oconee_10q-ex1001.htm


    Exhibit
10.1

    FEDERAL
DEPOSIT INSURANCE CORPORATION

     

    WASHINGTON,
D.C.

     

    
      
        	 
      	
                )

              	 
      
	
                In
      the Matter of

              	
                )

              	 
      
	 
      	
                )

              	
                ORDER
      TO

              
	
                OCONEE
      STATE BANK

              	
                )

              	
                CEASE
      AND DESIST

              
	
                WATKINSVILLE,
      GEORGIA

              	
                )

              	
                FDIC-09-221b

              
	 	)	 
	      
                (INSURED
      STATE NONMEMBER BANK)

                 

              	)	 


      

    

     

     

     

    OCONEE
STATE BANK, WATKINSVILLE, GEORGIA (“Bank”), having been advised of its right to
a Notice of Charges and of Hearing detailing the unsafe or unsound banking
practices and violations of law and/or regulations alleged to have been
committed by the Bank and of its right to a hearing on the alleged charges under
section 8(b)(1) of the Federal Deposit Insurance Act (“Act”), 12 U.S.C. §
1818(b)(1), and the Official Code of Georgia Annotated § 7-1-91, O.C.G.A. §
7-1-91 (1985), and having waived those rights, entered into a STIPULATION AND
CONSENT TO THE ISSUANCE OF AN ORDER TO CEASE AND DESIST (“CONSENT AGREEMENT”)
with a representative of the Legal Division for the Federal Deposit Insurance
Corporation (“FDIC”) and the Commissioner (“Commissioner”) for the State of
Georgia, Department of Banking and Finance (“Department”), dated August 6, 2009,
whereby solely for the purpose of this proceeding and without admitting or
denying the alleged charges of unsafe or unsound banking practices and
violations of law and/or regulations, the Bank consented to the issuance of an
ORDER TO CEASE AND DESIST (“ORDER”) by the FDIC and the
Commissioner.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    The FDIC
and the Commissioner considered the matter and determined that it had reason to
believe that the Bank had engaged in unsafe or unsound banking practices and had
committed violations of law and/or regulations. The FDIC and the Commissioner,
therefore, accepted the CONSENT AGREEMENT and issued the following:

     

    ORDER TO CEASE AND
DESIST

     

    IT IS
HEREBY ORDERED, that the Bank, its institution-affiliated parties, as that term
is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), and its successors
and assigns cease and desist from the following unsafe and unsound banking
practices and violations of law and/or regulation:

    (a)   Operating
with a board of directors (“Board”) that has failed to provide adequate
direction to management of the Bank;

    (b)   Operating
with management whose policies and practices are detrimental to the Bank and
jeopardize the safety of its deposits;

    (c)   Operating
with insufficient equity capital and reserves in relation to the volume and
quality of assets held by the Bank;

    (d)   Operating
with an excessive level of adversely classified items;

    (e)   Operating
with inadequate provisions for liquidity and funds management;

    (f)   Operating
with hazardous loan underwriting and administration practices;

    (g)   Operating
in such a manner as to produce operating losses; and

    (h)   Operating
in apparent violation of laws, regulations, and/or statements of policy as more
fully described on pages 10 through 12 of the FDIC Report of Examination dated
March 16, 2009 (“ROE”).

    IT IS
FURTHER ORDERED, that the Bank, its institution-affiliated parties, and its
successors and assigns, take affirmative action as follows:

     

    


    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

     

     

    BOARD OF
DIRECTORS

     

    1.            (a)    Beginning
with the effective date of this ORDER, the Board shall increase participation
in the affairs of the Bank, assuming full responsibility for the approval of
sound policies, strategic plans, and budgets for the supervision of all of the
Bank’s activities, consistent with the role and expertise commonly expected for
directors of banks of comparable size. The Board shall establish specific
procedures designed to fully inform the Board regarding the management,
operation, and financial condition of the Bank at regular intervals and in a
consistent format. This participation shall include meetings to be held no less
frequently than monthly at which, at a minimum, the following areas shall be
reviewed and approved: reports of income and expenses; new, overdue, renewed,
extended, restructured, insider, non-accrual, charged-off, and recovered loans;
investment activity; operating policies; personnel actions; audit and
supervisory reports; and the minutes summarizing individual committee meetings
and actions. Board minutes shall be detailed, maintained and recorded on a
timely basis and shall document reviews and any related actions, including the
names of any dissenting directors.

