Exhibit 10.30
UNITED STATES OF AMERICA
Before the
OFFICE OF THRIFT SUPERVISION

         
 
       
 
  )    
In the Matter of
  )   Order No.:
 
  )    
 
  )    
AnchorBank, fsb
  )   Effective Date:
 
  )    
Madison, Wisconsin
  )    
OTS Docket No. 04474
  )    
 
  )    

ORDER TO CEASE AND DESIST
     WHEREAS, AnchorBank, fsb, Madison, Wisconsin, OTS Docket No. 04474
(Association), by and through its Board of Directors (Board) has executed a
Stipulation and Consent to the Issuance of an Order to Cease and Desist
(Stipulation); and
     WHEREAS, the Association, by executing the Stipulation, has consented and
agreed to the issuance of this Order to Cease and Desist (Order) by the Office
of Thrift Supervision (OTS) pursuant to 12 USC § 1818(b); and
     WHEREAS, pursuant to delegated authority, the OTS Regional Director for the
Central Region (Regional Director), is authorized to issue Orders to Cease and
Desist where a savings association has consented to the issuance of an order.
     NOW, THEREFORE, IT IS ORDERED that:

1.   The Association and its directors, officers, and employees shall cease and
desist from any action (alone or with others) for or toward causing, bringing
about, participating in or counseling all unsafe or unsound practices that
resulted in the Association operating at a loss,

 

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    with a large volume of adversely classified assets, and with an inadequate
level of capital for the kind and quality of assets held.

Capital

2.   (a) No later than September 30, 2009, the Association shall achieve and
maintain: (i) a Tier 1 (Core) Capital Ratio of at least seven percent (7%) and
(ii) a Total Risk-Based Capital Ratio of at least eleven percent (11%) after the
funding of an adequate Allowance for Loan and Lease Losses (ALLL).

(b) No later than December 31, 2009, the Association shall achieve and maintain:
(i) a Tier 1 (Core) Capital Ratio of at least eight percent (8%) and (ii) a
Total Risk-Based Capital Ratio of at least twelve percent (12%) after the
funding of an adequate ALLL.
(c) Effective immediately, the Board shall review the Association’s capital
levels at each regular monthly Board meeting and ensure that the Association
continually assesses the sufficiency of the Association’s capital levels
relative to its risk profile, including but not limited to, such risks as:
classified asset levels, nonaccrual loans, and core earnings. The trends in such
risks shall also be reviewed and monitored by the Board. The Board’s review of
capital adequacy and any actions to be taken to ensure that adequate capital
levels are maintained shall be fully detailed in the Board meeting minutes.

3.   (a) Within sixty (60) days, the Board shall adopt and submit to the
Regional Director for review and comment a written contingency plan that will be
implemented by the Association in the event the Association falls below
adequately capitalized as defined in 12 CFR § 565.4(b)(2) (Contingency Plan). At
a minimum, the Contingency Plan shall detail the actions to be taken within
specific time frames to achieve one of the following results: (i) merger with or
acquisition by another federally insured institution or holding

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company thereof; (ii) voluntary liquidation by, among other things, filing the
appropriate applications with OTS in conformity with federal laws and
regulations; or (iii) recapitalization acceptable to the Regional Director.
(b) Within twenty (20) days of receipt of comments from the Regional Director
regarding the Contingency Plan, the Board shall incorporate any comments by the
Regional Director and shall adopt the revised Contingency Plan. The Association
shall provide a copy of the final adopted Contingency Plan to the Regional
Director within five (5) days of Board approval.
(c) The Contingency Plan shall be implemented immediately if the Association
falls below adequately capitalized or upon notification by the Regional Director
of the requirement to implement the Contingency Plan. Once implemented, the
Association shall submit to the Regional Director written status reports
detailing the Association’s actions taken and progress in implementing the
Contingency Plan no later than the 1st and 15th days of each month.
Allowance for Loan & Lease Losses

4.   (a) Within thirty (30) days, the Association shall achieve and maintain
through charges to current operating income, an adequate ALLL. In determining
the adequacy of the ALLL, the Board shall review, at a minimum, the guidance
contained in OTS CEO Letter 250, dated December 13, 2006, Interagency Policy
Statement on the Allowance for Loan and Lease Losses and Frequently Asked
Questions.

