Consent Order  Sage Bank

Date:	12/19/2014
Organization:	Division of Banks
Docket Number:	FDIC-14-0397b
Location:	Lowell, MA

Sage Bank, Lowell, MA - Consent Order

FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D.C.

and

COMMONWEALTH OF MASSACHUSETTS
DIVISION OF BANKS
BOSTON, MASSACHUSETTS

CONSENT ORDER

FDIC-14-0397b

In the Matter of

SAGE BANK
LOWELL, MASSACHUSETTS

(Insured State Nonmember Bank)

The Federal Deposit Insurance Corporation (“FDIC”) is the appropriate Federal banking agency for Sage Bank, Lowell, Massachusetts (“Bank”), under section 3(q) of the Federal Deposit Insurance Act (“FDI Act”), 12 U.S.C. § 1813(q), and the Commonwealth of Massachusetts Division of Banks ("Division") is the appropriate State banking agency for the Bank under the Massachusetts General Laws (“M.G.L.”).

The Bank, by and through its duly elected and acting Board of Directors (“Board”), has executed a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER (“CONSENT AGREEMENT”), dated December 18, 2014, that is accepted by the FDIC and the Division.  With the CONSENT AGREEMENT, the Bank has consented, without admitting or denying any charges of unsafe or unsound banking practices or violations of law or regulation relating to weaknesses in management, liquidity, earnings, and capital, to the issuance of this Consent Order (“ORDER”) by the FDIC and the Division.

Having determined that the requirements for issuance of an order under 12 U.S.C.  § 1818(b) and under M.G.L. Chapters 167 and 170 have been satisfied, the FDIC and the Division hereby order that:

MANAGEMENT AND BOARD OF DIRECTORS

1.   (a) The Bank shall:  (i) have and retain qualified management; (ii) have a Board that functions effectively and fulfills its responsibilities, including responsibilities concerning management oversight, strategic direction, and audit; and (iii) have an organizational structure that establishes clear lines of authority and responsibility for monitoring adherence to established policies.  At a minimum, the Bank’s  management shall include:  (i) a chief executive officer with proven ability in managing a bank of comparable size and complexity; (ii) a secondary mortgage market officer with an appropriate level of experience and ability in managing mortgage banking operations comparable in volume and complexity of the Bank's mortgage banking activities;  (iii) a senior lending officer with an appropriate level of lending, collection, and loan supervision experience for the type and quality of the Bank's loan portfolio; and (iv) a chief financial officer with demonstrated ability in all financial areas including, but not limited to, accounting, regulatory reporting, budgeting and planning, management of the investment function, liquidity management, and interest rate risk management.  The Board shall provide the necessary written authority to management to implement the provisions of this ORDER.

      (b) The Bank’s management and Board shall be assessed, in accordance with the subparagraphs below, on their ability to:

            (i)  comply with the requirements of this ORDER;

            (ii) operate the Bank in a safe and sound manner;

            (iii)      comply with applicable laws, rules, and regulations; and

            (iv)      restore all aspects of the Bank to a safe and sound condition.

      (c) The Bank, with a view to meeting the requirements of subparagraphs (a) and (b), shall make appropriate changes to management and the Board (including its practices and committees) by developing and implementing a written plan (“Management Plan”) that:  (i) is based on a written report setting out an analysis and assessment of the Bank's management and directorate needs (“Management Report”) prepared by a qualified,  experienced and independent third party banking consultant (“Consultant”); and (ii) is prepared in conformity with the requirements specified by the provisions of this Paragraph 1.  

(d) (i) Within 60 days from the effective date of this ORDER, the Bank shall retain a Consultant who must be acceptable to the FDIC’s Area Director for the Boston Area Office (“Area Director”) and the Massachusetts Commissioner of Banks (“Commissioner”) and who will prepare the Management Report, which conforms to the requirements of this Paragraph 1, for the purpose of providing:  (i) qualified management for the Bank, and (ii) an effective Board that fulfills its responsibilities.

