EXHIBIT 10.24

FEDERAL DEPOSIT INSURANCE CORPORATION

WASHINGTON, D.C.

 

    )    In the Matter of   )      )            STIPULATION TO THE
BANK OF FLORIDA - SOUTHEAST       )            ISSUANCE OF A CONSENT ORDER FORT
LAUDERDALE, FLORIDA   )      )      )            FDIC-09-587b (Insured State
Nonmember Bank)   )        )   

Subject to the acceptance of this STIPULATION TO THE ISSUANCE OF A CONSENT ORDER
(“CONSENT AGREEMENT”) by the Federal Deposit Insurance Corporation (“FDIC”), it
is hereby stipulated and agreed by and between a representative of the Legal
Division of the FDIC and Bank of Florida – Southeast, Fort Lauderdale, Florida
(“Bank”), through its board of directors, as follows.

1. The Bank has been advised of its right to receive a written Notice of Charges
and of Hearing (“Notice”) detailing the unsafe or unsound banking practices
alleged to have been committed by the Bank 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 the FDIC’s Rules of Practice and Procedure
(“Rules”), 12 C.F.R. Part 308, and has waived those rights.

2. The Bank, solely for the purpose of this proceeding and without admitting or
denying any of the alleged charges of unsafe or unsound banking practices,
hereby consents and agrees to the issuance of a CONSENT ORDER (“ORDER”) by the
FDIC in the form attached hereto. The Bank further stipulates and agrees that
such ORDER shall become effective immediately after its issuance by the FDIC and
be fully enforceable by the FDIC pursuant to the provisions of section 8(i)(1)
of the Act, 12 U.S.C. § 18l8(i)(1), and the Rules, subject only to the
conditions set forth in paragraph 3 of this CONSENT AGREEMENT.

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3. In the event the FDIC accepts this CONSENT AGREEMENT and issues the ORDER, it
is agreed that no action to enforce said ORDER in the United States District
Court will be taken by the FDIC unless the Bank or any “institution-affiliated
party”, as such term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u),
has violated or is about to violate any provision of the ORDER.

4. The Bank hereby waives:

 

  (a) the receipt of a written Notice;

 

  (b) all defenses to the charges to be set forth in the Notice;

 

  (c) a hearing for the purpose of taking evidence regarding the allegations to
be set forth in the Notice;

 

  (d) the filing of Proposed Findings of Fact and Conclusions of Law;

 

  (e) a Recommended Decision of an Administrative Law Judge; and

 

  (f) exceptions and briefs with respect to such Recommended Decision.

Dated: May 19, 2010

 

FEDERAL DEPOSIT INSURANCE CORPORATION
LEGAL DIVISION BY: /s/ Barbara J. Lukes

Barbara J. Lukes

Counsel

 

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BANK OF FLORIDA - SOUTHEAST

FORT LAUDERDALE, FLORIDA

BY: /s/ Charles K. Cross Charles K. Cross /s/ Jorge Garcia Jorge Garcia /s/
Wayne Gilmore Wayne Gilmore /s/ Steven W. Hudson Steven W. Hudson /s/ Richard
Moore Richard Moore /s/ Ramon A. Rodriguez Ramon A. Rodriguez    Rolando Montoya
/s/ Terry W. Stiles Terry W. Stiles

THE BOARD OF DIRECTORS

 

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FEDERAL DEPOSIT INSURANCE CORPORATION

WASHINGTON, D.C.

 

    )    In the Matter of   )      )    BANK OF FLORIDA - SOUTHEAST       )   
FORT LAUDERDALE, FLORIDA   )            CONSENT ORDER   )      )    (Insured
State Nonmember Bank)   )            Docket No. FDIC-09-587b   )      )      )
       )   

The Federal Deposit Insurance Corporation (“FDIC”) is the appropriate Federal
banking agency for Bank of Florida - Southeast, Fort Lauderdale, Florida
(“Bank”), under 12 U.S.C. § 1813(q).

The Bank, by and through its duly elected and acting Board of Directors
(“Board”), has executed a “Stipulation to the Issuance of a Consent Order”
(“Stipulation”), dated May 19, 2010, that is accepted by the FDIC. With the
Stipulation, the Bank has consented, without admitting or denying any charges of
unsafe or unsound banking practices relating to weaknesses in capital, earnings,
liquidity, and asset quality, to the issuance of this Consent Order (“ORDER”) by
the FDIC.

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IT IS FURTHER ORDERED, that the Bank, its institution-affiliated parties, and
its successors and assigns take affirmative action as follows:

 

1. BOARD OF DIRECTORS

(a) As of the effective date of this ORDER, the Board shall increase its
participation in the affairs of the Bank, assuming full responsibility for the
approval of sound policies and objectives and for the supervision of all of the
Bank’s activities, consistent with the role and expertise commonly expected for
directors of banks of comparable size. The Board shall prepare in advance and
follow a detailed written agenda for each meeting, including consideration of
the actions of any committees. Nothing in the foregoing sentences shall preclude
the Board from considering matters other than those contained in the agenda.
This participation shall include meetings to be held no less frequently than
monthly at which, at a minimum, the following areas shall be reviewed and
approved; reports of income and expenses; new, overdue, renewal, insider,
charged-off, and recovered loans; investment activity; operating policies; and
individual committee actions. Board minutes shall document these reviews and
approvals, including the names of any dissenting directors.

