Bank’s overall risk
exposure to CRE, and a contingency plan to reduce or mitigate
concentrations in the event of adverse market conditions, including
a plan to limit CRE growth if concentrations become
excessive;
(c)
procedures to maintain an adequate,
qualified staff in all credit related functional areas, including
the Bank’s special assets division;
(d)
procedures for continued strengthening of
collections; and
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(e)
an action plan to identify, measure,
monitor and manage CRE concentration risk and future CRE
growth.
(2)
The Board shall submit a copy of the
program to the Assistant Deputy Comptroller.
(3)
At least quarterly, the Board shall
prepare a written assessment of the Bank’s credit risk, which
shall evaluate the Bank’s progress under the aforementioned
program. The Board shall submit a copy of this assessment to
the Assistant Deputy Comptroller.
ARTICLE III
CRITICIZED ASSETS
(1)
The Bank shall take immediate and
continuing action to protect its interest in those assets
criticized in the ROE, in any subsequent Report of Examination, by
internal or external loan review, or in any list provided to
management by the National Bank Examiners.
(2)
The Board shall continue to ensure Bank
adherence to a written program designed to eliminate the basis of
criticism of assets criticized in the ROE, in any subsequent Report
of Examination, or by any internal or external loan review, or in
any list provided to management by the National Bank Examiners as
“doubtful,” “substandard,” or
“special mention.” This program shall include, at
a minimum:
(a)
an identification of the expected sources
of repayment;
(b)
the appraised value of supporting
collateral and the position of the Bank’s lien on such
collateral where applicable;
(c)
an analysis of current and satisfactory
credit information, including cash flow analysis where loans are to
be repaid from operations; and
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(d)
the proposed action to eliminate the
basis of criticism and the time frame for its
accomplishment.
(3)
Upon adoption, a copy of the program for
all criticized assets equal to or exceeding five hundred thousand
dollars ($500,000) shall be forwarded to the Assistant Deputy
Comptroller.
(4)
The Board, or a designated committee,
shall conduct a review, on at least a monthly basis, to
determine:
(a)
the status of each criticized asset or
criticized portion thereof that equals or exceeds five hundred
thousand dollars ($500,000);
(b)
management’s adherence to the
program adopted pursuant to this Article;
(c)
the status and effectiveness of the
written program; and
(d)
the need to revise the program or take
alternative action.
(5)
A copy of each review shall be forwarded
to the Assistant Deputy Comptroller on a quarterly basis in a
format similar to Appendix A, attached hereto.
(6)
The Bank may extend credit, directly or
indirectly, including renewals, extensions or capitalization of
accrued interest, to a borrower whose loans or other extensions of
credit are criticized in the ROE, in any subsequent Report of
Examination, in any internal or external loan review, or in any
list provided to management by the National Bank Examiners and
whose aggregate loans or other extensions exceed five hundred
thousand dollars ($500,000) only if each of the following
conditions is met:
(a)
the Board or designated committee finds
that the extension of additional credit is necessary to promote the
best interests of the Bank and that prior to renewing, extending or
capitalizing any additional credit, a majority of
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the full Board (or designated committee)
approves the credit extension and records, in writing, why such
extension is necessary to promote the best interests of the Bank;
and
(b)
a comparison to the written program
adopted pursuant to this Article shows that the Board’s
formal plan to collect or strengthen the criticized asset will not
be compromised.
(7)
A copy of the approval of the Board or of
the designated committee shall be maintained in the file of the
affected borrower.
ARTICLE IV
PROFIT PLAN
(1)
Within sixty (60) days, the Board shall
review, revise as needed, and thereafter ensure Bank
adherence to its written profit plan to improve and sustain the
earnings of the Bank. This plan shall include, at minimum,
the following elements:
(a)
identification of the major areas in and
means by which the Board will seek to improve the Bank’s
operating performance;
(b)
realistic and comprehensive budgets,
including projected balance sheets and year-end income
statements;
(c)
a budget review process to monitor both
the Bank’s income and expenses, and to compare actual figures
with budgetary projections;
(
