**Exhibit 10.10**

 

|  | UNITED STATES OF AMERICA Before the OFFICE OF THRIFT SUPERVISION In the Matter of Order No.: WN-10-13 FIRST FEDERAL BANK Harrison,  Arkansas OTS Docket No. 02721 Effective Date:  April 14, 2010 ORDER TO CEASE  AND DESIST WHEREAS, First Federal Bank, Harrison, Arkansas, OTS Docket No. 02721 (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 U.S.C. §  1818(b); and WHEREAS, pursuant  to delegated authority, the OTS Regional Director  for the Western 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: Cease and Desist. 1. The Association and its directors,  officers, employees, and agents shall cease and desist from any action (alone  or with another or others) for or toward causing, bringing about, First  Federal Bank Order to Cease and Desist Page 1 of 23 |
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|  | participating  in, counseling, or the aiding and abetting of unsafe or unsound banking  practices that resulted in the Association: (a) operating the  Association with an inadequate level of capital protection for the volume,  type and quality of assets held by the Association; (b) operating the  Association with an inadequate allowance for loan and lease losses (ALLL) for the volume, type, and quality of loans held;  (c) creating concentrations of credit without adequate and effective  risk management policies and procedures; and (d) operating the  Association with inadequate internal review policies or procedures with  respect to loan assets. 2. The Association and its directors, officers,  employees, and agents shall also cease and desist from any action (alone or  with another or others) for or toward causing, bringing about, participating  in, counseling, or the aiding and abetting of violations of the following  regulations: (a) 12 C.F.R. § 560.30 (Limitations on  Investments in Real Estate); (b) 12 C.F.R. §  560.101 (Real Estate Lending Standards); and (c) 12 C.F.R.  Part 564 (Appraisal Requirements). Capital. 3. (a) By  December 31, 2010, the Association shall have and thereafter maintain a  Tier 1 (Core) Capital Ratio equal to or greater than eight percent (8%) and a  total risk-based capital ratio equal to or greater than twelve percent (12%).  (b) The requirement in Paragraph 3(a) to meet and maintain a specific  capital level means that the Association may not be deemed to be  “well-capitalized” for purposes of 12 U.S.C. § 1831o  and 12 C.F.R. § 565.4(b)(1)(iv).  4. By June 30, 2010, the Association shall submit a written plan to  achieve and maintain First Federal Bank Order to Cease and Desist Page 2 of  23 |
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|  | the Association’s  capital at the levels prescribed in Paragraph 3 (Capital Plan) that is  acceptable to the Regional Director. At a minimum, the Capital Plan shall:  (a) address the amount of additional capital that will be necessary to meet  the capital requirements of Paragraph 3 under a best-case scenario, a  worst-case scenario, and a most probable case scenario involving progressively  stressed economic environments; (b) address the requirements and restrictions  imposed by this Order; (c) address the comments and incorporate all  recommended corrective actions related to capital adequacy contained in the OTS’s September 21, 2009 Report of Examination  (ROE); (d) address the Association’s level of classified assets, ALLL, earnings, asset concentrations, liquidity needs,  and trends in these areas; (e) address current and projected trends in real  estate market conditions; (f) detail the Association’s capital preservation  and enhancement strategies with specific narrative goals; and (g) identify  the specific sources of additional capital and the timeframes and methods by  which additional capital will be raised, including specific target dates and  capital levels. 5. Upon receipt of written notification from the Regional  Director that the Capital Plan is acceptable, the Association shall  immediately implement the Capital Plan. 6. Within thirty (30) days after the  end of the month, beginning with the month ending June 30, 2010, the  Board shall review a report regarding the Association’s compliance with the  Capital Plan (Capital Plan Variance Report). The Board’s review, at a  minimum, shall include: (a) a comparison of actual operating results to  projected results; First Federal Bank Order to Cease and Desist Page 3 of 23 |