(b) Prior to the submission of any Thrift Financial Report (TFR) by the
Association, the Board shall review the adequacy of the ALLL. The minutes of the
Board meetings at which each ALLL review is undertaken shall indicate the
substance of the review, the

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basis for the amount of the ALLL, and the amount of any adjustment to the ALLL.
Asset Quality

5.   (a) Within sixty (60) days, the Board shall adopt and submit to the
Regional Director for review and comment a detailed, written plan with specific
strategies and timeframes to reduce the level of classified assets and
delinquent loans (Problem Asset Plan). The Association’s classified asset and
delinquent loan balances shall include loans in process and unused portions of
lines of credit. The Problem Asset Plan shall contain a schedule of quarterly
reduction targets approved by the Board for reducing the level of adversely
classified assets and delinquent loans at the Association.

(b) Within twenty (20) days of receipt of comments from the Regional Director
regarding the Problem Asset Plan, the Board shall incorporate any comments by
the Regional Director and shall adopt and implement the revised Problem Asset
Plan. The Association shall provide a copy of the final adopted Problem Asset
Plan to the Regional Director within five (5) days of Board approval.
(c) On a quarterly basis, beginning with the quarter ending September 30, 2009,
the Board shall review the Association’s compliance with the final adopted
Problem Asset Plan. The Board shall compare scheduled reduction targets of
classified assets and delinquent loans to actual results. Additionally, as part
of the variance analysis required pursuant to this subparagraph, the Board shall
determine whether any material deviations exist between the scheduled reduction
targets and actual results. The Board shall prepare a written report describing
any material deviations between the projections and actual results (Quarterly
Problem Assets Variance Report). The Board’s review shall be fully detailed in
the Board meeting minutes.

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(d) Within thirty (30) days of the close of each quarter beginning with the
quarter ending September 30, 2009, the Board shall provide the Regional Director
with a copy of the Quarterly Problem Assets Variance Report required by this
paragraph, including a copy of the Board meeting minutes at which such report
was discussed and any supporting documents, reports or other information
reviewed by the Board at the meeting.

6.   (a) Effective immediately, the Association shall not extend, directly or
indirectly, without prior written Regional Director non-objection any additional
credit to, or for the benefit of, any borrower who has a loan or other extension
of credit from the Association that has been charged off or classified, in whole
or in part “Loss” and is uncollected. The requirements of this paragraph shall
not prohibit the Association from renewing (after collection in cash of interest
due from the borrower) any credit already extended to any borrower. The
Association’s expenses incurred in connection with its real estate owned (REO),
including in-substance foreclosures, are not covered by this Paragraph.

(b) Effective immediately, the Association shall not make any further extensions
of credit, directly or indirectly, to any borrower whose loans are adversely
classified “Substandard” unless the Association’s failure to extend further
credit to a particular borrower would be detrimental to the best interests of
the Association. Prior to extending additional credit pursuant to this
subparagraph, whether in the form of a renewal, extension, or further advance of
funds, such additional credit shall be approved by the Board or a designated
committee thereof, who shall certify in writing:

  i.   Why the failure of the Association to extend such credit would be
detrimental to the best interests of the Association;

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  ii.   The extension of additional credit would improve the Association’s
position, including an explanatory statement of how the Association’s position
would improve;     iii.   An appropriate workout plan has been developed and
will be implemented in conjunction with the additional credit to be extended;
and     iv.   The signed certification shall be made a part of the minutes of
the meeting of the Board or designated committee with a copy retained in the
borrower’s credit file.

7.   (a) Within thirty (30) days, the Board shall adopt revisions to the
following procedures of the Association and submit such revisions to the
Regional Director for review and comment:

  i.   internal asset classification procedures required by 12 CFR § 560.160 to
address the concerns raised in the ROE;     ii.   loan monitoring procedures to
address the concerns raised in the ROE, including the need for updated and
accurate borrower financial information; and     iii.   real estate owned
(REO) appraisal procedures to address the requirements of 12 CFR § 560.172.

(b) Within twenty (20) days of receipt of comments from the Regional Director
regarding the revised procedures submitted, the Board shall incorporate any
comments by the Regional Director and shall adopt and implement the revised
procedures. The Association shall provide a copy of the final adopted procedures
to the Regional Director within five (5) days of Board approval.

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Business Plan

8.   (a) By July 31, 2009, the Board shall revise and submit to the Regional
Director for review and comment its current three-year business plan (Revised
Business Plan), to include the requirements contained within this Order and the
comments contained within the ROE, as well as ensuring, at a minimum, inclusion
of the following:

  i.   Defined strategies for capital enhancement commensurate with the capital
maintenance requirement of paragraph 2 above; and     ii.   Emphasis on reducing
classified assets and maintaining an adequate ALLL.

