Exhibit 10.7


 




	
  

  	
  UNITED STATES
  OF AMERICA Before the OFFICE OF THRIFT SUPERVISION In the Matter of Order
  No.: WN-10-14 FIRST FEDERAL BANCSHARES OF ARKANSAS, INC. Effective Date:
  April 14, 2010 Harrison, Arkansas OTS Docket No. H2658 STIPULATION AND
  CONSENT TO ISSUANCE OF ORDER TO CEASE AND DESIST WHEREAS, the Office of
  Thrift Supervision (OTS), acting by and through its Regional Director for the
  Western Region (Regional Director), and based upon information derived from
  the exercise of its regulatory and supervisory responsibilities, has informed
  First Federal Bancshares of Arkansas, Inc., Harrison, Arkansas, OTS Docket
  No. H2658 (Holding Company), that the OTS is of the opinion that grounds
  exist to initiate an administrative proceeding against the Holding Company
  pursuant to 12 U.S.C. § 1818(b); WHEREAS, the Regional Director, pursuant to
  delegated authority, is authorized to issue Orders to Cease and Desist where
  a savings and loan holding company has consented to the issuance of an order;
  and WHEREAS, the Holding Company desires to cooperate with the OTS to avoid
  the time and expense of such administrative cease and desist proceeding by
  entering into this Stipulation and Consent to the Issuance of Order to Cease
  and Desist (Stipulation) and, without admitting or First Federal Bancshares
  of Arkansas, Inc. Stipulation and Consent to Issuance of Order to Cease
  and Desist Page 1 of 6

  






 















	
  

  	
  denying that
  such grounds exist, but only admitting the statements and conclusions in
  Paragraphs 1 - 3 below concerning Jurisdiction, hereby stipulates and agrees
  to the following terms: Jurisdiction.
  1. The Holding Company is a “savings and loan holding company” within the
  meaning of 12 U.S.C. § 1813(w)(3) and 12 U.S.C. § 1467a. Accordingly,
  the Holding Company is a “depository institution holding company” as that
  term is defined in 12 U.S.C. § 1813(w)(1). 2. Pursuant to 12 U.S.C. §
  1818(b)(9), the “appropriate Federal banking agency” may initiate cease and
  desist proceedings against a savings and loan holding company in the same
  manner and to the same extent as a savings association for regulatory
  violations and unsafe or unsound acts or practices. 3. Pursuant to 12 U.S.C.
  § 1813(q), the Director of the OTS is the “appropriate Federal banking
  agency” with jurisdiction to maintain an administrative enforcement
  proceeding against a savings and loan holding company. Therefore, the Holding
  Company is subject to the authority of the OTS to initiate and maintain an
  administrative cease and desist proceeding against it pursuant to 12 U.S.C. §
  1818(b). OTS Findings of Fact.
  4. Based on its September 21, 2009 examination of the Holding Company,
  the OTS finds that the Holding Company has engaged in unsafe or unsound
  banking practices, including, but not limited to: (a) the Holding Company’s
  failure to identify, measure, monitor, and control specific risks to the
  Holding Company’s operations; (b) the operation of the Holding Company and
  its subsidiary insured depository institution, First Federal Bank, Harrison,
  Arkansas, OTS Docket No. 02721 First Federal Bancshares of Arkansas,
  Inc. Stipulation and Consent to Issuance of Order to Cease and Desist Page 2
  of 6

  






 















	
  

  	
  (Association),
  with inadequate capital and earnings to support its risk profile; and (c) the
  operation of the Association with an inadequate level of capital protection
  for the volume, type, and quality of assets held by the Association. Consent. 5. The Holding
  Company consents to the issuance by the OTS of the accompanying Order to
  Cease and Desist (Order). The Holding Company further agrees to comply with
  the terms of the Order upon the Effective Date of the Order and stipulates
  that the Order complies with all requirements of law. Finality. 6. The Order
  is issued by the OTS under 12 U.S.C. § 1818(b). Upon the Effective Date, the
  Order shall be a final order, effective, and fully enforceable by the OTS
  under the provisions of 12 U.S.C. § 1818(i). Waivers. 7. The Holding
  Company waives the following: (a) the right to be served with a written
  notice of the OTS’s charges against it as provided by 12 U.S.C. §
  1818(b) and 12 C.F.R. Part 509; (b) the right to an administrative
  hearing of the OTS’s charges as provided by 12 U.S.C. § 1818(b) and 12’
  C.F.R. Part 509; (c) the right to seek judicial review of the Order, including,
  without limitation, any such right provided by 12 U.S.C. § 1818(h), or
  otherwise to challenge the validity of the Order; and (d) any and all claims
  against the OTS, including its employees and agents, and any other
  governmental entity for the award of fees, costs, or expenses related to this
  OTS First Federal Bancshares of Arkansas, Inc. Stipulation and Consent to
  Issuance of Order to Cease and Desist Page 3 of 6