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|  | (b) detailed explanations of any material deviations(l); and  (c) a discussion of specific corrective actions or measures that have been or  will be implemented to address each material deviation. The Board’s review of  the Capital Plan Variance Report shall be fully documented in the Board  meeting minutes. A copy of the meeting minutes detailing the Board’s review  and a copy of the Capital Plan Variance Report shall be provided to the  Regional Director within fifteen (15) days after the Board meeting. 7. The  Association shall notify the Regional Director regarding any material event  adversely affecting or that may affect adversely the capital or capital  projections of the Association within two (2) days after such event. 8.  Within thirty (30) days after: (a) the Association fails to meet the  capital requirements prescribed in Paragraph 3 of this Order; (b) the  Association fails to comply with the Capital Plan prescribed in Paragraph 4  of this Order; or (c) any request from the Regional Director, the  Association shall submit a written Contingency Plan that is acceptable to the  Regional Director. 9. The Contingency Plan shall detail the actions to be  taken, with specific time frames, to achieve one of the following results by  the later of the date of receipt of all required regulatory approvals or  sixty (60) days after the implementation of the Contingency Plan:  (a) merger with, or acquisition by another federally insured depository  institution or holding company thereof; or (b) voluntary liquidation by  filing an appropriate application with the OTS in  conformity with federal laws and regulations. (1) A deviation shall be considered material under this Paragraph of  the Order when the Association: (a) engages in any activity, line of  business, or operation that is inconsistent with the Capital Plan;  (b) exceeds the level of any activity or growth contemplated in the  Capital Plan by more than ten percent (10%); or (c) falls below or fails  to meet the target amounts established in the Capital Plan by more than ten  percent (10%). First Federal Bank Order to  Cease and Desist Page 4 of 23 |
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|  | 10. Upon  receipt of written notification from the Regional Director to implement the  Contingency Plan, the Association shall implement the Contingency Plan  immediately. The Association shall provide the Regional Director with written  status reports detailing the Association’s progress in implementing the  Contingency Plan on the first (1st) and fifteenth (15th) of each month  following the implementation of the Contingency Plan. Growth. 11. Effective immediately, 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 prior quarter without  the prior written notice of non-objection of the Regional Director. The  growth restriction imposed by this Paragraph shall remain in effect until the  Regional Director has notified the Association in writing that its Business  Plan submitted pursuant to Paragraph 12 of this Order is acceptable. Business Plan. 12. By June 30,  2010, the Association shall submit a new business plan and budget for the  remainder of the calendar year 2010 and calendar years 2011 and 2012 (Business  Plan) that is acceptable to the Regional Director. Thereafter, the  Association shall submit a revised two year Business Plan at least sixty (60)  days prior to the end of each calendar year. At a minimum, the Business Plan  shall include: (a) plans and strategies to restructure the Association’s  operations, to improve the Association’s earnings, reduce expenses, and  achieve positive core income; (b) strategies for ensuring that the  Association has the financial and personnel resources necessary to implement  and adhere to the Business Plan; First Federal Bank Order to Cease and Desist  Page 5 of 23 |
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|  | (c) quarterly pro forma financial projections (balance sheet,  capital forecasts, and income statement); and (d) identification of all  relevant assumptions made in formulating the Business Plan. 13. Upon receipt  of written notification from the Regional Director that the Business Plan is  acceptable, the Association shall implement and adhere to the Business Plan.  The Association shall retain all documentation supporting assumptions  addressed in Paragraph 12(d) of the Order. 14. Any material modification(2) to the Business Plan must receive the  prior written notice of non-objection of the Regional Director. The  Association shall submit any proposed material modifications to the Regional  Director at least forty-five (45) days prior to implementation. 15. Within  thirty (30) days after the end of each quarter, beginning with the quarter  ending June 30, 2010, the Board shall review quarterly variance reports  on the Association’s compliance with the Business Plan (Quarterly Variance  Reports). The Quarterly Variance Reports shall: (a) identify material  variances in the Association’s actual performance during the preceding  quarter as compared to the projections set forth in the Business Plan; (b)  contain and analysis and explanation of identified variances; and (c) discuss  the specific measures taken or to be taken to address identified variances.  