(b) Within thirty (30) days of receiving the Regional Director’s comments, the
Board shall incorporate the Regional Director’s comments, if any, and adopt and
implement the Revised Business Plan. The Board shall send a copy of the final
Revised Business Plan to the Regional Director within five (5) days of Board
approval.
(c) Once the Board has adopted the Revised Business Plan, the Association must
operate within the parameters of its Revised Business Plan. Any proposed
material deviations from or changes to the Revised Business Plan must be
submitted for the prior, written approval of the Regional Director and be
submitted at least sixty (60) days before a proposed change is implemented.
(d) On a quarterly basis, beginning with the first quarter ending September 30,
2009, the Association shall compare projected operating results contained within
the Revised Business Plan to actual results (Business Plan Variance Analysis
Report).
(e) The Board shall review the Business Plan Variance Analysis Report each
quarter and conduct a thorough and diligent review and assessment of the
Association’s implementation of and compliance with the approved Revised
Business Plan. The

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Board’s review of the Business Plan Variance Analysis Report and assessment of
the Association’s compliance shall be fully documented in the appropriate Board
meeting minutes. Within thirty (30) days of the close of each quarter, beginning
with the quarter ending September 30, 2009, the Board shall provide the Regional
Director with a copy of the Business Plan Variance Analysis Report required by
this paragraph.
Loan Administration

9.   (a) Within ninety (90) days, the Board shall obtain an independent review
of the staffing in the Association’s commercial and commercial real estate
lending department, including collection, workout, and loss mitigation staffing
levels and organizational structure, completed by a qualified, third party
(Commercial Lending Review). The Commercial Lending Review shall address whether
additional staff is necessary at the Association for safe and prudent commercial
loan administration relative to the Association’s level of criticized assets.
The Association’s engagement letter with the third party shall provide that the
written report of the results of the Commercial Lending Review, whether in final
or draft format (Commercial Lending Review Report), be simultaneously provided
to both the Board and the Regional Director.

(b) Within forty-five (45) days of receipt of the final Commercial Lending
Review Report, the Board shall consider the findings of the Commercial Lending
Review and adopt and submit to the Regional Director for review and comment a
plan for the Association to implement recommendations of the Commercial Lending
Review Report (Implementation Plan).
(c) Within twenty (20) days of receipt of comments from the Regional Director
regarding the submitted Implementation Plan, the Board shall incorporate any
comments

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by the Regional Director and shall adopt and implement the Implementation Plan.
The Board shall provide a copy of the final Implementation Plan to the Regional
Director within five (5) days of Board approval.
Liquidity and Rate Sensitivity

10.   (a) By July 31, 2009, the Board shall review and revise the Association’s
Liquidity Management Policy to address the comments and corrective actions in
the ROE.

(b) By July 31, 2009, the Board shall ensure that the Association’s loan
portfolio is stress-tested as described in the ROE and the results are
incorporated in the Association’s rate sensitivity assessment.
Asset Growth

11.   Effective immediately, the Association is subject to and shall comply with
the requirements and provisions of OTS Regulatory Bulletin 3b. Without the prior
written approval of the Regional Director, the Association shall not increase
its total assets during any quarter in excess of an amount equal to net interest
credited on deposit liabilities during the quarter. The growth restrictions
imposed by this paragraph shall begin with the Association’s total assets as of
June 30, 2009 and remain in effect until the Regional Director reviews and
approves the Association’s Revised Business Plan under paragraph 8 of this
Order. Any growth in assets, including any growth proposed in the Business Plan,
should consider:

a) The source, volatility and use of the funds that support asset growth;
b) Any increase in credit risk or interest rate risk as a result of growth; and
c) The effect of such growth on the Association’s capital.

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Management Changes

12.   Effective immediately, the Association shall comply with the prior
notification requirements for changes in directors and Senior Executive Officers
set forth in 12 CFR Part 563, Subpart H.

Brokered Deposits

13.   The Association shall comply with the requirements of 12 CFR § 337.6(b)(2)
and shall not, without obtaining the prior written approval of the Federal
Deposit Insurance Corporation (FDIC) pursuant to 12 CFR § 337.6(c): (i) accept,
renew or roll over any brokered deposit, as that term is defined at 12 CFR §
337.6(a)(2); or act as a deposit broker, as that term is defined at 12 CFR §
337.6(a)(5).

