Exhibit 10.1

UNITED STATES OF AMERICA

BEFORE THE

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

WASHINGTON, D.C.

 

 

Written Agreement by and between

 

 

Docket No. 10-223-WA/RB-HC

 

CADENCE FINANCIAL CORPORATION

Starkville, Mississippi

   

and

   

FEDERAL RESERVE BANK OF

ST. LOUIS

 

St. Louis, Missouri

 

 

WHEREAS, Cadence Financial Corporation, Starkville, Mississippi (“Cadence”), a
registered bank holding company, owns and controls Cadence Bank, N.A.,
Starkville, Mississippi (the “Bank”), a national bank, and one nonbank
subsidiary;

WHEREAS, it is the common goal of Cadence and the Federal Reserve Bank of St.
Louis (the “Reserve Bank”) to maintain the financial soundness of Cadence so
that Cadence may serve as a source of strength to the Bank;

WHEREAS, Cadence and the Reserve Bank have mutually agreed to enter into this
Written Agreement (the “Agreement”); and

WHEREAS, on November 17, 2010, the board of directors of Cadence, at a duly
constituted meeting, adopted a resolution authorizing and directing Lewis F.
Mallory, Jr. to enter into this Agreement on behalf of Cadence, and consenting
to compliance with each and every provision of this Agreement by Cadence and its
institution-affiliated parties, as defined in

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sections 3(u) and 8(b)(3) of the Federal Deposit Insurance Act, as amended (the
“FDI Act”) (12 U.S.C. §§ 1813(u) and 1818(b)(3)).

NOW, THEREFORE, Cadence and the Reserve Bank agree as follows:

Source of Strength

1. The board of directors of Cadence shall take appropriate steps to fully
utilize Cadence’s financial and managerial resources, pursuant to section
225.4(a) of Regulation Y of the Board of Governors of the Federal Reserve System
(the “Board of Governors”) (12 C.F.R. § 225.4(a)), to serve as a source of
strength to the Bank, including, but not limited to, taking steps to ensure that
the Bank complies with the Consent Order issued by the Office of the Comptroller
of the Currency on May 19, 2010, and any other supervisory action taken by the
Bank’s federal regulator.

Dividends, Distributions, and Other Payments

2. (a) Cadence shall not declare or pay any dividends without the prior written
approval of the Reserve Bank and the Director of the Division of Banking
Supervision and Regulation of the Board of Governors (the “Director”).

(b) Cadence shall not directly or indirectly take dividends or any other form of
payment representing a reduction in capital from the Bank without the prior
written approval of the Reserve Bank.

(c) Cadence and its nonbank subsidiary shall not make any distributions of
interest, principal, or other sums on subordinated debentures or trust preferred
securities without the prior written approval of the Reserve Bank and the
Director.

(d) All requests for prior approval shall be received by the Reserve Bank at
least 30 days prior to the proposed dividend declaration date, proposed
distribution on

 

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subordinated debentures, or required notice of deferral on trust preferred
securities. All requests shall contain, at a minimum, current and projected
information on Cadence’s capital, earnings, and cash flow; the Bank’s capital,
asset quality, earnings, and allowance for loan and lease losses; and
identification of the sources of funds for the proposed payment. For requests to
declare or pay dividends, Cadence must also demonstrate that the requested
declaration or payment of dividends is consistent with the Board of Governors’
Policy Statement on the Payment of Cash Dividends by State Member Banks and Bank
Holding Companies, dated November 14, 1985 (Federal Reserve Regulatory Service,
4-877 at page 4-323).

Debt and Stock Redemption

3. (a) Cadence shall not, directly or indirectly, incur, increase, or guarantee
any debt without the prior written approval of the Reserve Bank. All requests
for prior written approval shall contain, but not be limited to, a statement
regarding the purpose of the debt, the terms of the debt, the planned source(s)
for debt repayment, and an analysis of the cash flow resources available to meet
such debt repayment.

(b) Cadence shall not, directly or indirectly, purchase or redeem any shares of
its stock without the prior written approval of the Reserve Bank.

Capital Plan

4. Within 60 days of this Agreement, Cadence shall submit to the Reserve Bank an
acceptable written plan to maintain sufficient capital at Cadence on a
consolidated basis. The plan shall, at a minimum, address, consider, and
include:

(a) The consolidated organization’s and the Bank’s current and future capital
requirements, including compliance with the Capital Adequacy Guidelines for Bank
Holding Companies: Risk-Based Measure and Tier 1 Leverage Measure, Appendices A
and D of

 

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Regulation Y of the Board of Governors (12 C.F.R. Part 225, App. A and D) and
the applicable capital adequacy guidelines for the Bank issued by the Bank’s
federal regulator;

(b) the adequacy of the Bank’s capital, taking into account the volume of
classified credits, concentrations of credit, allowance for loan and lease
losses, current and projected asset growth, and projected retained earnings;

(c) the source and timing of additional funds necessary to fulfill the
consolidated organization’s and the Bank’s future capital requirements;

(d) supervisory requests for additional capital at the Bank or the requirements
of any supervisory action imposed on the Bank by its federal regulator; and

(e) the requirements of section 225.4(a) of Regulation Y of the Board of
Governors that Cadence serve as a source of strength to the Bank.