     

    (b)    Within 30
days from the effective date of this ORDER, the Board shall establish
a Board committee (“Directors’ Committee”), consisting of at least four members,
responsible for ensuring compliance with the ORDER, overseeing corrective
measures with respect to the ORDER, and reporting to the Board. Three of the
members of the Directors’ Committee shall not be officers of the Bank. The
Director’s Committee shall monitor compliance with this ORDER and, within 30
days from the effective date of this
ORDER, and every 30 days thereafter, shall submit a written report detailing the
Bank’s compliance with this ORDER to the Board, for review and consideration
during its regularly scheduled meeting. Such report and any discussion related
to the report or the ORDER shall be recorded in the appropriate minutes of the
meeting of the Board and shall be retained in the Bank’s records. Nothing
contained herein shall diminish the responsibility of the entire Board to ensure
compliance with the provisions of this ORDER.

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

       

      MANAGEMENT

    

     

    2.            (a)    Within 60
days from the effective date of this ORDER, the Bank shall have and
retain qualified management. Each member of management shall have qualifications
and experience commensurate with his or her duties and responsibilities at the
Bank. Each member of management shall be provided appropriate written authority
from the Board to implement the provisions of this ORDER. At a minimum
management shall include:

     

    
      	
              (i)  

            	
              a
      chief executive officer with proven ability in managing a bank of
      comparable size and in effectively implementing lending, investment and
      operating policies in accordance with sound banking
    practices;

            


    

     

    
      	
              (ii)  

            	
              a
      senior lending officer with a significant amount of appropriate lending,
      collection, loan supervision and loan work-out experience for the type and
      quality of the Bank’s loans, and experience in upgrading low quality loan
      portfolio; and

            


    

     

    
      	
              (iii)  

            	
              a
      chief financial officer with a significant amount of appropriate
      experience in managing the operations of a bank of similar size
      and
      complexity in accordance with sound banking
  practices.

            


    

     

     4
-

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (b)            During
the life of this ORDER, the Bank shall notify the FDIC’s Atlanta Regional
Director (“Regional Director”) and the Commissioner (collectively the
“Supervisory Authorities”), in writing, of the resignation or termination of any
of the Bank’s directors or senior executive officers. Prior to the addition of
any individual to the Board or the employment of any individual as a senior
executive officer, the Bank shall comply with the requirements of section 32 of
the Act, 12 U.S.C. § 1831(i), subpart F of Part 303 of the FDIC Regulations, 12
C.F.R. §§ 303.100-303.103 and any State requirement for prior notification and
approval. The notification shall include a description of the background and
experience of the individual(s) to be added or employed and must be received at
least 30 days before such addition or employment is intended to become
effective. The Bank may not add any individual to its Board or employ any
individual as an executive officer if the Regional Director or Commissioner
issues a notice of disapproval pursuant to section 32 of the FDI Act, 12 U.S.C.
§ 1831(i).

     

    CAPITAL

     

    3.            (a)    Within 90
days from the effective date of this ORDER, the Bank shall obtain
Tier 1 Capital in such amount as to equal or exceed eight percent (8%) of the
Bank’s total assets and total risk-based capital in such an amount as to equal
or exceed ten percent (10%) of the Bank’s total risk-weighted assets. The Bank
shall maintain these levels during the life of this ORDER.