            (ii)  Within 30 days from the effective date of this ORDER, the Bank shall provide the Area Director and the Commissioner with a copy of the proposed engagement letter or contract with the Consultant for non-objection or comment before it is executed.   

      (e)  The contract or engagement letter with the Consultant shall include, at a minimum:

1. 1. a description of the work to be performed under the contract or engagement letter, the fees for each significant element of the engagement, and the aggregate fee;
   2. the responsibilities of the firm or individual;
   3. identification of the professional standards covering the work to be performed;
   4. identification of the specific procedures to be used when carrying out the work to be performed;
   5. the qualifications of the Consultant and the Consultant’s employee(s) who are to perform the work;
   6. the time frame for completion of the work;
   7. any restrictions on the use of the reported findings;
   8. a provision for unrestricted examiner access to work papers; and
   9. a certification that the firm or individual is not affiliated in any manner with the Bank.

      (f)  Within 90 days from the effective date of this ORDER, the Bank must obtain the Management Report.  At a minimum, the Management Report must:

1. 1. Identify the type and number of officer positions needed to manage and supervise the affairs of the Bank, detailing any vacancies or additional needs and giving appropriate consideration to the size and complexity of the Bank;
   2. Identify the type and number of staff positions needed to carry out the Bank's strategic plan, detailing any vacancies or additional needs;
   3. Present a clear and concise description of the relevant knowledge, skills, abilities, and experience necessary for each position, including delegations of authority and performance objectives;
   4. Identify training and development needs;
   5. Identify and address Bank committees needed to provide guidance and oversight to management;
   6. Evaluate the current and past performance of all existing Bank officers, including executive officers and staff members, indicating whether the individuals are competent and qualified to perform present and anticipated duties, adhere to the Bank's established policies and practices, and operate the Bank in a safe and sound manner;
   7. Include an assessment of individual Board member qualifications and skills compared to necessary qualifications and skills to engage in effective oversight and supervision of the Bank’s operations;
   8. Identify issues/matters that might be interfering with the ability of the Board to operate effectively;
   9. Include an assessment of the Board committees to ensure members are knowledgeable about areas delegated to the respective committees;
   10. Identify and consider any anticipated changes in the Board’s membership that are reasonably foreseeable; and
   11. Set out recommendations to correct or eliminate any identified weaknesses in the supervision or organizational structure of the Bank.

      (g)  Within 60 days from the Bank’s receipt of the Management Report, the Bank shall: (i) formulate the Management Plan and (ii) submit it to the Area Director and the Commissioner for non-objection or comment, as addressed further in subparagraph (i). 

      (h)  The Management Plan, at a minimum, shall:

1. 1. incorporate the findings of the Management Report;
   2. contain a recitation of the recommendations included in the Management Report, a plan of action to respond to each recommendation, identification of the Bank directors and officers (or committees thereof) with responsibility for taking such actions, and a deadline/time frame for completing each action;
   3. include provisions to implement necessary training and development for all employees;
   4. establish and require implementation of procedures to periodically review and update the Management Plan, as well as periodically review and assess the performance of each officer and staff member; and
   5. contain a management succession plan that appropriately addresses the management needs of the Bank.       

      (i)   By the deadline specified in subparagraph (g), the Management Plan (together with a copy of the Management Report) shall be submitted to the Area Director and the Commissioner for non-objection or comment.  Within 30 days from receipt of non-objection or any comments from the Area Director and the Commissioner, and after incorporation and adoption of all comments, the Board shall approve the Management Plan, which approval shall be recorded in the minutes of the Board meeting.  Thereafter, the Bank shall implement and fully comply with the Management Plan.