16. The Board’s review of the Quarterly Variance Reports, assessment of the  Association’s compliance with the Business Plan, and any corrective actions  taken or to be taken by the Board shall be fully documented in the Board  meeting minutes. A copy of the Quarterly Variance (2) A modification shall be considered material under this Paragraph  of the Order if the Association plans to: (a) engage in any activity  that is inconsistent with the Business Plan; or (b) exceed the level of  any activity contemplated in the Business Plan or fail to meet target amounts  established in the Business Plan by more than ten percent (10%), unless the  activity involves assets risk-weighted fifty percent (50%) or less, in which  case a variance of more than twenty-five percent (25%) shall be deemed to be  a material modification. First Federal  Bank Order to Cease and Desist Page 6 of 23 |
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|  | Reports and the  Board meeting minutes detailing the Board’s review shall be provided to the  Regional Director within fifteen (15) days after the Board meeting. Brokered Deposits. 17. Effective immediately, the Association shall comply with  the requirements of 12 C.F.R. § 337.6(b). 18.  Effective immediately, the Association shall develop an internal system to  monitor the interest rates offered on all interest bearing accounts to ensure  compliance with 12 C.F.R. § 337.6(b). Liquidity Management. 19. Effective immediately, the Association shall review its  liquidity position and prepare a liquidity report each business day (Daily  Liquidity Report) in a format acceptable to the Regional Director. The Daily  Liquidity Report shall set forth the uses and sources of funds for the  Association’s operations and cash flow projections for a one hundred and  eighty (180) day period. The Association shall submit each Daily Liquidity  Report to the Regional Director and the Association’s Asset/Liability  Committee by the close of business on the next business day. 20. Effective  immediately, at each Board meeting, the Board shall review a written summary  of the Daily Liquidity Reports. The Board’s review and any corrective actions  required by the Board shall be fully documented in the Board meeting minutes.  Dividends. 21. Effective immediately, the Association shall not declare or  pay dividends or make any other capital distributions, as that term is  defined in 12 C.F.R. § 563.141, without receiving  the prior written approval of the Regional Director. The Association’s  written request for written First Federal Bank Order to Cease and Desist Page  7 of 23 |
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|  | approval shall be  submitted to the Regional Director at least forty-five (45) days prior to the  anticipated date of the proposed declaration, dividend payment, or  distribution of capital. Lending Restrictions. 22. Effective  immediately, except with the prior written notice of non-objection of the  Regional Director, the Association shall not make, purchase, or commit to  make or purchase a new commercial real estate (CRE)  loan or an extension of credit for the purpose of land acquisition,  development, and/or construction, except for the construction of an  owner-occupied one-to-four family dwelling with at least twenty percent (20%)  down payment or that is subject to a binding pre-sold commitment. 23.  Effective immediately, except with the prior written notice of non-objection  of the Regional Director, the Association shall not make, purchase, or  refinance or commit to make, purchase, or refinance an extension of credit if  any of the proceeds of the loan will be used for the payment of interest on  any loan or will be used for the establishment of an interest carry reserve  on a loan. 24. Effective immediately, except with the prior written notice of  non-objection of the Regional Director, the Association shall not make or  purchase, or commit to make or purchase an extension of credit that is in  excess of the supervisory loan-to-value limits set forth in the Appendix to  12 C.F.R. § 560.101. Asset Classification. 25. Effective immediately, the Association shall evaluate and  classify its assets and establish ALLL and specific  valuation allowances in accordance with applicable laws, regulations, and regulatory  guidance. First Federal Bank Order to Cease and Desist Page 8 of 23 |