     

    (b)    The level of
Tier 1 Capital and total risk-based capital to be maintained during
the life of this ORDER pursuant to subparagraph 3(a) shall be in addition to a
fully
funded allowance for loan and lease losses (“ALLL”), the adequacy of which shall
be satisfactory to the Supervisory Authorities as determined at subsequent
examinations and/or visitations.

     

    


     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (c)    Any increase
in Tier 1 Capital necessary to meet the requirements of Paragraph
3 of this ORDER may not be accomplished through a deduction from the Bank’s
ALLL. For purposes of this ORDER, the terms “Tier 1 Capital,” “total risk-based
capital,” “total assets,” and “total risk-weighted assets” shall have the
meanings ascribed to them in Part 325 of the FDIC Rules and Regulations, 12
C.F.R. Part 325.

     

    CHARGE-OFF

     

    4.          
  (a)    Within 10 days from
the effective date of this ORDER, the Bank shall eliminate
from its books, by charge-off or collection, all assets or portions of assets
classified “Loss” and fifty percent (50%) of those assets classified “Doubtful”
in the ROE that have not been previously collected or charged-off. If an asset
classified “Doubtful” is a loan or a lease, the Bank may, in the alternative,
increase its ALLL by an amount equal to fifty percent (50%) of the loan or lease
classified as “Doubtful.”

     

    (b)   Additionally,
while this ORDER remains in effect, the Bank shall, within 30 days of the
receipt of any future report of examination or visitation report of the Bank
from the Regional Director or the Commissioner, eliminate from its books, by
collection, charge-off, or other proper entries, the remaining balance of any
assets classified “Loss” and fifty percent (50%) of those classified “Doubtful,”
unless otherwise approved in writing by the Supervisory
Authorities.

     

    (c)   Elimination
or reduction of assets through proceeds of other loans made by the Bank is not
considered collection for purposes this paragraph.

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    REDUCTION OF CLASSIFIED
ITEMS

     

    5.          (a)    Within 60
days from the effective date of this ORDER, the Bank shall formulate
a written plan to reduce the Bank’s risk exposure in each asset in excess of
$500,000 classified as “Substandard” or “Doubtful” in the ROE. In developing the
plan mandated by this paragraph, the Bank shall, at a minimum, and with respect
to each adversely classified loan, review, analyze, and document the financial
position of the borrower, including source of repayment, repayment ability, and
alternative repayment sources, as well as the value and accessibility of any
pledged or assigned collateral, and any possible actions to improve the Bank’s
collateral position.

     

    (b)    Within 60
days of the effective date of this ORDER, the Bank shall formulate
a written plan to reduce the aggregate balance of assets classified
“Substandard” and those classified “Doubtful” in the ROE in accordance with the
following schedule:

     

    
      
        	
              	
                (i) 

              	
                Within
      180 days from the effective date of this ORDER, the Bank shall reduce the
      items classified “Substandard” or “Doubtful” in the ROE by twenty percent
      (20%);

              


      

    

     

    
      
        	
              	
                (ii) 

              	
                Within
      360 days from the effective date of this ORDER, the Bank shall reduce the
      items classified “Substandard” or “Doubtful” in the ROE by forty percent
      (40%);

              


      

    

     

    
      
        	
              	
                (iii) 

              	
                Within
      540 days from the effective date of this ORDER, the Bank shall have
      reduced the items classified “Substandard” or “Doubtful” in the ROE by
      sixty percent (60%).

              


      

    

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

     

    (c)    The Bank
shall immediately submit the plans required in subparagraphs 5(a) and
5(b) to the Supervisory Authorities for review and comment. Within 30 days from
the receipt of any comment from the Supervisory Authorities, and after due
consideration of any recommended changes, the Bank shall approve the plans,
which approval shall be recorded in the minutes of the meeting of the Board.
Thereafter, the Bank shall implement and fully comply with the plans. Such plans
shall be monitored and progress reports thereon shall be submitted to the
Supervisory Authorities at 90-day intervals concurrently with the other
reporting requirements set forth in paragraph 19 of this ORDER.