LIQUIDITY AND FUNDS MANAGEMENT

 

2.   (a) The Bank shall maintain an adequate level of liquidity and shall manage its funding and liquidity risk in a safe and sound manner that conforms to all applicable laws and regulations (including 12 C.F.R. § 337.6) and is consistent with all applicable regulatory guidance, including the Interagency Policy Statement on Funding and Liquidity Risk Management (distributed by FDIC FIL-13-2010), which supplements the FDIC’s guidance on Liquidity Risk Management (distributed by FIL-84-2008).  

      (b)  Within 60 days from the effective date of this ORDER, the Bank shall: (i) develop a written liquidity and funds management plan to strengthen and maintain adequate funds to meet the Bank's liquidity needs ("Liquidity Plan"); (ii) obtain Board approval of the Liquidity Plan, which approval shall be recorded in the minutes of the Board meeting; (iii) implement the Board-approved Liquidity Plan; and (iv) submit the Board-approved Liquidity Plan to the Area Director and the Commissioner for Plan for comment or non-objection, as addressed further in subparagraph (d).  

      (c) The Liquidity Plan shall include, at a minimum, provisions that:

1. 1. provide a statement of the Bank's long-term and short-term liquidity needs and plans for ensuring that such needs are met;
   2. provide for a quarterly review of the Bank's deposit structure, including the volume and trend of total deposits and the volume and trend of the various types of deposits offered, the maturity distribution of time deposits, rates being paid on each type of deposit, rates being paid by trade area competition, caps on listing service deposits, large time deposits, public funds, out-of-area deposits, and any other information needed;
   3. address the means by which the Bank will seek to reduce its reliance on non-core funding and high cost rate-sensitive deposits;
   4. identify the sources and uses of borrowed and volatile funds;
   5. identify back-up lines of credit that would allow the Bank to borrow funds to meet depositor demands if the Bank's other provisions for liquidity proved to be inadequate;
   6. provide for the retention of securities and/or other identified categories of investments that can be liquidated within one day in amounts sufficient (as a percentage of the Bank's total assets) to ensure the maintenance of the Bank's liquidity posture at a level consistent with short- and long-term liquidity objectives;
   7. define contingency plans by identifying alternative courses of action designed to meet the Bank's liquidity needs;
   8. address the use of borrowings (i.e., seasonal credit needs, match funding mortgage loans) and provide for reasonable maturities commensurate with the use of the borrowed funds; address concentration of funding sources; and address pricing and collateral requirements with specific allowable funding channels (i.e., brokered deposits, internet deposits, Fed funds purchased and other correspondent borrowings); and
   9. comply with the regulatory guidance referenced in subparagraph (a) (see FIL-84-2008 and FIL-13-2010).

      (d) The Board-approved Liquidity Plan shall be submitted to the Area Director and the Commissioner for comment or non-objection, as provided by subparagraph (b).  Within 30 days from receipt of any comments from the Area Director and the Commissioner, the Bank shall:  (i) incorporate and adopt all such comments into the Liquidity Plan; (ii) obtain Board approval of the Liquidity Plan as so revised, which approval shall be recorded in the minutes of the Board meeting; and (iii) implement and fully comply with such revised Liquidity Plan.  

STRATEGIC PLAN

 

3.   (a)  Within 90 days of the effective date of this ORDER, the Bank shall:

1. 1. develop a new (or revise its existing) written strategic plan ("Strategic Plan"), which must be supported by an operating budget and consisting of goals and strategies, consistent with sound banking practices;
   2. obtain Board approval of the Strategic Plan, which approval shall be recorded in the minutes of the Board meeting;
   3. implement the Strategic Plan; and
   4. submit the Strategic Plan to the Area Director and the Commissioner for comment or non-objection, as addressed further in subparagraph (c).