  






 















	
  

  	
  enforcement
  matter and/or the Order, whether arising under common law, federal statutes,
  or otherwise. OTS Authority Not
  Affected. 8. Nothing in
  this Stipulation or accompanying Order shall inhibit, estop, bar, or
  otherwise prevent the OTS from taking any other action affecting the Holding
  Company if, at any time, the OTS deems it appropriate to do so to fulfill the
  responsibilities placed upon the OTS by law. Other Governmental Actions Not Affected. 9. The Holding Company
  acknowledges and agrees that its consent to the issuance of the Order is
  solely for the purpose of resolving the matters addressed herein, consistent
  with Paragraph 8 above, and does not otherwise release, discharge,
  compromise, settle, dismiss, resolve, or in any way affect any actions,
  charges against, or liability of the Holding Company that arise pursuant to
  this action or otherwise, and that may be or have been brought by any
  governmental entity other than the OTS. Miscellaneous. 10. The laws of the United States of America
  shall govern the construction and validity of this Stipulation and of the
  Order. 11. If any provision of this Stipulation and/or the Order is ruled to
  be invalid, illegal, or unenforceable by the decision of any Court of
  competent jurisdiction, the validity, legality, and enforceability of the
  remaining provisions hereof shall not in any way be affected or impaired thereby,
  unless the Regional Director in his or her sole discretion determines
  otherwise. 12. All references to the OTS in this Stipulation and the Order
  shall also mean any of the OTS’s predecessors, successors, and assigns. 13.
  The section and paragraph headings in this Stipulation and the Order are for
  convenience First Federal Bancshares of Arkansas, Inc. Stipulation and
  Consent to Issuance of Order to Cease and Desist Page 4 of 6

  






 















	
  

  	
  only and shall
  not affect the interpretation of this Stipulation or the Order. 14. The terms
  of this Stipulation and of the Order represent the final agreement of the
  parties with respect to the subject matters thereof, and constitute the sole
  agreement of the parties with respect to such subject matters. 15. The Stipulation and Order shall
  remain in effect until terminated, modified, or suspended in writing by the
  OTS, acting through its Regional Director or other authorized representative.
  Signature of Directors/Board
  Resolution. 16. Each Director signing this Stipulation attests that he
  or she voted in favor of a Board Resolution authorizing the consent of the
  Holding Company to the issuance of the Order and the execution of the
  Stipulation. This Stipulation may be executed in counterparts by the
  directors after approval of the execution of the Stipulation at a duly called
  board meeting. A copy of the Board Resolution authorizing the execution of
  this Stipulation shall be delivered to the OTS, along with the executed
  original(s) of this Stipulation. [Remainder of Page Intentionally Left Blank] First Federal Bancshares of Arkansas, Inc. Stipulation and
  Consent to Issuance of Order to Cease and Desist Page 5 of 6

  






 















	
  

  	
  WHEREFORE, the
  Holding Company, by its directors, executes this Stipulation. Accepted by:
  FIRST FEDERAL BANCSHARES OF ARKANSAS, INC. Harrison, Arkansas OFFICE OF
  THRIFT SUPERVISION By: John P. Hammerschmidt, Chairman By: C.K. Lee Regional
  Director, Western Region Larry J. Brandt, Director and Chief Executive
  Officer Date: See Effective Date on page 1 Jeffrey L. Brandt, Director
  Frank L. Conner, Director Kenneth C. Savells, Director First Federal
  Bancshares of Arkansas, Inc. Stipulation and Consent to Issuance of
  Order to Cease and Desist Page 6 of 6