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

  






 















	
  

  	
  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
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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

  






 















	
  

  	
  (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

  






 















	
  

  	
  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

  






 















	
  

  	
  (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

  






 















	
  

  	
  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

  






 















	
  

  	
  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

  






 















	
  

  	
  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 

  






 















	
  

  	
  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

  






 















	
  

  	
  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

  






 















	
  

  	
  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

  






 















	
  

  	
  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

  






 















	
  

  	
  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

  






 















	
  

  	
  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

  






 















	
  

  	
  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

  






 















	
  

  	
  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

  






 















	
  

  	
  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

  






 















	
  

  	
  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 

  






 















	
  

  	
  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
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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  

  






 















	
  

  	
  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

  






 















	
  

  	
  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