Prompt Corrective Action Directive



 UNITED STATES OF AMERICA 
 BEFORE THE 
 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

 WASHINGTON, D.C. 
  

			
	  
 In the Matter of
  
 MARCO COMMUNITY BANK
 Marco Island, Florida
	  	 Docket No. 10-030-PCA-SM
  
 Prompt Corrective Action
 Directive Issued Upon
Consent
 Pursuant to Section 38 of the
 Federal Deposit Insurance Act, as
 Amended


 WHEREAS, the Board of Governors of the Federal Reserve System (the “Board of
Governors”) determined that, as of January 30, 2010, Marco Community Bank, Marco Island, Florida (the “Bank”), a state chartered bank that is a member of the Federal Reserve System, is critically undercaptialized, as defined in
section 208.43(b)(5) of Regulation H of the Board of Governors (12 C.F.R. § 208.43(b)(5)), for purposes of section 38 of the Federal Deposit Insurance Act, as amended (the “FDI Act”) (12 U.S.C. § 1831o); 
 WHEREAS, the actions in this Prompt Corrective Action Directive (the “Directive”) are necessary to carry out the purposes of
section 38 of the FDI Act; and 
 WHEREAS, on February 2, 2010, the board of directors of the Bank, at a duly constituted
meeting, adopted a resolution authorizing and directing CEO James B. Kauffman to enter into this Directive on behalf of the Bank, and consenting to compliance with each and every provision of this Directive by the Bank and its institution-affiliated
parties, as defined in section 3(u) of the FDI Act (12 U.S.C. § 1813(u)). 







 NOW THEREFORE, pursuant to section 38 of the FDI Act and section 208.45 of Regulation H of
the Board of Governors, the Board of Governors immediately directs that: 
 1. The Bank shall no later than 45 days of the date
of this Directive (or such additional time as the Board of Governors may permit), in conjunction with the Bank’s parent bank holding company, Marco Community Bancorp, Inc., Marco Island, Florida: 
 (a) Increase the Bank’s equity through the sale of shares or contributions to surplus in an amount sufficient to make
the Bank adequately capitalized as defined in section 208.43(b)(2) of Regulation H of the Board of Governors (12 C.F.R. § 208.43(b)(2)); 
 (b) enter into and close a contract to be acquired by a depository institution holding company or combine with another
insured depository institution, closing under which contract is conditioned only on the receipt of necessary regulatory approvals, the continued accuracy of customary representations and warranties, and the performance of customary pre-closing
covenants; or 
 (c) take other necessary measures to make the Bank adequately capitalized. 
 2. The Bank shall comply fully with the provisions of section 38(d)(l) of the FDl Act (12 U.S.C. § 1831o(d)(1)) restricting the
making of any capital distributions, including, but not limited to, the payment of dividends. 
 3. (a) The Bank shall not,
without the prior written approval of the Federal Reserve Bank of Atlanta (the “Reserve Bank”) and the fulfillment of one of the requirements set forth in paragraph 1, solicit and accept new deposit accounts or renew any time deposit
bearing an interest rate that exceeds the prevailing effective rates on insured deposits of comparable amounts and maturities in the Bank’s market area. 
  

 2 








 (b) Within 30 days of this Directive, the Bank shall submit an acceptable
plan and timetable to the Reserve Bank for conforming the rates of interest paid on all existing non-time deposit accounts to the prevailing effective rates on insured deposits of comparable amounts in the Bank’s market area. The plan shall
detail the current composition of the applicable deposits by rate and provide a specific date for conforming all deposit rates to the statutory restriction. 
 4. The Bank shall comply fully with the provisions of sections 38(f)(4)(A)(i) and (ii) of the FDI Act (12 U.S.C. §§ 183lo(f)(4)(A)(i) and (ii)) restricting the payment
of bonuses to senior executive officers and increases in compensation of such officers. 
 5. The Bank shall comply fully with
the provisions of sections 38(e)(3) and (4) of the FDI Act (12 U.S.C. §§ 183lo(e)(3) and (4)) restricting asset growth, acquisitions, branching, and new lines of business. 
 6. The Bank shall comply fully with the provisions of section 38(i) of the FDI Act (12 U.S.C. §§ 1831o(i)) and
sections 325.101(c) and 325.105(a)(4) of the regulations of the Federal Deposit Insurance Corporation (the “FDIC”) (12 C.F.R.
 §§ 325.101(c) and 325.105(a)(4)) restricting certain activities, including, but not limited to
making any material change in accounting methods and engaging in any covered transaction, as defined in section 23A of the Federal Reserve Act (12 U.S.C. § 371c) without the prior written approval of the FDIC. 
 7. Thirty days after the date of this Directive and monthly thereafter, the Bank shall submit to the Reserve Bank written progress reports
detailing the steps taken to comply with this Directive. 
 8. All communications regarding this Directive shall be sent to:

  

	 	(a)	Mr. Steve Wise 


	 	 	Assistant Vice President 


	 	 	Federal Reserve Bank of Atlanta 


	 	 	1000 Peachtree Street, N.E. 


	 	 	Atlanta, Georgia 30309-4470 

  

 3 









	 	(b)	Mr. Richard Storm 


	 	 	President and Chief Operating Officer 


	 	 	Marco Community Bank 


	 	 	1770 San Marco Road 


	 	 	Marco Island, Florida 34146 

 9.
Notwithstanding any provision of this Directive, the Reserve Bank may, in its sole discretion, grant written extensions of time to the Bank to comply with any provision of this Directive. 
 10. The provisions of this Directive shall be binding upon the Bank and its institution-affiliated parties, in their capacities as such, and
their successors and assigns. 
 11. Each provision of this Directive shall remain effective and enforceable until stayed,
modified, terminated or suspended in writing by the Board of Governors. 
 12. The provisions of this Directive shall not bar,
estop or otherwise prevent the Board of Governors, the Reserve Bank, or any other federal or state department or agency from taking any other action affecting the Bank or any of its current or former institution-affiliated parties and their
successors or assigns. 
 13.   (a) The Directive does not supersede the Written Agreement by and among Marco
Community Bancorp, Inc., the Bank, the Reserve Bank, and the Florida Office of Financial Regulation, dated August 14, 2007. 
 (b) Notwithstanding any provision of this Directive, the Bank shall comply with any other supervisory action issued by the Board of Governors, the Reserve Bank, or the Florida Office of Financial
Regulation. 
  

 4 








 14. As set forth in section 263.205 of the Board of Governors’ Rules of Practice for
Hearings (12 C.F.R. § 263.205), this Directive is enforceable by the Board of Governors under section 8 of the FDI Act (12 U.S.C. § 1818). 
 By order of the Board of Governors of the Federal Reserve System, effective this              day of February 2010. 
  

									
	 MARCO COMMUNITY BANK
  
 By:
 


	 		 	 BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM

	 		 	By: 	 	 
		 		 		 		 	 Jennifer J. Johnson
 Secretary of the Board


  

 5