EX-10.1






FEDERAL DEPOSIT INSURANCE CORPORATION

WASHINGTON, D.C.




	 	 	 	 	 	 	 	 	 
	In the Matter of	 	))))))))	 	CONSENT ORDER
	FIRSTBANK OF PUERTO RICO	 	 	 	 	 	FDIC-10-068b
	SANTURCE, PUERTO RICO	 	 	 	 	 	 	 	 
	(INSURED STATE NONMEMBER BANK)	 	 	 	 	 	 	 	 






The Federal Deposit Insurance Corporation (“FDIC”) is the appropriate Federal banking agency
for Firstbank of Puerto Rico, Santurce, Puerto Rico, (“Bank”), under 12 U.S.C. § 1813(q).



The Bank, by and through its duly elected and acting Board of Directors (“Board”), has
executed a “Stipulation to the Issuance of a Consent Order” (“Stipulation”), dated June 1, 2010
that is accepted by the FDIC. With the Stipulation, the Bank has consented, without admitting or
denying any charges of unsafe or unsound banking practices or violations of law or regulation
relating to weaknesses in capital, asset quality, liquidity, management and Board oversight,
earnings and sensitivity to market risk, to the issuance of this Consent Order (“Order”) by the
FDIC.



Having determined that the requirements for issuance of an order under 12 U.S.C. § 1818(b)
have been satisfied, the FDIC hereby orders that:



MANAGEMENT




(a) During the life of this ORDER, the Bank shall have and retain qualified management.
Management shall be provided the necessary written authority to implement the provisions of this
ORDER. The qualifications of management shall be assessed on its ability to:




	 	(i)	 	comply with the requirements of this ORDER;






	 	(ii)	 	comply with applicable laws, rules, and regulations, and






	 	(iii)	 	restore all aspects of the Bank to a safe and sound condition,
including capital adequacy, asset quality, management effectiveness, earnings,
liquidity, and sensitivity to market risk.





(b) The Bank shall notify the Regional Director in writing of any additions, resignations
or terminations of any members of its Board or any of its “senior executive officers” (as that term
is defined in section 303.101(b) of the FDIC’ Rules and Regulations, 12 C.F.R. § 303.101(b))
within 10 days of the event. Any notification required by this subparagraph shall include a
description of the background(s) and experience of any proposed replacement personnel and must be
received at least 30 days prior to the individual(s) assuming the new position(s). The Bank shall
also establish procedures to ensure compliance with section 32 of the Act, 12 U.S.C. § 1831i, and
Subpart F of Part 303 of the FDIC’s Rules and Regulations, 12 C.F.R. Part 303.




BOARD OF DIRECTORS



As of the effective date of this ORDER, the Board shall increase its participation in the
affairs of the Bank, assuming full responsibility for the approval of sound policies and objectives
and for the supervision of all of the Bank’s activities, consistent with the role and expertise
commonly expected for directors of Banks of comparable size. This participation shall include
meetings to be held no less frequently than monthly at which, at a minimum, the following areas
shall be reviewed and approved: reports of income and expenses; new, overdue, renewal, insider,
charged off, and recovered loans, including a continuous assessment of any emerging problems in the
Bank’s commercial, construction and commercial real estate (“CRE”) loan portfolios; investment
activity; budget and liquidity management; adoption or modification of operating policies;
individual committee reports; audit reports; internal control reviews including managements’
responses; reconciliation of general ledger accounts; and compliance with this ORDER. Board
minutes shall document these reviews and approvals, including the names of any dissenting
directors.



CAPITAL



3. (a) Within 30 days from the effective date of this ORDER, the Board shall develop a written
capital plan (“Capital Plan”), subject to review and approval of the Regional Director, that
details the manner in which the Bank will achieve a leverage ratio of at least 8%, a Tier 1
risk-based capital ratio of at least 10% and a total risk-based capital ratio of at least 12% (as
defined in Part 325 of the FDIC’s Rules and Regulations, 12 C.F.R. Part 325). At a minimum, the
Capital Plan shall include specific benchmark leverage, Tier 1 risk-based capital and total
risk-based capital ratios to be achieved at each calendar quarter end until the full achievement of
the required capital levels. The Bank shall comply with the FDIC’s Statement of Policy on
Risk-Based Capital found in Appendix A to Part 325 of the FDIC Rules and Regulations, 12 C.F.R.
Part 325, App. A.



(b) In the event any capital ratio is or falls below the minimum required by the
approved Capital Plan, the Bank shall immediately notify the Regional Director and



(i) within 45 days shall increase capital in an amount sufficient to comply with the ratios as
set forth in the approved Capital Plan, or



(ii) within 45 days submit to the Regional Director a contingency plan for the sale, merger,
or liquidation of the Bank in the event the primary sources of capital are not available.




