EXHIBIT 10.1


 


UNITED STATES OF AMERICA

BEFORE THE


BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

WASHINGTON, D.C.


 


	
  Written Agreement between

  	
   

  
	
   

  	
  Docket
  No. 09-171-WA/RB-HC

  
	
  THE BANK HOLDINGS

  	
   

  
	
  Reno, Nevada

  	
   

  
	
   

  	
   

  
	
  and

  	
   

  
	
   

  	
   

  
	
  FEDERAL RESERVE BANK OF

  	
   

  
	
  SAN
  FRANCISCO

  	
   

  
	
  San Francisco, California

  	
   

  



 


WHEREAS,
The Bank Holdings, Reno, Nevada (“Bank Holdings”), a registered bank holding
company, owns and controls Nevada Security Bank, Reno, Nevada (“Bank”),  a state chartered nonmember bank, and
various nonbank subsidiaries;  


 


WHEREAS,
it is the common goal of Bank Holdings and the Federal Reserve Bank of San
Francisco (the “Reserve Bank”) to maintain the financial soundness of Bank
Holdings so that Bank Holdings may serve as a source of strength to the Bank; 


 


WHEREAS,
Bank Holdings and the Reserve Bank have mutually agreed to enter into this
Written Agreement (the “Agreement”); and  


 


WHEREAS,
on November 19, 2009, the board of directors of Bank Holdings, at a duly
constituted meeting, adopted a resolution authorizing and directing Hal Giomi
to enter into this Agreement on behalf of Bank Holdings, and consenting to
compliance with each and every provision of this Agreement by Bank Holdings 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, Bank Holdings and the Reserve Bank agree as follows:


 


Dividends
and Distributions


 


1.                                       (a)                                  Bank Holdings
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)                                 Bank Holdings 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)                                  Bank Holdings
and the 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.


 


(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 Bank Holdings’ capital, earnings, and cash flow; the Bank’s
capital, asset quality, earnings, and allowance for loan and lease losses
(“ALLL”); and identification of the sources of funds for the proposed payment
or distribution. For requests to declare or pay dividends, Bank Holdings must
also demonstrate that the requested declaration or payment of dividends is
consistent with the Board


 


2

















 


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)                                  Bank Holdings
and the nonbank subsidiaries 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, the planned source(s) for debt repayment, and an analysis of the
cash flow resources available to meet such debt repayment.


 


(b)                                 Bank Holdings
shall not, directly or indirectly, purchase or redeem any shares of its stock
without the prior written approval of the Reserve Bank.


 


Capital
Plan


 


3.                                       Within 60 days
of this Agreement, Bank Holdings shall submit to the Reserve Bank an acceptable
written plan to maintain sufficient capital at Bank Holdings on a consolidated
basis, and at the Bank, as a separate legal entity on a stand-alone basis. The
plan shall, at a minimum, address, consider, and include:


 


(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;


 


3

















 


(b)                                 the adequacy of
the Bank’s capital, taking into account the volume of classified credits,
concentrations of credit, ALLL, current and projected asset growth, and projected
retained earnings;


 


(c)                                  the source and
timing of additional funds necessary to fulfill the consolidated organization’s
and the Bank’s future capital requirements;


 


(d)                                 supervisory
requests for additional capital at the Bank or the requirements of any
supervisory action imposed on the Bank by its federal or state regulator; and


 


(e)                                  the
requirements of section 225.4(a) of Regulation Y of the Board of Governors
(12 C.F.R. § 225.4(a)) that Bank Holdings serve as a source of strength to the
Bank.


 


4.                                       Bank Holdings
shall notify the Reserve Bank, in writing, no more than 30 days after the end
of any quarter in which the consolidated organization’s or the Bank’s capital
ratio (total risk-based, Tier 1, or leverage) falls below the plan’s approved
minimums. Together with the notification, Bank Holdings shall submit an
acceptable capital plan that details the steps Bank Holdings will take to
increase the consolidated organization’s or the Bank’s capital ratios to or
above the plan’s approved minimums.


 


Compliance
with Laws and Regulations


 


5.                                   (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, Bank Holdings 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.).


 


4

















 


(b)                                 Bank Holdings
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


 


6.                                       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.


 


Approval
and Implementation of Plan


 


7.                                       (a)                                  Bank Holdings
shall submit a written capital plan that is acceptable to the Reserve Bank
within the applicable time period set forth in paragraph 3 of this Agreement.


 


(b)                                 Within 10 days
of approval by the Reserve Bank, Bank Holdings shall adopt the approved capital
plan. Upon adoption, Bank Holdings shall promptly implement the approved plan,
and thereafter fully comply with it.


 


(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


 


8.                                       All
communications regarding this Agreement shall be sent to:


 


(a)                                  Mr. Kevin Zerbe


Vice President


Federal Reserve Bank of San Francisco 


101 Market Street, Mail Stop 920 


San Francisco, California 94105


 


5

















 


(b)                                 Mr. Harold Giomi 


Chairman of the Board 


The Bank Holdings 


9990 Double R Boulevard 


Reno, Nevada 89521


 


Miscellaneous


 


9.                                       Notwithstanding
any provision of this Agreement, the Reserve Bank may, in its sole discretion,
grant written extensions of time to Bank Holdings to comply with any provision
of this Agreement.


 


10.                                 The provisions
of this Agreement shall be binding upon Bank Holdings and its institution-affiliated
parties, in their capacities as such, and their successors and assigns.


 


11.                                 Each provision
of this Agreement shall remain effective and enforceable until stayed,
modified, terminated, or suspended in writing by the Reserve Bank.


 


12.                                 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 Bank Holdings, the Bank, the nonbank subsidiaries,
or any of their current or former institution-affiliated parties and their
successors and assigns.


 


6

















 


13.                                 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
         day of
                      ,
2009.


 


 


	
  THE BANK HOLDINGS

  	
   

  	
  FEDERAL RESERVE BANK OF SAN
  FRANCISCO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
					



 


7