Severance and Indemnification Payments

14.   The Association shall not make any golden parachute payment1 or any
prohibited indemnification payment2 unless, with respect to each such payment,
the Association has complied with the requirements of 12 CFR Part 359 and, as to
indemnification payments, 12 CFR § 545.121.

Employment Contracts and Compensation Arrangements

15.   Effective immediately, the Association shall not enter into, renew, extend
or revise any contractual arrangement related to compensation or benefits with
any director or Senior Executive Officer of the Association, unless it provides
the Regional Director with not less than thirty (30) days prior written notice
of the proposed transaction. The notice to the Regional Director shall include a
copy of the proposed employment contract or

 

1   The term “golden parachute payment” is defined at 12 CFR § 359.1(f).   2  
The term “prohibited indemnification payment” is defined at 12 CFR § 359.1(I).

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compensation arrangement, or a written description of the compensation
arrangement to be offered to such officer or director, including all benefits
and perquisites. The Board shall ensure that any contract, agreement, or
arrangement submitted to OTS fully complies with the requirements of 12 CFR
Part 359, 12 CFR §§ 563.39 and 563.161(b), and 12 CFR Part 570-Appendix A.
Third Party Contracts

16.   Effective immediately, the Association shall not enter into any
arrangement or contract with a third party service provider that is significant
to the overall operation or financial condition of the Association3 or outside
the Association’s or subsidiary’s normal course of business unless, with respect
to each such contract, the Association has: (i) provided OTS with a minimum of
thirty (30) days prior written notice of such arrangement or contract;
(ii) determined that the arrangement or contract complies with the standards and
guidelines set forth in OTS Thrift Bulletin 82a; and (iii) received written
notice of non-objection from the Regional Director.

Capital Distributions

17.   Effective immediately, the Association shall not declare or pay dividends
or make any other capital distributions including the repurchase or redemption
of capital stock, without receiving the prior written approval of the Regional
Director. The Association’s written request for approval shall be submitted at
least thirty (30) days prior to the anticipated date of the proposed dividend
payment or distribution of capital.

 

3   A contract will be considered significant to the overall operation or
financial condition of the Association where the annual contract amount equals
or exceeds two percent (2%) of the Association’s total capital.

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Transactions with Affiliates

18.   Effective immediately, the Association shall not engage in any new
transaction with an affiliate unless, with respect to each such transaction, the
Association has complied with the notice requirements set forth in 12 CFR §
563.41(c)(4), which shall include the information set forth in 12 CFR §
563.41(c)(3). The Board shall ensure that any transaction with an affiliate for
which notice is submitted pursuant to this paragraph, complies with the
requirements of 12 CFR § 563.41 and Regulation W, 12 CFR Part 223.

Effective Date, Incorporation of Stipulation

19.   This Order is effective on the Effective Date as shown on the first page.
The Stipulation is made a part hereof and is incorporated herein by this
reference.

Duration

20.   This Order shall remain in effect until terminated, modified or suspended,
by written notice of such action by OTS, acting by and through its authorized
representatives.

Time Calculations

21.   Calculation of time limitations for compliance with the terms of this
Order run from the Effective Date and shall be based on calendar days, unless
otherwise noted.

22.   The Regional Director may extend any of the deadlines set forth in the
provisions of this Order upon written request by the Association that includes
reasons in support for any such extension. Any OTS extension shall be made in
writing.

Submissions and Notices

23.   All submissions, including progress reports, to OTS that are required by
or contemplated by this Order shall be submitted within the specified
timeframes.

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24.   Except as otherwise provided herein, all submissions, requests,
communications, consents or other documents relating to this Order shall be in
writing and sent by first class U.S. mail (or by reputable overnight carrier,
electronic facsimile transmission or hand delivery by messenger) addressed as
follows:

  a.   To OTS:         Regional Director
Office of Thrift Supervision
One South Wacker Drive, Suite 2000
Chicago, Illinois 60606
Facsimile: (312) 917-5002     b.   To the Association:         Chairman of the
Board
AnchorBank, fsb
25 West Main Street
Madison, Wisconsin 53703-3329
Facsimile: (608) 252-8783

No Violations Authorized

25.   Nothing in this Order or the Stipulation shall be construed as allowing
the Association, its Board, officers or employees to violate any law, rule, or
regulation.

     IT IS SO ORDERED.

            OFFICE OF THRIFT SUPERVISION
      By:           Daniel T. McKee        Regional Director, Central Region    
    Date: See Effective Date on page 1     

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