	 	(c)	 	The Capital Plan required by this provision shall be submitted to the
Regional





Director for non-objection. Within 30 days of receipt of any objections from the Regional
Director, and after incorporation and adoption of all objections or comments, the Board shall
approve the plan, which approval shall be recorded in the minutes of the meeting of the Board.
Thereafter, the Bank shall implement and fully comply with the Capital Plan.



LOAN POLICY




4. (a) Within 90 days from the effective date of this ORDER, the Board shall review and revise the
Bank’s written loan policies and procedures to address the comments and criticisms in the Report of
Examination dated as of June 30, 2009 issued jointly by the FDIC and the Office of the Commissioner
of Financial Institutions for the Commonwealth of Puerto Rico (“Report of Examination”) and abate
any additional loan deterioration. The Bank’s revised loan policies and procedures shall be
provided to the Regional Director for review and comment. Within 30 days of receipt of any comment
from the Regional Director, and after consideration of any recommended changes, the Board shall
approve the loan policies and procedures, which approval shall be recorded in the Board minutes.
Thereafter, the Bank shall implement and fully comply with the revised loan policies. In the event
the Bank considers making a loan that would not conform with the Bank’s loan policies, the loan
shall receive prior review and approval by the Board. The reason for non-conformance and the
Board’s prior review and approval shall be documented in the Board minutes and in the loan file for
that loan.




	 	(b)	 	The initial revisions to the Bank’s loan policy required by this paragraph, at
a





minimum, shall include provisions:



(i) requiring a non-accrual policy in accordance with the Federal FinancialInstitutions
Examination Council’s (“FFIEC”) Instructions for the Consolidated Reports of Condition and Income;
and




	 	(ii)	 	requiring the prudent use of interest reserves
in accordance with Managing





Commercial Real Estate Concentrations in a Challenging Environment (FIL-22-2008, issued March 17,
2008).



INDEPENDENT LOAN REVIEW




5. (a) Within 30 days from the effective date of this ORDER, the Board shall ensure that the Bank
operates under an adequate and effective program of independent loan review that will provide for a
periodic review of the Bank’s loan portfolio and the identification and categorization of problem
credits.



(b) At a minimum, the program shall provide for:



(i) prompt identification of loans with credit weaknesses that warrant the special attention
of management, including the name of the borrower, amount of the loan, reason why the loan warrants
special attention, and assessment of the degree of risk that the loan will not be fully repaid
according to its terms;



(ii) prompt identification of all outstanding balances and commitments attributable to each
obligor identified under the requirements of subparagraph (i), including outstanding balances and
commitments attributable to related interests of such obligors, including the obligor of record,
relationship to the primary obligor identified in subparagraph (i), and an assessment of the risk
exposure from the aggregate relationship;



(iii) identification of trends affecting the quality of the loan portfolio and potential
problem areas;




	 	(iv)	 	assessment of the overall quality of the loan portfolio;






	 	(v)	 	identification of credit and collateral documentation
exceptions;






	 	(vi)	 	identification and status of violations of law, regulations,
policies with respect to the lending function;






	 	(vii)	 	identification of loans that are not in conformance with the
Bank’s lending





policy, including real estate loans that fall outside the Bank’s own internal loan-to-value limits
in contravention of the Interagency Guidelines for Real Estate Lending Policies, as contained in
Appendix A to Part 365, 12 C.F.R. Part 365, and ensuring that impaired loans are properly placed on
non-accrual status;




	 	(viii)	 	identification of loans to directors, officers, principal shareholders, and





their related interests; and




	 	(ix)	 	a mechanism for reporting periodically, but in no event less
than quarterly,





the information developed in (i) through (viii) above to the Board.



(c) A copy of the independent loan review program shall be submitted to the Regional
Director for review and comment. Within 30 days of receipt of any comments from the Regional
Director, the Board shall incorporate and adopt any changes required by the Regional Director.
Thereafter the Bank shall implement and adhere to the program.




APPRAISAL COMPLIANCE PROGRAM



6. (a) Within 30 days from the effective date of this ORDER, the Board shall ensure that the Bank
operates under an adequate and effective appraisal compliance program, including enhancing the
Bank’s appraisal policy to capture risk management and internal controls that ensure that
appraisals are obtained in a timely manner when required by law or regulation and that appraisals
contain appropriate valuation approaches to support assigned values consistent with Part 323 of the
FDIC’s Rules and Regulations, 12 C.F.R. Part 323 and the Interagency Appraisal and Evaluation
Guidelines (FIL-74-94, issued November 11, 1994).



(b) Within 90 days from the effective date of this ORDER, the Bank shall certify to the
Regional Director that adequate training has been provided to account managers who are responsible
for obtaining and reviewing appraisals to ensure that they include all necessary information,
employ correct methodology, include reasonable assumptions and adequately support assigned values.