     

    (d)    The
requirements of this paragraph are not to be construed as standards for
future
operations of the Bank. Furthermore, the Bank shall eventually reduce the total
of all adversely classified assets. Reduction of these assets through proceeds
of other loans made by the Bank is not considered collection for the purpose of
this paragraph. As used in subparagraphs 5(a) through (c), the word “reduce”
means:

     

    
      	
            	
              (i)

            	
              to
      collect;

            


    

     

    
      	
            	
              (ii)

            	
              to
      charge off; or

            


    

     

    
      	
            	
              (iii)

            	
              to
      sufficiently improve the quality of assets adversely classified to warrant
      removing any adverse classification as determined by the Regional Director
      or Commissioner.

            


    

     

    NO ADDITIONAL
CREDIT

     

    6.           
 (a)    Beginning with the
effective date of this ORDER, the Bank shall not extend,
directly or indirectly, any additional credit to, or for the benefit of, any
borrower who has a loan or other extension of credit from the Bank that has been
charged-off or classified, in whole or in part, “Loss” or “Doubtful” and is
uncollected. The requirements of this paragraph shall not prohibit the
Bank from renewing (after collection in cash of interest due from the borrower)
any credit already extended to any borrower.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

     

    (b)           Additionally,
during the life of this ORDER, the Bank shall not extend, directly
or indirectly, any additional credit to, or for the benefit of, any borrower who
has a loan or other extension of credit from the Bank that has been classified,
in whole or part, “Substandard” and is uncollected. The requirements of this
paragraph shall not prohibit the Bank from renewing (after collection in cash of
interest due from the borrower) any credit already extended to any
borrower.

     

    (c)          
Subparagraph 6(b) shall not apply if the Bank’s failure to extend
furthercredit to
a particular borrower would be detrimental to the best interests of the Bank.
Prior to the extending of any additional credit pursuant to this paragraph,
either in the form of a renewal, extension, or further advance of funds, such
additional credit shall be approved by a majority of the Board, or a designated
committee thereof, who shall certify, in writing:

     

    
      
        	
              	
                (i) 

              	
                why
      the failure of the Bank to extend such credit would be detrimental to the
      best interests of the Bank;

              


      

    

     

    
      
        	
              	
                (ii) 

              	
                that
      the extension of such credit would improve the Bank's position, including
      an explanatory statement of how the Bank’s position would be improved;
      and

              


      

    

     

    
      
        	
              	
                (iii) 

              	
                an
      appropriate work-out plan has been developed and will be implemented in
      conjunction with the additional credit to be
  extended.

              


      

    

     

    (d)          
The signed certification shall be made a part of the minutes of the Board
or designated committee, and a copy of the signed certification shall be
retained in the borrower's credit file.

     

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    


     

     

    LENDING
PRACTICES

     

    7.   Within 60
days from the effective date of this ORDER, the Bank shall revise, adopt, and
implement a written lending and collection policy to provide effective guidance
and control over the Bank’s lending function, which policy shall include, at a
minimum, revisions to address all items of criticism enumerated within the ROE.
Such policy and its implementation shall be in a form and manner acceptable to
the Supervisory Authorities as determined at subsequent examinations and/or
visitations.

     

    CONCENTRATIONS OF
CREDIT

     

    8.   Within 60
days from the effective date of this ORDER, the Bank shall perform a risk
segmentation analysis with respect to the concentrations of credit listed on
pages 22 and 23 of the ROE. Concentrations should be stratified as the Board
deems appropriate, but shall include concentrations identified by industry,
geographic distribution, underlying collateral, direct or indirect extensions of
credit to or for the benefit of any borrowers dependent upon the performance of
a single developer or builder, and other asset groups that are considered
economically related. The Board should refer to the interagency guidance on
Concentrations in Commercial
Real Estate Lending, Sound Risk Management Practices, for
information regarding risk segmentation analysis. A copy of the analysis shall
be provided to the Supervisory Authorities and the Board shall develop a plan to
reduce any segment of the portfolio which the Supervisory Authorities deem to be
an undue concentration of credit in relation to the Bank’s Tier 1 Capital. The
plan and it implementation shall be in a form and manner acceptable to the
Supervisory Authorities as determined at subsequent examinations and/or
visitations.