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|  | 26. Within  twenty-five (25) days after the end of each quarter, beginning with the  quarter ending March 31, 2010, Management(3) shall  submit to the Board a written report setting forth the ALLL  analysis for the Association’s assets and all assumptions used to determine  the adequacy of the ALLL, given current economic  conditions and the Association’s risk profile (Quarterly ALLL  Analysis Report). Any deficiency in the ALLL shall  be remedied by the Association in the quarter in which it was discovered and  before the Association files its Thrift Financial Report with the OTS. The Board’s review of the Quarterly ALLL Analysis Report, including all qualitative factors  considered in determining the adequacy of the Association’s ALLL, shall be fully documented in the Board meeting  minutes. Within thirty (30) days after the end of each quarter, beginning  with the quarter ending March 31, 2010, the Association shall submit to  the Regional Director a copy of the Quarterly ALLL  Analysis Report and the Board meeting minutes reflecting the review of the  Quarterly ALLL Analysis Report. Internal Asset Review Program. 27. Effective immediately, the Association shall implement and  maintain an internal asset review program independent of the loan  underwriting and approval functions to: (a) identify and grade loans  with potential credit weaknesses in accordance with applicable regulations  and regulatory guidance regarding internal asset reviews, and  (b) require monthly reviews by the Board that are documented in the  Board meeting minutes. The internal asset review required by this Paragraph  of the Order shall cover one hundred percent (100%) of criticized assets(4) and one hundred percent (100%) of all nonhomogeneous loans and borrower relationships exceeding  five hundred thousand dollars ($500,000) in the portfolio during a calendar  year. (3) For purposes of this Order, the term “Management” is defined as  one or more Senior Executive Officers and the term “Senior Executive Officer”  is defined at 12 C.F.R. § 563.555.(4) The term “criticized assets” shall include classified assets,  assets designated special mention, all nonperforming assets, and all  delinquent loans. First Federal  Bank Order to Cease and Desist Page 9 of 23 |
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|  | 28. By  April 1, 2010, the Board shall engage a qualified independent consultant  (IAR Consultant) acceptable to the Regional  Director to perform an on-site internal asset review and analyses of the  following assets on the Association’s books as of December 31, 2009:  (a) all non-owner occupied mortgage loans exceeding two hundred fifty  thousand dollars ($250,000); (b) all other nonhomogeneous  loans exceeding five hundred thousand dollars ($500,000); and (c) all  homogeneous loans designated as Special Mention or Watch exceeding five  hundred thousand dollars ($500,000). 29. By May 31, 2010, the IAR Consultant shall prepare a report with respect to the  analysis prescribed by Paragraph 27 (IAR Report) to  submit to the Board. The IAR Report shall: (a) be  based on analysis independent of the loan underwriting and approval  functions; (b) identify and grade the loans in the categories set forth in  Paragraph 28 with potential credit weaknesses; (c) assess the adequacy of,  and adherence to internal loan policies; (d) conform to applicable  regulations and regulatory guidance; and (e) shall include the following  information for each such identified loan that is a criticized asset: (i) the loan number, the borrower’s name, date of the  loan, and book balance; (ii) the date(s) of payments due, any last  payment made, and the date(s) of any extension or modification; (iii) a  description of the collateral and condition of security collateral; (iv) the  most recent appraised or fair value of the collateral, the date of this  valuation, the findings from any property inspections, and an analysis of the  appraisal and collateral valuation for deficiencies under applicable  regulations and First Federal Bank Order to Cease and Desist Page 10 of 23 |
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|  | regulatory  guidance; (v) an analysis of the borrower’s and/or guarantor’s current  financial condition, including, but not limited to, the borrower’s ability to  service the debt and other debts and, where applicable, the borrower’s  ability to service all loans; (vi) the identification of any significant loan  underwriting, documentation, or administration deficiencies under the  Association’s loan policies and applicable laws, regulations, and regulatory  guidance; (vii) the current asset classification category and the rationale  for the asset classification category and the date of the initial  classification; (viii) the amount of specific valuation allowances,  charge-offs, and the analysis of impairment of loans under generally accepted  accounting principles; and (ix) the identification of troubled debt  restructuring under the