UNITED STATES OF AMERICA
BEFORE THE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D.C.

__________________________________________
Written Agreement by and between

ATLANTIC BANCGROUP,
INC.                                                                                     Docket
No. 09-184-W A/RB-HC
Jacksonville Beach, Florida

and

FEDERAL RESERVE BANK OF
ATLANTA

Atlanta, Georgia
________________________________________

WHEREAS, Atlantic BancGroup, Inc., Jacksonville Beach, Florida ("Atlantic"), a
registered bank holding company, owns and controls Oceanside Bank, Jacksonville
Beach, Florida ("Bank" ), a stale chartered nonmember bank, and a nonbank
subsidiary;
WHEREAS, it is the common goal of Atlantic and the Federal Reserve Bank of
Atlanta (the "Reserve Bank") to maintain the financial soundness of Atlantic so
that Atlantic may serve as a source of strength to the Bank;
WHEREAS, Atlantic and the Reserve Bank have mutually agreed to enter into this
Written Agreement (the "Agreement"); and
WHEREAS, on March 12, 2010, the board of directors of Atlantic, at a duly
constituted meeting, adopted a resolution authorizing and directing Mr. Barry W.
Chandler, President and Chief Executive Officer, to enter into this Agreement on
behalf of Atlantic, and consenting to compliance with each and every provision
of this Agreement by Atlantic and its institution-affiliated parties, as defined
in sections 3(u) and S(b)(3) of the Federal Deposit Insurance Act, as amended
(the "FDI Act") (12 U.S.C. §§ lS13(u) and IS1S(b)(3)).
NOW, THEREFORE, Atlantic and the Reserve Bank agree as follows:

 
 

--------------------------------------------------------------------------------

 

Dividends and Distributions
I.           (a)           Atlantic 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 (the "Director") of the Board of
Governors of the Federal Reserve System (the "Board of Governors").
(b)           Atlantic 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)           Atlantic 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 subordinated debentures, and required notice of deferral on
trust preferred securities. All requests shall contain, at a minimum, current
and projected information on Atlantic's capital, earnings, and cash flow; the
Bank' capital, asset quality, earnings, and allowance for loan and lease losses;
and identification of the sources of funds for the proposed payment or
distribution. For requests to declare or pay dividends, Atlantic 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
2.           (a)           Atlantic and any nonbank subsidiary 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, and the planned source(s) for debt repayment, and
an

 
2

--------------------------------------------------------------------------------

 

analysis of the cash flow resources available to meet such debt repayment.
(b)           Atlantic shall not, directly or indirectly, purchase or redeem any
shares of its stock without the prior written approval of the Reserve Bank.
Compliance with Laws and Regulations
3.           (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,
Atlantic shall comply with the notice provisions of section 32 of the FDI Act
(12 U.S.C. § 183li) and Subpart H of Regulation Y of the Board of Governors (12
C.F.R. §§ 225.71 et seq.).
(b)           Atlantic 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 Federal Deposit Insurance Corporation's regulations (12 C.F.R.
Part 359).
Progress Reports
4.           Within 30 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.
Communications
5.           All communications regarding this Agreement shall be sent to:

 (a)           Mr. Robert D. Hawkins
Assistant Vice President
Federal Reserve Bank of Atlanta
1000 Peachtree Street, N.E.
Atlanta, Georgia 30309-4470

(b)           Mr. Barry W. Chandler
President and Chief Executive Officer
Atlantic BancGroup, Inc.
1315 Third Street
Jacksonville Beach, Florida 32240
 
 
3

--------------------------------------------------------------------------------

 

 
6.           Notwithstanding any provision of this Agreement, the Reserve Bank
may, in its sole discretion, grant written extensions of time to Atlantic to
comply with any provision of this Agreement.
7.           The provisions of this Agreement shall be binding upon Atlantic and
its institution-affiliated parties, in their capacities as such, and their
successors and assigns.
8.           Each provision of this Agreement shall remain effective and
enforceable until stayed, modified, terminated, or suspended in writing by the
Reserve Bank.
9.           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 Atlantic, the Bank, any nonbank
subsidiary of Atlantic, or any of their current or former institution-affiliated
parties and their successors and assigns.
10.           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 panics have caused this Agreement to be executed as of
the 26th day of March, 20 10.

ATLANTIC DANCGROUP, INC.
 
FEDERAL RESERVE BANK OF
     
ATLANTA
                                       
By:
   
By:
 
 
Mr. Barry W. Chandler
   
Robert D. Hawkins
 
President and Chief Executive Officer
   
Assistant Vice President

 
4