     

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    


     

     

    SPECIAL
MENTION

     

    9.   Within 30
days from the effective date of the ORDER, the Bank shall develop a plan to
correct all deficiencies in the assets listed for “Special Mention.” The Bank
shall immediately submit the plan to the Supervisory Authorities for review and
comment. Within 30 days from receipt of any comment from the Supervisory
Authorities, and after due consideration of any recommended changes, the Bank
shall approve the plan, which approval shall be recorded in the minutes of the
Board meeting. Thereafter, the Bank shall implement and fully comply with the
plan.

     

    ESTABLISH/MAINTAIN
ALLOWANCE FOR

    LOAN AND LEASE
LOSSES

     

    10.   Within 30
days from the effective date of this ORDER, the Board shall review the adequacy
of the ALLL and establish a comprehensive policy for determining the adequacy of
the ALLL. For the purpose of this determination, the adequacy of the ALLL shall
be determined after the charge-off of all loans or other items classified
"Loss.” The policy shall provide for a review of the ALLL at least once each
calendar quarter. Said review should be completed at least ten (10) days prior
to the end of each quarter, in order that the findings of the Board with respect
to the ALLL may be properly reported in the quarterly Reports of Condition and
Income. The review should focus on the results of the Bank's internal loan
review, loan and lease loss experience, trends of delinquent and non-accrual
loans, an estimate of potential loss exposure of significant credits,
concentrations of credit, and present and prospective economic conditions. A
deficiency in the ALLL shall be remedied in the calendar quarter it is
discovered, prior to submitting the Report of Condition, by a charge to current
operating earnings. The minutes of the Board
meeting at which such review is undertaken shall indicate the results of the
review. The Bank’s policy for determining the adequacy of the Bank’s ALLL and
its implementation shall be satisfactory to the Supervisory Authorities as
determined at subsequent examinations and/or visitations.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    PLAN TO IMPROVE
EARNINGS

     

    11.            (a)    Within 60
days from the effective date of this ORDER, the Bank shall formulate
and fully implement a written plan and a comprehensive budget for all categories
of income and expense. The plan and budget shall include formal goals and
strategies, consistent with sound banking practices and taking into account the
Bank’s other written policies, to improve the Bank’s net interest margin,
increase interest income, reduce discretionary expenses, and improve and sustain
earnings of the Bank. The plan shall include a description of the operating
assumptions that form the basis for and adequately support major projected
income and expense components. Thereafter, the Bank shall formulate such a plan
and budget by November 30 of each subsequent year.

     

    (b)   The plan
and budget required by this paragraph, and any subsequent modification thereto,
shall be acceptable to the Supervisory Authorities as determined at subsequent
examinations and/or visitations.

     

    (c)   Following
the end of each calendar quarter, the Board shall evaluate the Bank’s actual
performance in relation to the plan and budget required by this paragraph and
shall record the results of the evaluation, and any actions taken by the Bank,
in the minutes of the Board meeting at which such evaluation is
undertaken.