(b) Within 30 days from the effective date of this ORDER, the Board shall have
in place a program that will provide for monitoring of the Bank’s compliance
with this ORDER. Following the adoption of the program, the Board shall review
the Bank’s compliance with this ORDER and record its review in the minutes of
each regularly scheduled Board meeting. Establishment of this committee does not
in any way diminish the responsibility of the entire Board to ensure compliance
with the provisions of this ORDER.

 

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2. MANAGEMENT

(a) During the life of this ORDER, the Bank shall have and retain qualified
management with the qualifications and experience commensurate with assigned
duties and responsibilities at the Bank. Each member of management shall be
provided appropriate written authority from the Bank’s Board to implement the
provisions of this ORDER.

(b) The qualifications of management shall be assessed on its 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 and regulations; and

(iv) restore all aspects of the Bank to a safe and sound condition, including,
but not limited to, asset quality, capital adequacy, earnings, management
effectiveness, risk management, liquidity, and sensitivity to market risk.

 

3. CAPITAL

(a) The Bank shall have capital at a level sufficient to restore the Bank to an
“adequately capitalized” capital category as defined in 12 C.F.R. §
325.103(b)(2).

 

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(b) Within 30 days of the effective date of this ORDER, the Bank shall submit to
the Regional Director of the FDIC’s Atlanta Regional Office (“Regional
Director”) a plan to achieve and maintain the following minimum capital levels
as defined in 12 C.F.R. Part 325, after establishing an adequate allowance for
loan and lease losses (“ALLL”):

(i) Tier 1 capital at least equal to eight (8.0%) percent of total assets;

and

(ii) Total risk-based capital at least equal to twelve (12.0%) percent of total
risk-weighted assets.

(c) Within 30 days of the last day of each calendar quarter, the Bank shall
determine, from its Reports of Condition and Income, its capital ratios for that
calendar quarter. If any capital measure falls below the established minimum,
within 30 days of such required determination of capital ratios, the Bank shall
submit a written plan to the FDIC, describing the means and timing by which the
Bank shall increase such ratios up to or in excess of the established minimum.

 

4. ALLOWANCE FOR LOAN AND LEASE LOSSES

Within 30 days from the effective date of this ORDER, the Board shall review the
adequacy of the ALLL and establish a comprehensive policy for determining the
adequacy of the ALLL. For the purpose of this determination, the adequacy of the
ALLL shall be determined after the charge-off of all loans or other items
classified “Loss”. The policy shall provide for a review of the ALLL at least
once each calendar quarter. Said review shall be completed in time to properly
report the ALLL in the quarterly Reports of Condition and Income. The review
shall focus on the results of the Bank’s internal loan review, loan and lease
loss experience, trends of delinquent and non-accrual loans, an estimate of
potential loss exposure of significant credits, concentrations of credit, and
present and prospective economic conditions. A deficiency in the ALLL shall be
remedied in the calendar quarter it is discovered, prior to submitting the
Reports of Condition and Income, by a charge to current operating earnings. The
minutes of the Board meeting at which such review is undertaken shall indicate
the results of the review. The Bank’s policy for determining the adequacy of the
ALLL and its implementation shall be satisfactory to the Regional Director.

 

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5. REDUCTION OF CLASSIFIED ASSETS

(a) Within 45 days from the effective date of this ORDER, the Bank shall
formulate and implement a written plan to reduce the Bank’s risk exposure in
each asset, or relationship in excess of $500,000 classified Substandard and/or
Doubtful by the FDIC as of February 16, 2010. In developing the plan mandated by
this paragraph, the Bank shall, at a minimum, with respect to each adversely
classified loan or lease, review, analyze, and document the financial position
of the borrower, including source of repayment, repayment ability, and
alternative repayment sources, as well as the value and accessibility of any
pledged or assigned collateral, and any possible actions to improve the Bank’s
collateral.

(b) Additionally, while this ORDER remains in effect, the Bank shall, within 30
days from the receipt of any official Report of Examination of the Bank from the
FDIC or the Florida Office of Financial Regulation, eliminate from its books, by
collection, charge-off, or other proper entries, the remaining balance of any
asset classified “Loss” and 50 percent of the those classified “Doubtful” unless
otherwise approved in writing by the Regional Director.

 

6. REDUCE CONCENTRATIONS OF CREDIT

Within 45 days from the effective date of this ORDER, the Bank shall perform a
risk segmentation analysis with respect to Concentrations of Credit.

 

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Concentrations should be identified by product type, geographic distribution,
underlying collateral or other asset groups, which are considered economically
related and in the aggregate represent a large portion of the Bank’s Tier 1
capital. The Bank shall develop a written plan approved by its Board and
acceptable to the FDIC to systematically reduce any segment of the portfolio
which the FDIC deems to be an undue concentration of credit in relation to the
Bank’s Tier 1 capital. At a minimum the plan must provide for written procedures
for the ongoing measurement and monitoring of the concentrations of credit, and
a limit on concentrations commensurate with the Bank’s capital position, safe
and sound banking practices, and the overall risk profile of the Bank.