5. Cadence shall notify the Reserve Bank, in writing, no more than 45 days after
the end of any quarter in which any of Cadence’s capital ratios fall below the
approved plan’s minimum ratios. Together with the notification, Cadence shall
submit an acceptable written plan that details the steps that Cadence will take
to increase Cadence’s capital ratios to or above the approved plan’s minimums.

Cash Flow Projections

6. Within 60 days of this Agreement, Cadence shall submit to the Reserve Bank a
written statement of Cadence’s planned sources and uses of cash for debt
service, operating expenses, and other purposes (“Cash Flow Projection”) for
2011. Cadence shall submit to the Reserve Bank a Cash Flow Projection for each
calendar year subsequent to 2011 at least one month prior to the beginning of
that calendar year.

 

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Earnings Plan and Budget

7. (a) Within 90 days of this Agreement, Cadence shall submit to the Reserve
Bank a written business plan for 2011 to improve its earnings and overall
condition. The plan, at a minimum, shall provide for or describe:

(i) a realistic and comprehensive budget for 2011, including income statement
and balance sheet projections; and

(ii) a description of the operating assumptions that form the basis for, and
adequately support, major projected income, expense, and balance sheet
components.

(b) During the term of this Agreement, a business plan and budget for each
calendar year subsequent to 2011 shall be submitted to the Reserve Bank at least
30 days prior to the beginning of that calendar year.

Affiliate Transactions

8. (a) Cadence shall take all necessary actions to ensure that the Bank complies
with sections 23A and 23B of the Federal Reserve Act (12 U.S.C. §§ 371c and
371c-1) and Regulation W of the Board of Governors (12 C.F.R. Part 223) in all
transactions between the Bank and its affiliates, including but not limited to
Cadence and its nonbank subsidiary.

(b) Cadence and its nonbank subsidiary shall not cause the Bank to violate any
provision of sections 23A and 23B of the Federal Reserve Act or Regulation W of
the Board of Governors.

Compliance with Laws and Regulations

9. (a) In appointing any new director or senior executive officer, or changing
the responsibilities of any senior executive officer so that the officer would
assume a different senior executive officer position, Cadence shall comply with
the notice provisions of section 32 of the

 

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FDI Act (12 U.S.C. § 1831 i) and Subpart H of Regulation Y of the Board of
Governors (12 C.F.R. §§ 225.71 et seq.).

(b) Cadence shall comply with the restrictions on indemnification and severance
payments of section 18(k) of the FDI Act (12 U.S.C. § 1828(k)) and Part 359 of
the FDIC’s regulations (12 C.F.R. Part 359).

Approval and Implementation of Plan

10. (a) Cadence shall submit a written capital plan that is acceptable to the
Reserve Bank within the applicable time period set forth in paragraph 4 of this
Agreement.

(b) Within 10 days of approval by the Reserve Bank, Cadence shall adopt the
approved capital plan. Upon adoption, Cadence shall promptly implement the
approved plan, and thereafter fully comply with it.

(c) During the term of this Agreement, the approved capital plan shall not be
amended or rescinded without the prior written approval of the Reserve Bank.

Progress Reports

11. Within 45 days after the end of each calendar quarter following the date of
this Agreement, the board of directors shall submit to the Reserve Bank written
progress reports detailing the form and manner of all actions taken to secure
compliance with the provisions of this Agreement and the results thereof, and a
parent company only balance sheet, income statement, and, as applicable, report
of changes in stockholders’ equity.

 

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Communications

12. All communications regarding this Agreement shall be sent to:

 

  (a) Mr. Timothy A. Bosch

Vice President

Federal Reserve Bank of St. Louis

1421 Dr. Martin Luther King Blvd.

St. Louis, Missouri 63106-3716

 

  (b) Mr. Lewis F. Mallory, Jr.

Chairman and Chief Executive Officer

Cadence Financial Corporation

301 East Main Street

P.O. Box 1187

Starkville, Mississippi 39760-1187

Miscellaneous

13. Notwithstanding any provision of this Agreement, the Reserve Bank may, in
its sole discretion, grant written extensions of time to Cadence to comply with
any provision of this Agreement.

14. The provisions of this Agreement shall be binding upon Cadence and its
institution-affiliated parties, in their capacities as such, and their
successors and assigns.

15. Each provision of this Agreement shall remain effective and enforceable
until stayed, modified, terminated, or suspended in writing by the Reserve Bank.

16. The provisions of this Agreement shall not bar, estop, or otherwise prevent
the Board of Governors, the Reserve Bank, or any other federal or state agency
from taking any other action affecting Cadence, the Bank, any nonbank subsidiary
of Cadence, or any of their current or former institution-affiliated parties and
their successors and assigns.

 

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17. Pursuant to section 50 of the FDI Act (12 U.S.C. § 1831aa), this Agreement
is enforceable by the Board of Governors under section 8 of the FDI Act (12
U.S.C. § 1818).

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the 17 day of November, 2010.

 

CADENCE FINANCIAL CORPORATION   FEDERAL RESERVE BANK OF ST. LOUIS By:  

/s/ Lewis F. Mallory, Jr.

  By:  

/s/ Timothy A. Bosch

  Lewis F. Mallory, Jr.     Timothy A. Bosch   Chairman and Chief Executive
Officer     Vice President

 

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