     

    CASH
DIVIDENDS

     

    12.    The Bank
shall not pay cash dividends without the prior written consent of the
Supervisory Authorities.

     

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

     

     

    ASSET/LIABILITY
MANAGEMENT

     

    13.            (a)    Within 60
days from the effective date of this ORDER, the Board shall implement
an asset/liability management policy which establishes an acceptable range for
the Bank’s net noncore funding dependence ratio, as computed by the Uniform Bank
Performance Report. The policy shall set forth suitable benchmarks and
timeframes for the reduction of this ratio to levels that are consistent with
prudent banking practices. To the extent such measures have not previously been
initiated, the Bank shall immediately initiate measures detailed in the policy
required by this paragraph to accomplish the objectives set forth in the policy.
The requirements of this paragraph shall not be construed as standards for
future operations, and the Bank’s net noncore funding dependence ratio shall be
maintained at a level consistent with safe and sound banking practices. Such
policy shall be submitted to the Supervisory Authorities for review and
approval, and its implementation shall be acceptable to the Supervisory
Authorities as determined at subsequent examinations and/or
visitations.

     

    (b)    Within 60
days from the effective date of this ORDER, the Bank shall review,
and amend as necessary, the Bank’s written interest rate risk policy. At a
minimum, the policy shall include guidelines for the following:

     

    
      
        	
              	
                (i) 

              	
                measures
      designed to control the nature and amount of interest rate risk the Bank
      takes, including those that specify risk limits and define lines of
      responsibilities and authority for managing
  risk;

              


      

    

    
      
        	
              	
                (ii) 

              	
                a
      system for identifying and measuring interest rate risk, including a
      periodic calculation to measure interest rate risk exposure at
      various time horizons and compare to established target
      ratios;

              


      

    

     

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    
      
        	
              	
                (iii) 

              	
                establish
      goals and strategies for reducing and managing the Bank’s interest rate
      risk exposure;

              


      

    

    
      
        	
              	
                (iv) 

              	
                a
      system for monitoring and reporting risk exposures;
  and

              


      

    

    
      
        	
              	
                (v) 

              	
                a
      system for internal controls, review, and audit to ensure the integrity of
      the overall management
process.

              


      

    

     

    (c)    Such policy
and its implementation shall be in a form and manner acceptable
to the Supervisory Authorities as determined at subsequent examinations and/or
visitations.

     

    LIQUIDITY CONTINGENCY
FUNDING PLAN

     

    14.   Within 60
days from the effective date of this ORDER, the Bank shall develop or revise,
adopt, and implement a written liquidity contingency funding plan. The written
liquidity contingency funding plan shall incorporate the applicable guidance
contained in Financial Institution Letter (FIL) 84-2008 dated August 26, 2008,
entitled Liquidity Risk Management. The liquidity contingency funding plan shall
provide restrictions on the use of brokered and internet deposits consistent
with safe and sound banking practices. Such plan shall be submitted to the
Supervisory Authorities for review and approval, and its implementation shall be
in a form and manner acceptable to the Supervisory Authorities.

     

    BROKERED
DEPOSITS

     

    15.   During
the life of this ORDER, the Bank shall not accept, renew, or rollover brokered
deposits without obtaining a brokered deposit waiver approved by the FDIC
pursuant to Section 29 of the Act, 12 U. S.C. § 1831 f. For purposes of this
ORDER, brokered deposits are defined as described in Section 337.6(a)(2) of the
FDIC’s Rules and Regulations, 12 C.F.R. § 337.6(a)(2) to include any deposits
funded by third-party agents or nominees for depositors, including depositors
managed by a trustee or custodian when each individual beneficial interest is
entitled to a right to federal deposit insurance.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    


     

     

    ELIMINATE/CORRECT ALL
VIOLATIONS OF LAW

     

    16.   Within 60
days from the effective date of this ORDER, the Bank shall take all necessary
steps, subject to safe and sound banking practices, to eliminate and/or correct
the violations of law set and contraventions of policy out on pages 10 through
12 of the ROE. In addition, the Bank shall take all necessary steps to ensure
future compliance with all applicable laws, regulations, and applicable
policies.

