Exhibit 10.1
AGREEMENT BY AND BETWEEN
MetroBank, National
Association
Houston, TX
And
The Comptroller of the
Currency
MetroBank, National Association, Houston, TX
(“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 including practices relating to asset quality and
earnings.
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
1301 McKinney
Street, Suite 1410
ARTICLE II
COMPLIANCE
COMMITTEE
(1) Within
thirty (30) days of the date of this Agreement, the Board shall
appoint a Compliance Committee of at least five (5) directors, of
which no more than one (1) shall be an employee or controlling
shareholder of the Bank or any of its affiliates (as the term
“affiliate” is defined in 12 U.S.C. § 371c(b)(1)),
or a family member of any such person. Upon appointment, the names
of the members of the Compliance Committee and, in the event of a
change of the membership, the name of any new member shall be
submitted in writing to the Assistant Deputy Comptroller. The
Compliance Committee shall be responsible for monitoring and
coordinating the Bank's adherence to the provisions of this
Agreement.
(2) The
Compliance Committee shall meet at least monthly.
(3) Within
thirty (30) days of the date of this Agreement and quarterly
thereafter, the Compliance Committee shall submit a written
progress report to the Board setting forth in detail:
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a description
of the action needed to achieve full compliance with each Article
of this Agreement;
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actions taken
to comply with each Article of this Agreement; and
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the results and
status of those actions.
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(4) The
Board shall forward a copy of the Compliance Committee's report,
with any additional comments by the Board, to the Assistant Deputy
Comptroller within ten (10) days of receiving such
report.
ARTICLE III
LOAN PORTFOLIO
MANAGEMENT
(1) Within
sixty (60) days, the Board shall review, revise, and thereafter
ensure Bank adherence to its written program to improve the Bank's
loan portfolio management. An acceptable program shall include, but
not be limited to:
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procedures to
ensure satisfactory and perfected collateral
documentation;
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procedures to
ensure that extensions of credit are granted, by renewal or
otherwise, to any borrower only after obtaining and analyzing
current and satisfactory credit information;
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procedures to
ensure conformance with loan approval requirements;
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a system to
track and analyze exceptions;
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procedures to
ensure conformance with Call Report instructions;
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procedures to
ensure the accuracy of internal management information
systems;
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a performance
appraisal process, including performance appraisals, job
descriptions, and incentive programs for loan officers, which
adequately consider their performance relative to policy
compliance, documentation standards, timeliness and accuracy in
credit grading and recognition of nonaccrual loans, and other loan
administration matters; and
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procedures to
track and analyze concentrations of credit, significant economic
factors, and general conditions and their impact on the credit
quality of the Bank’s loan and lease portfolios.
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(2) Upon
revision, a copy of the program shall be forwarded to the Assistant
Deputy Comptroller.
(3) Within
sixty (60) days, the Board shall review, revise, and thereafter
ensure Bank adherence to effective monitoring systems. Acceptable
effective monitoring systems shall include:
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early problem
loan identification to assure the timely and accurate
identification and rating of problem loans and leases, including
nonaccrual loans;
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statistical
records that will serve as a basis for identifying sources of
problem loans and leases by industry, size, collateral, division,
group, indirect dealer, and individual lending officer;
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previously
charged-off assets and their recovery potential;
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compliance with
the Bank's lending policies and laws, rules, and regulations
pertaining to the Bank's lending function;
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adequacy of
credit and collateral documentation; and
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concentrations
of credit.
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(4) On
a quarterly basis, management shall provide the Board with written
reports. Acceptable written reports shall include, at a minimum,
the following information:
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the
identification, type, rating, and amount of problem loans and
leases;
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the
identification and amount of delinquent loans and
leases;
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credit and
collateral documentation exceptions;
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the
identification and status of credit related violations of law, rule
or regulation;
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(e)
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the identity of
the loan officer who originated each loan reported in accordance
with subparagraphs (a) through (d) of this Article and
Paragraph;
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an analysis of
concentrations of credit, significant economic factors, and general
conditions and their impact on the credit quality of the
Bank’s loan and lease portfolios;
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(g)
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the
identification and amount of loans and leases to executive
officers, directors, principal shareholders (and their related
interests) of the Bank; and
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the
identification of loans and leases not in conformance with the
Bank's lending and leasing policies, and exceptions to the
Bank’s lending and leasing policies.
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(5) The
Board shall ensure that the Bank has processes, personnel, and
control systems to ensure implementation of and adherence to the
program and systems developed pursuant to this Article.
ARTICLE IV
CONSTRUCTION LOAN UNDERWRITING
STANDARDS
(1) Within
ninety (90) days, the Board shall review, revise, and thereafter
ensure Bank adherence to its written program to improve its
construction loan underwriting standards. An acceptable program
shall include, but not be limited to, procedures for ensuring
that:
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market
feasibility analyses are performed on construction
projects;
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construction
budgets are analyzed internally for adequacy and reviewed by third
parties for large loans and/or specialized industries (e.g. health
care);
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contractor due
diligence is performed;
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cash flow
analyses are performed on construction loan borrowers;
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current rental
and sales information is maintained on all construction
projects;
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periodic
inspections are performed on all construction projects;
and
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all
construction loans are either in conformity with the Bank's
construction loan policies and procedures or in compliance with the
Bank's written provisions for exceptions to loan policies and
procedures.
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(2) Upon
revision, the Board shall submit a copy of the program to the
Assistant Deputy Comptroller for review.
(3) The
Board shall ensure that the Bank has processes, personnel, and
control systems to ensure implementation of and adherence to the
program developed pursuant to this Article.
ARTICLE V
COMMERCIAL REAL ESTATE
CONCENTRATION RISK MANAGEMENT
(1) Within
ninety (90) days, the Board shall review, revise, and thereafter
ensure Bank adherence to a written commercial real estate (CRE)
concentration risk management program consistent with OCC Bulletin
2006-46. An acceptable program shall include, but not necessarily
be limited to, the following:
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Ongoing risk
assessments to identify potential CRE concentrations in the
portfolio, including exposures to similar or interrelated groups or
borrowers;
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Board and
management oversight of CRE concentrations, to include:
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policy
guidelines and an overall CRE lending strategy, including actions
required when the Bank approaches the limits of its CRE
guidelines;
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procedures and
controls to effectively adhere to and monitor compliance with the
Bank's lending policies and strategies;
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regular review
of information and reports that identify, analyze, and quantify the
nature and level of risk presented by CRE concentrations;
and
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periodic review
and approval of CRE risk exposure limits;
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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;
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Management
information systems, to provide sufficient timely information to
management to identify, measure, monitor, and manage CRE
concentration risk;
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Periodic market
analysis, to provide management and the Board with information to
assess whether the CRE lending strategy and policies continue to be
appropriate in light of changes in CRE market
conditions;
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Credit
underwriting standards for CRE, to include:
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maximum loan
amount by type of property;
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loan-to-value
limits by property type;
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requirements
for feasibility studies and s
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