      (b)  The Strategic Plan shall:  contain an assessment of the Bank's current financial condition and market area; a description of the operating assumptions that form the basis for major projected income and expense components; and take into account the other requirements, actions and restrictions set out in this ORDER.  The Strategic Plan also shall include, at a minimum:

1. 1. identification of the major areas in and means by which the Bank will seek to improve operating performance;
   2. specific goals to improve the net interest margin and reduce discretionary expenses,
   3. financial goals, including pro forma statements for asset growth, mortgage banking activity, capital adequacy, and earnings; and
   4. coordination of the Bank's loan, investment, funds management, and operating policies, profit and budget plan, and ALLL methodology with the Strategic Plan.

      (c)  The Board-approved Strategic Plan shall be submitted to the Area Director and the Commissioner for comment or non-objection, as provided by subparagraph (a).  Within 30 days from receipt of any comments or non-objection from the Area Director and the Commissioner, the Bank shall:  (i) incorporate and adopt all such comments into the Strategic Plan; (ii) obtain Board approval of the Strategic Plan as revised, which approval shall be recorded in the minutes of the Board meeting; and (iii) implement and fully comply with such revised Strategic Plan.

      (d)   By no later than 30 days prior to the end of each calendar year, the Strategic Plan required by this ORDER shall be revised and such revised Strategic Plan shall be approved by the Board, which approval shall be recorded in the minutes of the Board meeting.  Thereafter, the Bank shall implement and adhere to the revised Strategic Plan.   The Bank shall submit the Board-approved revised Strategic Plan to the Area Director and the Commissioner with the appropriate Progress Report required by this ORDER. 

 

PROFIT AND BUDGET PLAN

4.   (a) Within 90 days of the effective date of this ORDER the Bank shall: 

1. 1. formulate and/or revise a written profit and budget plan ("Profit Plan") consisting of realistic goals and strategies, consistent with sound banking practices, and taking into account the Bank's other written plans, policies, or other actions as required by this ORDER;
   2. obtain Board approval of the Profit Plan, which approval shall be recorded in the minutes of the Board meeting;
   3. implement the Profit Plan; and
   4. submit the Profit Plan to the Area Director and the Commissioner for comment or non-objection, as addressed further in subparagraph (c).

      (b) The Profit Plan, at a minimum, shall include:

1. 1. a description of the operating assumptions that form the basis for, and adequately support, material projected revenue and expense components;
   2. specific goals to maintain appropriate provisions to the allowance for loan and lease losses (“ALLL”);
   3. realistic and comprehensive budgets for all categories of income and expense;
   4. an executive compensation plan, addressing any and all salaries, bonuses and other benefits of every kind or nature whatsoever, both current and deferred, whether paid directly or indirectly, which plan incorporates qualitative as well as profitability performance standards for the Bank's senior executive officers (within the meaning of 12 C.F.R. § 303.101(b);
   5. a budget review process to monitor the revenue and expenses of the Bank whereby actual performance is compared against budgetary projections not less than quarterly; and
   6. a requirement for the recording of the results of the budget review and any actions taken by the Bank as a result of the budget review in the Board minutes.

      (c) Within 30 days from receipt of any comments or non-objection from the Area Director and the Commissioner:  (i) the Bank shall incorporate and adopt all such comments into the Profit Plan; (ii) the Board shall review and approve the Profit Plan as so revised, which approval shall be recorded in the minutes of the Board meeting; and (iii) the Bank shall implement and fully comply with the revised Profit Plan.

      (d)  Within 45 days following the end of each calendar quarter thereafter the Board shall: (i) evaluate the Bank's actual performance in relation to the Profit Plan and (ii) record the results of the evaluation and note any actions taken by the Bank in the minutes of the Board meeting at which such evaluation is undertaken.  The Bank shall submit copies of the most recent Board evaluations of performance with the Progress Reports required by this ORDER.

      (e)  By no later than 15 days prior to the end of each calendar year, the Profit Plan shall be revised and such revised Profit Plan shall be approved by the Board, which approval shall be recorded in the minutes of the Board meeting.  Thereafter, the Bank shall implement and adhere to the revised Profit Plan.   The Bank shall submit the Board-approved revised Profit Plan to the Area Director and the Commissioner with the appropriate Progress Report required by this ORDER.