     

    DISCLOSURE

     

    17.   Following
the effective date of this ORDER, the Bank shall send to its shareholders or
otherwise furnish a description of this ORDER in conjunction with the Bank's
next shareholder communication. The description shall fully describe the ORDER
in all material respects. The description and any accompanying communication,
statement, or notice shall be sent to the FDIC, Division of Supervision and
Consumer Protection, Accounting and Securities Disclosure Section, 550 17th
Street, N.W., Washington, D.C. 20429 and the Commissioner, Georgia Department of
Banking and Finance, 2990 Brandywine Road, Suite 200, Atlanta, Georgia
30341-5565 for review at least 20 days prior to dissemination to shareholders.
Any changes requested to be made by the FDIC and the Commissioner shall be made
prior to dissemination of the description, communication, notice, or
statement.

     

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    


    PROGRESS
REPORTS

     

    18.    Within 30
days of the end of the first quarter following the effective date of this
ORDER and
within 30 days of the end of each quarter thereafter, the Bank shall furnish
written progress reports to the Supervisory Authorities detailing the form and
manner of any actions taken, and the results thereof, to secure compliance with
this ORDER. Such written progress reports shall include a copy of the Bank’s
Reports of Condition and Income and shall provide cumulative detail of the
Bank’s progress toward achieving compliance with each provision of the ORDER.
Progress reports may be discontinued when the corrections required by this ORDER
have been accomplished and the Supervisory Authorities have, in writing,
released the Bank from making further reports.

     

    This
ORDER shall become effective immediately. The provisions of this ORDER shall
remain effective and enforceable except to the extent that, and until such time
as, any provisions of this ORDER shall have been modified, terminated,
suspended, or set aside by the FDIC. Pursuant to delegated
authority.

     

    Dated at
Atlanta, Georgia, this 18th day
of August, 2009.

     

     

    

       

      
        	 	      
                /s/
      Doreen
      R. Eberley

                Acting
      Regional Director

                Federal
      Deposit Insurance Corporation

                Atlanta
      Regional Office

                Division
      of Supervision and Consumer
Protection

              


      

       

    

     

     

     

    


    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    The
Georgia Department of Banking and Finance, having duly approved the foregoing
ORDER, and the Bank, through its Board, agree that the issuance of the said
ORDER by the FDIC shall be binding as between the Bank and the Georgia
Commissioner of Banking and Finance to the same degree and legal effect that
such ORDER would be binding on the Bank if the Department had issued a separate
ORDER that included and incorporated all of the provisions of the foregoing
ORDER, pursuant to section 7-1-91 of the Official Code of Georgia Annotated,
O.C.G.A. § 7-1-91 (1985).

     

    Dated
this 18th day of August, 2009.

     

    
    

     

    
      	 	      
              /s/Robert
      M. Braswell

              Commissioner

              Department
      of Banking and Finance State of
Georgia

            


    

     

     

    
       

       

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

    

     

     

    
      FEDERAL
DEPOSIT INSURANCE CORPORATION

       

      WASHINGTON,
D.C.

       

       

      
        	 
      	
                )

              	 
      
	
                In
      the Matter of

              	
                )

              	 
      
	 
      	
                )

              	
                STIPULATION
      AND CONSENT 

              
	
                OCONEE
      STATE BANK

              	
                )

              	
                TO
      THE ISSUANCE OF AN

              
	
                WATKINSVILLE,
      GEORGIA

              	
                )

              	
                ORDER
      TO CEASE AND DESIST

              
	 	)	
              
	      
                (INSURED
      STATE NONMEMBER BANK)

                 

              	)	      
                FDIC-09-221b  

              


      

       

       

      Subject
to the acceptance of this STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER TO
CEASE AND DESIST ("CONSENT AGREEMENT") by the Federal Deposit Insurance
Corporation ("FDIC"), it is hereby stipulated and agreed by and between a
representative of the Legal Division of the FDIC, a representative of the
Georgia Department of Banking and Finance ("DEPARTMENT") and Oconee State Bank,
Watkinsville, Georgia ("Bank"), through its board of directors, as
follows.