 

7. PLAN FOR EXPENSES/PROFITABILITY

(a) Within 60 days from the effective date of this ORDER, the Bank shall
formulate and implement a written profit plan and a realistic, comprehensive
budget for all categories of income and expense. This plan shall be forwarded to
the Regional Director for review and comment and shall address, at a minimum,
the following:

(i) goals and strategies for improving and sustaining the earnings of the Bank;

(ii) the major areas in, and means by which the Bank will seek to improve the
Bank’s operating performance; and

(iii) the operating assumptions that form the basis for, and adequately support,
major projected income and expense components.

(b) Following the end of each calendar quarter, the Board shall evaluate the
Bank’s actual performance in relation to the plan required by this paragraph and
shall record the results of the evaluation, and any actions taken by the Bank in
the minutes of the Board meeting at which such evaluation is undertaken.

 

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8. FUNDS MANAGEMENT PLAN

Within 60 days from the effective date of this ORDER, the Bank shall adopt and
implement a written plan addressing liquidity, contingent funding, and asset
liability management. A copy of the plan shall be submitted to the Regional
Director upon its completion for review and comment. Within 30 days from the
receipt of any comments from the Regional Director, the Bank shall incorporate
those recommended changes. Thereafter, the Bank shall implement and follow the
plan. Annually during the life of this ORDER, the Bank shall review this plan
for adequacy and, based upon such review, shall make appropriate revisions to
the plan that are necessary to strengthen funds management procedures and
maintain adequate provisions to meet the Bank’s liquidity needs.

 

9. ASSET GROWTH LIMITATIONS

During the life of this ORDER, the Bank shall limit asset growth to 10 percent
per annum and in no event shall asset growth result in noncompliance with the
capital maintenance provisions of this ORDER without receiving prior written
approval of the Regional Director.

 

10. RESTRICTIONS ON CERTAIN PAYMENTS

(a) While this ORDER is in effect, the Bank shall not declare or pay dividends
or bonuses without the prior written approval of the Regional Director. All
requests for prior approval shall be received at least 30 days prior to the
proposed dividend or bonus payment declaration date (at least 5 days with
respect to any request filed within the first 30 days after the date of this
ORDER) and shall contain, but not be limited to, an analysis of the impact such
dividend or bonus payment would have on the Bank’s capital, income, and/or
liquidity positions.

 

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(b) During the term of this ORDER, the Bank shall not issue, or make any
distributions of interest, principal or other sums, on subordinated debentures,
if any, without the prior written approval of the Regional Director.

 

11. BROKERED DEPOSITS

(a) Throughout the effective life of this ORDER, the Bank shall not accept,
renew, or rollover any brokered deposit, as defined by 12 C.F.R. § 337.6(a)(2),
unless it is in compliance with the requirements of 12 C.F.R. § 337.6(b),
governing solicitation and acceptance of brokered deposits by insured depository
institutions.

(b) The Bank shall comply with the restrictions on the effective yields on
deposits described in 12 C.F.R. § 337.6.

 

12. DISCLOSURE

Following the effective date of this ORDER, the Bank shall send to its
shareholders or otherwise furnish a description of this ORDER in conjunction
with the Bank’s next shareholder communication and also in conjunction with its
notice or proxy statement preceding the Bank’s next shareholder meeting. The
description shall fully describe the ORDER in all material respects. The
description and any accompanying communication, statement or notice shall be
sent to the FDIC, Division of Supervision and Consumer Protection, Accounting
and Securities Disclosure Section, 550 17th Street, N.W., Room F-6066,
Washington, D.C. 20429, at least fifteen (15) days prior to dissemination to
shareholders. Any changes requested to be made by the FDIC shall be made prior
to dissemination of the description, communication, notice, or statement.

 

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13. PROGRESS REPORTS

Within 30 days from the end of the first quarter following the effective date of
this ORDER, and within 15 days of the end of each quarter thereafter, the Bank
shall furnish written progress reports to the Regional Director detailing the
form and manner of any actions taken to secure compliance with this ORDER and
the results thereof. Such reports shall include a copy of the Bank’s Reports of
Condition and Income. Such reports may be discontinued when the corrections
required by this ORDER have been accomplished and the Regional Director has
released the Bank in writing from making further reports. All progress reports
and other written responses to this ORDER shall be reviewed by the Board and
made a part of the minutes of the appropriate Board meeting.

The provisions of this ORDER shall not bar, estop, or otherwise prevent the FDIC
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.

This ORDER shall be effective on the date of issuance.

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

 

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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 the FDIC.

Issued Pursuant to Delegated Authority

 

Dated this 21st day of May, 2010 LOGO [g85444exb13.jpg]

Thomas J. Dujenski

Regional Director

Division of Supervision and Consumer Protection

Atlanta Region

Federal Deposit Insurance Corporation

 

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