CAPITAL

5.   (a) The Bank shall:  (i) immediately take appropriate actions, consistent with prudent banking practices, to prevent its capital levels (as defined in applicable FDIC regulations at 12 C.F.R. Parts 324 and 325) from dropping below the levels reported in the Bank’s Call Report for the quarter ended June 30, 2014; (ii) increase its capital levels each quarter until it reaches, by December 31, 2015 the capital levels set out below; and (iii) thereafter meet and maintain such minimum capital levels, after establishing and maintaining an appropriate ALLL that conforms to all applicable FDIC guidance.  The minimum capital levels to be achieved and thereafter maintained are:

1. Tier 1 Leverage Capital at least equal to 8.0% percent of total assets;
2. Tier 1 Risk-Based Capital at least equal to 11.0% percent of total risk-weighted assets; and
3. Total Risk-Based Capital at least equal to 11.0% percent of total risk-weighted assets.

      (b)  For purposes of this ORDER, all terms relating to capital shall have the meanings and be calculated in accordance with the applicable FDIC's Rules and Regulations concerning Capital Adequacy/Capital Maintenance (currently at12 C.F.R. Parts 324 and 325), and the Bank shall comply with all applicable regulatory guidance on capital, including the FDIC's Statement of Policy on Risk-Based Capital found in Appendix A to Part 325 of the FDIC's Rules and Regulations, 12 C.F.R. Part 325, App. A.

      (c)  Within 90 days of the effective date of this ORDER, the Bank shall:

1. 1. develop a written plan (“Capital Plan”)  detailing the manner in which the Bank will meet and maintain the capital levels required by this Paragraph 5;
   2. obtain Board approval of the Capital Plan, which approval shall be recorded in the minutes of the Board meeting; and
   3. submit the Capital Plan to the Area Director and the Commissioner for non-objection or comment, as addressed further in subparagraph (e).   

      (d) At a minimum, the Capital Plan shall include:

            (i)     specific benchmark Tier 1 Leverage and Risk-Based Capital Ratios to be met at each calendar quarter end until the capital levels required under this ORDER are achieved;

            (ii)    specific plans to achieve the capital levels required under this ORDER;

            (ii)    projections for asset growth and capital requirements, and such projections shall be based upon a detailed analysis of the Bank's current and projected assets, liabilities, earnings, fixed assets, and off-balance sheet activities, each of which shall be consistent with the Bank's strategic business plan;

            (iii)   projections for the amount and timing of the capital necessary to meet the Bank's current and future needs;

            (iv)   the primary source(s) from which the Bank will strengthen its capital to meet the Bank's needs;

            (v)    contingency plans that identify alternative sources of capital should the primary source(s) under (v) above not be available.

      (e) By the deadline specified in subparagraph (c), the Board-approved Capital Plan shall be submitted to the Area Director and the Commissioner for non-objection or comment.  Within 30 days from receipt of non-objection or comments from the Area Director and the Commissioner:  (i) the Bank shall incorporate and adopt all such comments into the Capital Plan; (ii) the Board shall approve such revised Capital Plan (the “Definitive Capital Plan”), which approval shall be recorded in the minutes of the Board meeting; and (iii) the Bank shall implement and fully comply with such Definitive Capital Plan.  

      (f)  In the event any capital ratio falls below the minimum required by the Definitive Capital Plan (a “Capital Event”), the Bank shall immediately provide written notification to the Area Director and the Commissioner and, within 30 days of such Capital Event, shall:

(i)  Increase capital in an amount sufficient to comply with the ratios established in the Definitive Capital Plan and this ORDER; or

(ii) Develop and submit to the Area Director and the Commissioner a revised Capital Plan ("Revised Capital Plan") that (A) describes the primary means and timing by which the Bank shall increase its capital ratios up to or in excess of the minimum requirements set forth in this ORDER and (B) includes contingency plan that considers the sale, merger, or liquidation of the Bank.  The Revised Capital Plan must contain realistic goals and expectations.