       

      1.   The Bank
has been advised of its right to receive a written Notice of Charges and of
Hearing ("Notice") detailing the unsafe or unsound banking practices and
violations of law and/or regulations alleged to have been committed by the Bank
and of its right to a hearing on the alleged charges under section 8(b)(1) of
the Federal Deposit Insurance Act ("Act"), 12 U.S.C. § 1818(b)(1), and the
FDIC's Rules of Practice and Procedure ("Rules"), 12 C.F.R. Part 308, and has
waived those rights.

       

      2.   The Bank,
solely for the purpose of this proceeding and without admitting or denying any
of the alleged charges of unsafe or unsound banking practices and any violations
of law and/or regulations, hereby consents and agrees to the issuance of an
ORDER TO CEASE AND DESIST ("ORDER") by the FDIC and the DEPARTMENT in the form
attached hereto.

       

       

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

       

      The Bank
further stipulates and agrees that such ORDER shall become effective immediately
upon its issuance by the FDIC and the DEPARTMENT and be fully enforceable by the
FDIC pursuant to the provisions of section 8(i)(1) of the Act, 12 U.S.C. §
1818(i)(1), and the Rules, and by the DEPARTMENT subject only to the conditions
set forth in paragraph 3 of this CONSENT
AGREEMENT.

       

      3.   In the
event the FDIC accepts this CONSENT AGREEMENT and issues the ORDER, it is agreed
that no action to enforce said ORDER in the United States District Court will be
taken by the FDIC unless the Bank or any "institution-affiliated party", as such
term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), has violated or
is about to violate any provision of the ORDER.

       

      4.   The Bank
hereby waives:

       

      
        
          	
                	
                  (a) 

                	
                  the
      receipt of a written Notice;

                


        

      

       

      
        	
              	
                (b)

              	
                all
      defenses to the charges to be set forth in the
  Notice;

              


      

       

      
        
          	
                	
                  (c) 

                	
                  a
      hearing for the purpose of taking evidence regarding the allegations to be
      set forth in the Notice;

                


        

      

       

      
        
          	
                	
                  (d) 

                	
                  the
      filing of Proposed Findings of Fact and Conclusions of
  Law;

                


        

      

       

      
        
          	
                	
                  (e) 

                	
                  a
      Recommended Decision of an Administrative Law Judge;
  and

                


        

      

       

      
        	
              	
                (f)

              	
                exceptions
      and briefs with respect to such Recommended Decision. Dated: August 6,
      2009

              


      

       

      FEDERAL
DEPOSIT INSURANCE CORPORATION

      LEGAL
DIVISION

       

      BY:

       

      /s/
Pratin  Vallabhaneni

      Pratin  Vallabhaneni

      Honors
Attorney

       

       

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      


      GEORGIA
DEPARTMENT OF BANKING AND FINANCE

       

      BY:

       

      /s/
Robert M. Braswell

      Robert M.
Braswell

      Commissioner

       

      OCONEE
STATE BANK WATKINSVILLE, GEORGIA

       

      BY:

       

      /s/ G. Robert Bishop

      G.
Robert Bishop

       

      /s/ Jimmy L.
Christopher

      Jimmy L. Christopher

       

      /s/ Douglas D.
Dickens

      Douglas D. Dickens

       

      /s/ James Albert
Hale

      James Albert Hale

       

      /s/ B. Amrey
Harden

      B. Amrey Harden

       

      /s/ Henry C.
Maxey

      Henry C. Maxey

       

      /s/ Ann
B.Powers

      Ann B. Powers

       

       

       

      (continued on next page)

       

       

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

       

       

       

       

      /s/
Jerry K. Wages

      Jerry K. Wages

       

      /s/ Virginia S.
Wells

      Virginia S. Wells

       

      /s/ Tom F.
Wilson

      Tom F. Wilson

       

       

       

      THE BOARD
OF DIRECTORS

       

       

       

       

       

       

       

       

      
        
           

        

        
          21