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

     
 
 
Written Agreement by and between
 
 
 
 
Docket No. 13-028-WA-HC
TRINITY CAPITAL CORPORATION
 
 
Los Alamos, New Mexico
 
 
 
 
 
and
 
 
 
 
 
FEDERAL RESERVE BANK OF
 
 
KANSAS CITY
 
 
Kansas City, Missouri
 
 
 
 
 
 
 
 
 
 
 

      WHEREAS, Trinity Capital Corporation, Los Alamos, New Mexico ("Trinity"),
a registered bank holding company, owns and controls Los Alamos National Bank,
Los Alamos,  New Mexico (the "Bank"), a national bank, and various nonbank
subsidiaries;

WHEREAS, it is the common goal of Trinity and the Federal Reserve Bank of Kansas
City (the "Reserve Bank") to maintain the financial soundness of Trinity so that
Trinity may serve as a source of strength to the Bank;
 
WHEREAS, Trinity and the Reserve Bank have mutually agreed to enter into this
Written Agreement (the "Agreement"); and
 
WHEREAS, on September 20, 2013, the board of directors of Trinity, at a duly
constituted meeting, adopted a resolution authorizing and directing Jerry
Kindsfather to enter into this Agreement on behalf of Trinity, and consenting to
compliance with each and every
 
 
 
 
 

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provision of this Agreement by Trinity and its institution-affiliated parties,
as defined in 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, Trinity and the Reserve Bank agree as follows:
 
Source of Strength
 
1.            The board of directors of Trinity shall take appropriate steps to
fully utilize Trinity's financial and managerial resources, pursuant to section
38A of the FDI Act (12 U.S.C. § 1831o-1) and 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
Agreement entered into with The Comptroller of the Currency on November 20, 2012
and any other supervisory action taken by the Bank's federal regulator.
 
Dividends and Distributions
 
2.                 (a)            Trinity 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.
 
(b)            Trinity 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)            Trinity and its nonbank subsidiaries 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.
 
 
 
 

 
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(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 Trinity'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 or
distribution. For requests to declare or pay dividends, Trinity 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)            Trinity 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 analysis of the cash flow resources available to meet such debt repayment. 
 
  (b)            Trinity 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, Trinity shall submit to the
Reserve Bank an acceptable written plan to maintain sufficient capital at
Trinity on a consolidated basis and to provide financial support to the Bank.
The plan shall, at a minimum, address, consider, and include:
 
 
 
 
 
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(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 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, its risk profile, the adequacy of the allowance
for loan and lease losses, current and projected asset growth, and projected
earnings;
 
(c)             the source and availability of additional funds necessary to
fulfill the consolidated organization's and the Bank's future capital
requirements on a timely basis;
 
(d)            supervisory requests for additional capital at the Bank or the
requirements of any supervisory action imposed on the Bank by its regulator; and
 
(e)            the requirements of section 38A of the FDI Act and section
225.4(a) of Regulation Y of the Board of Governors that Trinity serve as a
source of strength to the Bank.
 
5.            Trinity shall notify the Reserve Bank, in writing, no more than 45
days after the end of any quarter in which any of Trinity's capital ratios fall
below the approved plan's minimum ratios. Together with the notification,
Trinity shall submit an acceptable written plan that details the steps that
Trinity will take to increase Trinity's capital ratios to or above the approved
plan's minimums.
 
Cash Flow Projections
 
6.            Within 60 days of this Agreement, Trinity shall submit to the
Reserve Bank a written statement of its planned sources and uses of cash for
debt service, operating expenses, and other purposes ("Cash Flow Projection")
for 2014. Trinity shall submit to the Reserve Bank
 
 
 
 
 
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 a Cash Flow Projection for each calendar year subsequent to 2014 at least one
month prior to the beginning of that calendar year.
 
Compliance with Laws and Regulations
 
7.            (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,
Trinity shall comply with the notice provisions of section 32 of the FDI Act (12
U.S.C. § 1831i) and Subpart H of Regulation Y of the Board of Governors (12
C.F.R. §§ 225.71 et seq.).
 
    (b)            Trinity 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
 
8.            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.
 
Approval and Implementation of Plan
 
9.         (a)            Trinity 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, Trinity shall
adopt the approved capital plan. Upon adoption, Trinity shall promptly implement
the approved plan, and thereafter fully comply with it.
 
 
 
 
 
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(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.
 
Communications
 
10.            All communications regarding this Agreement shall be sent to:
 
(a)               Mr. Todd A. Offenbacker
Vice President
Federal Reserve Bank of Kansas City
1 Memorial Drive
Kansas City, Missouri 64198

(b)               Ms. Heather Boone
General Counsel
Trinity Capital Corporation
1200 Trinity Drive
Los Alamos, New Mexico 87544

Miscellaneous
 
11.            Notwithstanding any provision of this Agreement, the Reserve Bank
may, in its sole discretion, grant written extensions of time to Trinity to
comply with any provision of this Agreement.
 
12.            The provisions of this Agreement shall be binding upon Trinity
and its institution affiliated parties, in their capacities as such, and their
successors and assigns.
 
13.            Each provision of this Agreement shall remain effective and
enforceable until stayed, modified, terminated, or suspended in writing by the
Reserve Bank.
 
14.            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 Trinity, the Bank, any
nonbank subsidiary of Trinity, or any of their current or former
institution-affiliated parties and their successors and assigns.
 
 
 
 
 
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15.            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 26th day of September, 2013.
 
 

 
TRINITY CAPITAL CORPORATION
 
FEDERAL RESERVE BANK
 
 
OF KANSAS CITY
 
 
 
 
By:
/s/ Jerry Kindsfather
 
By:
/s/  Todd A. Offenbacker
 
Jerry Kindsfather
 
 
Todd A. Offenbacker
 
Chairman of the Board
 
 
Vice President

 
 
 
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