      (f)  Any Revised Capital Plan required by subparagraph (f), shall be submitted to the Area Director and the Commissioner for non-objection or comment by the deadline specified in the preceding subparagraph.   Within 30 days from receipt of non-objection or any comments from the Area Director and the Commissioner: (i) the Bank shall incorporate and adopt all such comments into the Revised Capital Plan; (ii) the Board shall review and approve the Revised Capital Plan as so revised, which approval shall be recorded in the minutes of the Board meeting; and (iii) the Bank shall implement and fully comply with the Revised Capital Plan.   

      (g) On no less than a monthly basis, the Board shall review the Bank's adherence to the Definitive Capital Plan, and where appropriate any Revised Capital Plan, and a record of each such review shall be recorded in the minutes of the Board meeting.  Copies of the reviews and updates shall be submitted to the Area Director and the Commissioner as part of the Progress Reports required by this ORDER.

DIVIDEND RESTRICTION

6.   The Bank shall not declare or pay any dividend without the prior written consent of the Area Director and the Commissioner.

GROWTH RESTRICTIONS

 

7.   (a)  The Bank shall not increase its Adjusted Total Assets:  (i) by more than 5 percent during any consecutive three-month period, except as otherwise permitted under subparagraph (b); and (ii) by more than 10 percent annually.  For the purposes of this Paragraph 7: "Adjusted Total Assets" means Total Assets less Loans Held for Sale; “Total Assets” has the meaning set out in the FFIEC's Instructions for Consolidated Reports of Condition and Income (“Call Reports”); and “Loans Held for Sale” means the mortgage loan assets reported in item 4 of Call Report Schedule RC-P (concerning 1-4 Family Residential Mortgage Banking Activities).  

      (b) Notwithstanding the 5 percent growth restriction in subparagraph (a)(i), the Bank’s Adjusted Total Assets may grow at such higher growth rate as may be specified in a written asset growth plan (“Growth Plan”) implemented by the Bank following its receipt of prior written non-objection from the Area Director and Commissioner.  The Bank may seek regulatory non-objection of a Growth Plan in accordance with subparagraph (d). 

      (c) (i)  The Bank shall not increase the dollar volume of Secondary Market Mortgage Loan Originations by more than 10% during any consecutive three-month period except as may be provided in a Board-approved written mortgage operations expansion plan ("Expansion Plan") implemented by the Bank following its receipt of written non-objection from the Area Director and the Commissioner.   The Bank may seek regulatory non-objection of an Expansion Plan in accordance with subparagraph (d).  For the purposes of this Paragraph 7: “Secondary Market Mortgage Loan Originations” means mortgage loan assets reported in items 1 and 2 of Call Report Schedule RC-P.

2. An Expansion Plan, at a minimum, shall specify:  (A) the number, location, and projected volume of loan production offices; (B) number and location of mortgage loan originators; and (C) projected dollar volume of quarterly Secondary Mortgage Loan Originations, average Loans Held for Sale, and quarterly loan sales.

      (d)  Prior to implementation of a Growth Plan and/or an Expansion Plan, the Bank shall:  (i) submit the plan(s) to the Area Director and the Commissioner for non-objection or comments; (ii) incorporate and adopt any and all comments from the Area Director and the Commissioner into the plan(s); and (iii) obtain Board approval of the plan(s) as so revised, which approval shall be recorded in the minutes of the Board meeting.  Thereafter, the Bank shall implement and adhere to the Board-approved plan(s).  

AUDIT PROGRAM

8.   (a) The Bank is required to have an effective system of internal controls and an effective independent internal audit function. 