applicable regulations and regulatory guidance; and (f)  shall include the following information for each such identified loan that is  not a criticized asset: (i) the loan number, the  borrower’s name, date of the loan, and book balance; (ii) a description of  the collateral and condition of security collateral; (iii) the value of the  collateral; (iv) an analysis of the borrower’s and/or guarantor’s current  financial condition, including, but not limited to, the borrower’s ability to  service the debt and other debts and, where applicable, the borrower’s  ability to service all loans; (v) the identification of any significant loan  underwriting, documentation, or administration deficiencies under the Association’s  loan policies and applicable First Federal Bank Order to Cease and Desist  Page 11 of 23 |
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|  | laws, regulations,  and regulatory guidance; (vi) the current asset classification category;  (vii) the amount of specific valuation allowances, charge-offs, and the  analysis of impairment of loans under generally accepted accounting  principles; and (viii) the identification of troubled debt restructuring  under the applicable regulations and regulatory guidance. 30. By  June 30, 2010, the Board shall review the IAR  Report and the Association shall submit a copy of the IAR  Report and a certified copy of the Board meeting minutes reflecting its  review of the IAR Report to the Regional Director. Reduction of Classified Assets. 31. By June 30, 2010, the Association shall submit a  comprehensive Classified Asset Reduction Plan to reduce(5) classified  assets that is acceptable to the Regional Director. The Classified Asset  Reduction Plan, at a minimum, shall include: (a) targets for the level of  classified assets as a percentage of Tier 1 (Core) capital and ALLL and the timeframe for each such target; (b) a  description of the manner of, and methods for, reducing the Association’s  level of classified assets to the targets set forth therein; and (c) all  relevant assumptions and projections based on a best-case scenario, a worst-case  scenario, and a most probable case scenario, and documentation supporting  such assumptions and projections. (5) For purposes of this Paragraph, the term “reduce” means to  collect, sell, charge off, or improve the quality of the asset sufficient to  warrant its removal from adverse criticism or classification. First Federal Bank Order to Cease and Desist Page 12 of 23 |
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|  | 32. Within  thirty (30) days after receipt of written notification from the Regional  Director that the Classified Asset Reduction Plan is acceptable, the  Association shall immediately implement the Classified Asset Reduction Plan.  33. Any material modification(6) to the  Classified Asset Reduction Plan must receive the prior written notice of  non-objection of the Regional Director. The Association shall submit proposed  material modifications to the Classified Asset Reduction Plan to the Regional  Director at least sixty (60) days prior to implementation. 34. Within thirty  (30) days after the end of each month, beginning with the month ending  July 31, 2010, Management shall submit to the Board a written status  report regarding the implementation of the Classified Asset Reduction Plan  (Monthly Classified Asset Reduction Report). Each Monthly Classified Asset  Reduction Report shall: (a) set forth the Association’s efforts to  reduce the Association’s level of classified assets during that month; and  (b) report and explain in detail any variances of actual operating  results from the targets set forth in the Classified Asset Reduction Plan.  The Board’s review of the Monthly Classified Asset Reduction Report shall be  fully documented in the Board meeting minutes, which also shall set forth the  corrective actions and/or measures that have been implemented, proposed, or  under consideration to correct any deviation to the Classified Asset  Reduction Plan. Supervisory  Loan-to-Value Limitations. 35. By June 30, 2010, the Association  shall submit a plan to reduce the aggregate amount of all loans in excess of  the supervisory loan-to-value limits set forth in the Appendix to 12 C.F.R. § (6) For purposes of this Paragraph of the Order, a modification  shall be considered material if the Association failed to meet targets  established in the Classified Asset Reduction Plan by more than ten percent  (10%). First Federal Bank Order to Cease and  Desist Page 13 of 23 |