      (b)  Within 45 days of the effective date of this ORDER, the Bank, shall make and implement appropriate changes to its audit program and take other actions, as appropriate, in order to (i) to bring the Bank compliance with the Interagency Policy Statement on Internal Audit Function and its Outsourcing (distributed by FDIC FIL-21-2003) and (ii) to ensure that its audit program, including its implementation, conforms to the standards for internal audit systems set out in 12 C.F.R. Part 364, Appendix A.  Among other things the Bank personnel directing and/or performing the review of internal controls of a department (including any division or area) shall not also be responsible for managing or operating those controls.

      (c)  Within 45 days of the effective date this ORDER, changes made to the Bank's audit program for the purpose of complying with this Paragraph 8 shall: (i) be approved by the Board, which approval shall be recorded in the minutes of the Board meeting and (ii) be submitted to the Area Director and the Commissioner for non-objection or comments.

      (d) Within 30 days from receipt of any comments or non-objection from the Area Director and the Commissioner: (i) the Bank shall incorporate and adopt all such comments into the audit program; (ii) the Board shall review and approve the audit program as so revised, which approval shall be recorded in the minutes of the Board meeting; and (iii) the Bank shall implement and adhere to the audit program as so revised.

BROKERED DEPOSITS

9. (a)  The Bank shall not accept, renew, or rollover any “brokered deposit,” as defined at12 C.F.R. § 337.6(a)(2), unless and until the Bank has applied for and been granted a waiver by the Area Director (or other appropriate FDIC official) in accordance with the provisions of 12 C.F.R. §§ 337.6(b)(2) and 337.6(c).

      (b) The Bank shall comply with the restrictions on the effective yields on deposits described in section 337.6 of the FDIC's Rules and Regulations, 12 C.F.R. § 337.6.

DIRECTOR AND/OR SENIOR EXECUTIVE OFFICER CHANGES

10.  The Bank shall comply with the requirements of 12 C.F.R. § 303.102.  The Bank shall provide written notice to the Area Director and the Commissioner of any additions, resignations, or terminations of any members of its Board or any of its "senior executive officers" (as that term is defined in 12 C.F.R. § 303.101(b)) within 10 days of the event.   Any notification required by this Paragraph shall include a description of the background and experience of any proposed replacement personnel and must be received at least 30 days prior to the individual(s) assuming the new position(s).   

RESTRICTIONS PURSUANT TO 12 C.F.R. PART 359

11.  The Bank shall comply with the requirements of 12 C.F.R. Part 359, and, therefore, except with the prior written consent of the Area Director (or other appropriate FDIC official), the Bank shall not make (or enter into an agreement to make) a prohibited “golden parachute payment” or a “prohibited indemnification payment” (as those terms are defined at 12 C.F.R. § 359.1).

PROGRESS REPORTS

12. Within 45 days from the end of each calendar quarter following the effective date of this ORDER, the Bank shall furnish to the Area Director and the Commissioner written progress reports (“Progress Reports”) detailing the form, manner, and results of any actions taken to secure compliance with this ORDER.  All Progress Reports and other written responses to this ORDER shall be reviewed by the Board and made a part of the Board minutes.

GENERAL PROVISIONS; ORDER EFFECTIVE

 

13.  The provisions of this ORDER shall not bar, estop, or otherwise prevent the FDIC, the Division, or any other federal or state agency or department from taking any other action against the Bank or any of the Bank’s current or former institution-affiliated parties.

14.  The provisions of this ORDER shall be binding upon the Bank, its institution-affiliated parties, and any successors and assigns thereof.

15.  This ORDER shall be effective on the date of issuance.

16.  The provisions of this ORDER shall remain effective and enforceable except to the extent that and until such time as any provision has been modified, terminated, suspended, or set aside by joint action of the FDIC and the Division.

Issued on December 19, 2014

By:

Gregory P. Bottone, Acting Area Director
Boston Area Office
Federal Deposit Insurance Corporation
(Pursuant to Delegated Authority)

By:

Hon. David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts
Division of Banks

Consent Order was terminated effective December 13, 2016, and replaced by Order FDIC-16-0247b