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|  | 560.101 that is acceptable to the Regional Director (LTV Plan).  The LTV Plan, at a minimum, shall include: (a) targets for the aggregate amount  of all loans in excess of such supervisory loan-to-value limits; (b) targets  for the aggregate amount of all commercial loans, agricultural loans,  multifamily loans, or loans secured by properties other than owner occupied  one-to-four family residential properties in excess of such supervisory  loan-to-value limits; (c) a description of the manner of, and the methods  for, reducing the Association’s level of loans in excess of such supervisory  loan-to-value limits to the targets set forth therein; and (d) all relevant  assumptions and projections based on a best-case scenario, a worst-case  scenario, and a most probable scenario, and documentation supporting such  assumptions and projections. 36. Within ten (10) days after receipt of  written notification from the Regional Director that the LTV Plan is  acceptable, the Association shall implement the LTV Plan. 37. Any material modification(7) to the LTV Plan must receive the  prior written notice of non-objection of the Regional Director. The  Association shall submit proposed material modifications to the LTV Plan to  the Regional Director at least sixty (60) days prior to implementation. 38.  Within thirty (30) days after the end of each month, beginning with the month  ending July 31, 2010, Management shall submit to the Board a written  status report regarding the implementation of the LTV Plan (Monthly LTV  Report). Each Monthly LTV Report shall: (a) First Federal Bank Order to Cease  and Desist Page 14 of 23 |
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|  | set forth the  Association’s efforts to reduce the Association’s level of loans in excess of  supervisory loan-to-value limits during that month; and (b) report and  explain in detail any variances of actual operating results from the targets  set forth in the LTV Plan. The Board’s review of the Monthly LTV report shall  be fully documented in the Board meeting minutes, which also shall set forth  the corrective actions and /or measures that have been implemented, proposed,  or under consideration to correct any deviation to the LTV Plan. Real Estate Investments. 39. By May 31, 2010, the Board shall submit to the  Regional Director a certified written report regarding the real estate  transactions and real estate transfer transactions conducted from the period  from January 1, 2008 through January 31, 2010 that do not comply  with the requirements of 12 U.S.C. § 1464 and 12 C.F.R. § 560.30 (Real Estate Investments Report). 40. By  April 30, 2010, the Association shall ensure that all transactions  conducted by the Association are permissible in accordance with applicable laws  and regulations, including, but not limited to, 12 U.S.C.  § 1464 and 12 C.F.R. § 560.30. 41. By June 30,  2010, the Association shall submit a plan to divest any asset listed in the  Real Estate Investments Report that is acceptable to the Regional Director  (Real Estate Divestiture Plan). 42. Within ten (10) days after receipt  of written notification from the Regional Director that the Real Estate  Divestiture Plan is acceptable, the Association shall implement the Real  Estate Divestiture Plan. 43. Within thirty (30) days after the end of each  month, beginning with the first month after implementation of the Real Estate  Divestiture Plan, the Association shall submit a written report to the  Regional Director regarding compliance with the Real Estate Divestiture Plan.  First Federal Bank Order to Cease and Desist Page 15 of 23 |
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|  | 44. Any  material modification to the Real Estate Divestiture Plan must receive the  prior written notice of non-objection of the Regional Director. The  Association shall submit proposed material modifications to the Real Estate  Divestiture Plan to the Regional Director at least sixty (60) days prior to  implementation. Commercial Real Estate Concentration Risk. 45. By June 30, 2010, the Association shall submit a  Commercial Real Estate Concentration Plan (CRE  Concentration Plan) that is acceptable to the Regional Director. The CRE Concentration Plan shall, at a minimum, address: (a)  the reduction of the amount of Association’s existing CRE  loans to two hundred percent (200%) or less of Tier 1 (Core) capital and ALLL within a timeframe satisfactory to the Regional  Director; (b) the reduction of each category of assets within the CRE portfolio to one hundred percent (100%) or less of  Tier 1 (Core) capital and ALLL; (c) the time frames  for reaching each such target; and (d) the assessment, monitoring, and  control of the risks associated with the Association’s CRE  portfolio in accordance with applicable regulatory guidance. 46. Within  thirty (30) days of receipt of written notification from the Regional  Director that the CRE Concentration Plan is  acceptable, the Association shall immediately implement the CRE Concentration Plan. 47. Any material modification(8) to the CRE  Concentration Plan must receive the prior written notice of non-objection of  the Regional Director. The Association shall submit proposed (8) For purposes of  this Paragraph of the Order, a modification shall be considered material if  the Association failed to meet targets established in the CRE  Concentration Plan by more than ten percent (10%). First Federal Bank Order to Cease and Desist Page 16 of 23 |
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|  | material modifications  to the CRE Concentration Plan to the Regional  Director at least sixty (60) days prior to implementation. 48. Within forty-five (45) days  after the end of each quarter, beginning with the quarter ending  June 30, 2010, Management shall provide to the Board a written report  (Quarterly CRE Concentration Reduction Report)  that: (a) sets forth the Association’s efforts to reduce the  Association’s concentration in CRE loans during  that quarter in accordance with the targets set forth in the CRE Concentration Plan; and (b) reports and explains  in detail the variances of actual operating results from the targets set  forth in the CRE Concentration Plan for the reduction  of CRE loans. The Board’s review of each Quarterly CRE Concentration Reduction Plan and any corrective  action adopted by the Board shall be fully documented in the Board meeting  minutes. Transactions  with Affiliates. 49. Effective  immediately, the Association shall not engage in any transaction with an  affiliate unless, with respect to each such transaction, the Association has  complied with the notice requirements set forth in 12 C.F.R.  § 563.41(c)(4), which shall include the information  set forth in 12 C.F.R. § 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 C.F.R. § 563.41 and Regulation W, 12 C.F.R.  Part 223. Third  Party Contracts. 50. 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 Association(9) or outside the  Association’s normal course of business unless, with (9) 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. First Federal Bank Order to Cease and Desist Page 17 of 23 |
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|  | respect to each such  contract, the Association has: (a) provided the Regional Director with a  minimum of sixty (60) days prior written notice of such arrangement or  contract; (b) determined that the arrangement or contract complies with  the standards and guidelines set forth in OTS  Thrift Bulletin 82a; and (c) received written notice of non-objection  from the Regional Director. Employment  Contracts and Compensation Arrangements. 51. Effective immediately,  the Association shall not enter into, renew, extend, or revise any  contractual arrangement relating to compensation or benefits for any Senior  Executive Officer or director of the Association, unless it first provides  the Regional Director with not less than sixty (60) days prior written notice  of the proposed transaction. The notice to the Regional Director shall  include a copy of the proposed employment contract or compensation  arrangement or a detailed, 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 the Regional Director fully complies with the  requirements of 12 C.F.R. Part 359, 12 C.F.R. §§ 563.39 and 563.161(b), and 12 C.F.R. Part 570 — Appendix A. 52. Effective  immediately, the Association shall not increase any salaries, bonuses, or  director’s fees or make any similar payments, directly or indirectly, to the  Association’s directors or Senior Executive Officers without prior written  notice of non-objection from the Regional Director. First Federal Bank Order  to Cease and Desist Page 18 of 23 |
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|  | Severance and Indemnification Payments. 53. Effective immediately, the Association shall not make any  golden parachute payment(10)° or any prohibited indemnification payment(11)  unless, with respect to each such payment, the Association has complied with  the requirements of 12 C.F.R. Part 359 and, as  to indemnification payments, 12 C.F.R. § 545.121. Directorate and Management Changes. 54. Effective immediately, the Association shall comply with  the prior notification requirements for changes in directors and Senior  Executive Officers set forth in 12 C.F.R.  Part 563, Subpart H. Management Study. 55. By  April 30, 2010, the Association shall retain an independent third party  consultant (Management Consultant) acceptable to the Regional Director to  conduct a review of supervision of the Association’s lending operations by  the Board and Management (Management Study). 56. The Management Study shall  be completed within sixty (60) days after the Regional Director deems the  third party consultant and the engagement acceptable. The Management Study  shall, at a minimum, include: (a) the identification of present and future  staffing requirements for the lending operations of the Association; (b) an  evaluation of the performance of Management with respect to the Association’s  lending operations, including an assessment of whether compensation is (10) The term  “golden parachute payment” is defined at 12 C.F.R.  § 359.1(f)(11) The term “prohibited indemnification payment” is defined at 12 C.F.R. § 359.1(1). First Federal  Bank Order to Cease and Desist Page 19 of 23 |
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|  | commensurate  with job performance and responsibilities in compliance with 12 C.F.R. § 563.161(b); (c) the establishment of standards  by which Management’s effectiveness in the Association’s lending operations  will be measured; (d) an assessment of (i) the  adequacy of communication regarding the Association’s lending operations  between Management and the Board, and (ii) the quality and timeliness of  reporting to the Board; and (e) recommendations on whether to expand the  scope, frequency, and sufficiency of information regarding the Association’s lending  operations provided to the Board by Management. 57. By July 30, 2010,  the Board shall adopt a written plan to address any identified weaknesses or  deficiencies noted in the Management Study (Management Plan). Within fifteen  (15) days after Board meeting, the Association shall provide the Regional  Director with a copy of the Management Plan and Board meeting minutes  reflecting the Board’s review of, and actions taken with respect to the  Management Study. Remediation of ROE  Comments. 58. By June 30, 2010, the Association shall ensure that  all Matters Requiring Board Attention and Corrective Actions noted in the  ROE, which are not addressed by this Order, are adequately completed. The  minutes of each Board meeting subsequent to April 30, 2010 shall document  each specific action adopted, the completion of each corrective action, and  the measures implemented to prevent recurrence of the violation of laws and  regulations, unsafe or unsound practices, or deficiencies. First Federal Bank  Order to Cease and Desist Page 20 of 23 |
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|  | Compliance with Order. 59. Within  thirty (30) days after the end of each month, beginning with the month ending  March 31, 2010, the Board shall adopt a Board resolution (Compliance  Resolution), formally resolving that the Association has complied with each  provision of this Order currently in effect during the immediately preceding  month, except as otherwise stated. The Compliance Resolution shall:  (a) specify in detail any instance of noncompliance with the Order;  (b) set forth the corrective action initiated or taken in each instance  of noncompliance; and (c) identify all notices of exemption or  non-objection issued by the Regional Director. Within fifteen (15) days of  the Board meeting at which the Compliance Resolution was adopted, the  Association shall provide a copy of each Compliance Resolution to the  Regional Director. Effective Date, Incorporation of Stipulation. 60. 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. 61. This Order shall remain in effect until terminated,  modified, or suspended by written notice of such action by the OTS, acting by and through its authorized  representatives. Time Calculations. 62.  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. 63. The Regional Director, or an OTS  authorized representative, 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. First Federal Bank Order to Cease and  Desist Page 21 of 23 |
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|  | Submissions and Notices. 64. All submissions, including any  reports, to the OTS that are required by or  contemplated by this Order shall be submitted within the specified  timeframes. 65. 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 the OTS: Regional  Director C.K. Lee Attn: Vivian Carlton, Assistant  Director 225 E. John Carpenter Freeway, Suite 500 Irving, Texas  75062-2326 Fax No. (972) 277-9501 (b) To the Association: Larry J.  Brandt, Chairman and Chief Executive Officer First Federal Bank 1401 Highway  62-65 North Harrison, Arkansas 72601-4226 Fax No. (870) 365-8355 No Violations Authorized. 66. 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. First Federal Bank Order to Cease and Desist Page  22 of 23 |
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|  | IT IS SO ORDERED. OFFICE OF THRIFT SUPERVISION By: C.K.  Lee Regional Director, Western Region Date: See  Effective Date on page 1 First Federal Bank Order to Cease and Desist  Page 23 of 23 |
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