(c) A copy of the appraisal compliance program shall be submitted to the Regional
Director for review and comment. Within 30 days of receipt of any comments from the Regional
Director, the Board shall incorporate and adopt any changes required by the Regional Director.
Thereafter the Bank shall implement and adhere to the program.



REDUCTION OF CLASSIFIED AND SPECIAL MENTION ASSETS




7. (a) Within 90 days from the effective date of this ORDER, the Bank shall adopt, implement,
and adhere to a written plan to reduce the Bank’s risk position in each asset in excess of $5
million which is listed for Special Mention or classified “substandard” or “doubtful” in the Report
of Examination. For purposes of this paragraph, “reduce” means to collect, charge off, or improve
the quality of an asset so as to warrant its removal from adverse classification by the Regional
Director.



(b) The plan shall include, but is not limited to, provisions which:



(i) prohibit an extension of credit for the payment of interest, unless the Board provides, in
writing, a detailed explanation of why the extension is in the best interest of the Bank and how it
improves the position of the Bank, including an appropriate workout plan that has been developed
and will be implemented in conjunction with the additional credit to be extended;



(ii) provide for the review of the current financial condition of each Special Mention or
classified borrower, including a review of borrower cash flow and collateral value;



(iii) delineate areas of responsibility for loan officers;



(iv) reduce Special Mention and classified assets to 100% of Tier 1 capital and ALLL, and 75%
of Tier 1 capital and ALLL within 6 and 12 months, respectively, from the effective date of this
ORDER; and



(v) provide for the submission of monthly written progress reports to the Board for review and
notation in the Board minutes.



(c) The plan required by this paragraph shall submitted to the Regional Director for review
and comment. Within 30 days of receipt of any objections from the Regional Director, the Board
shall incorporate any changes required and thereafter adopt the plan. Thereafter, the Bank shall
implement and fully adhere to the plan. While this ORDER is in effect, the plan shall be revised
to include assets which become adversely classified after the effective date of this ORDER or are
listed as Special Mention at any subsequent examination.



REDUCTION OF DELINQUENCIES AND NON-ACCRUAL ASSETS




8. (a) Within 45 days from the effective date of this ORDER, the Bank shall formulate and submit to
the Regional Director for review and comment a reasonable and realistic written plan for the
reduction and collection of delinquent and non-accrual loans. Such plan shall include, but not be
limited to, provisions which:



(i) prohibit the extension of credit for the payment of interest, unless the Board adopts
prior to such extension of credit a detailed written statement giving reasons why such extension of
credit is in the best interests of the Bank and how it improves the position of the Bank, including
an appropriate workout plan that has been developed and will be implemented in conjunction with the
additional credit to be extended. Copies of the statement approved by the Board shall be made a
part of the Board minutes and placed in the appropriate loan file and submitted to the Regional
Director with the quarterly progress reports required pursuant to paragraph 17 of this ORDER;



(ii) delineate areas of responsibility for implementing and monitoring the Bank’s collection
policies;



(iii) establish specific collection procedures to be instituted at various stages of a
borrower’s delinquency;



(iv) establish dollar levels to which the Bank shall reduce delinquencies and non-accruals
within 30 days from the effective date of this ORDER; and



(v) provide for the submission of monthly written progress reports to the Board for review and
notation in the Board minutes.



(b) For purposes of the plan, “reduce” means to charge-off, collect or improve the quality of
an asset as provided in the FFIEC Instructions for the Report of Condition and Income.



(c) Within 30 days after the Regional Director have responded to the plan, the Board shall
adopt the plan as amended or modified by the Regional Director. The plan shall be implemented
immediately to the extent that the provisions of the plan are not already in effect at the Bank.



RESTRICTION ON ADVANCES TO CLASSIFIED BORROWERS




9. (a) As of the effective date of this ORDER, the Bank shall not extend, directly or
indirectly, any additional credit to, or for the benefit of, any borrower who is already obligated
in any manner to the Bank on any extensions of credit (including any portion thereof) that has been
charged off the books of the Bank or classified “loss” in the current Report of Examination or any
future report of examination, so long as such credit remains uncollected.



(b) As of the effective date of this ORDER, the Bank shall not extend, directly or indirectly,
any additional credit to, or for the benefit of, any borrower whose loan or other credit has been
classified “substandard,” “doubtful” or is listed for Special Mention in the Report of Examination
or any future report of examination, and is uncollected.



(c) The provision of this ORDER restricting lending to a delinquent or classified borrower
shall not apply if the Bank’s failure to extend further credit to a particular borrower would be
detrimental to the best interests of the Bank. Prior to extending additional credit pursuant to
this paragraph, whether in the form of a renewal, extension, or further advance of funds, such
additional credit shall be approved by the Board, or a designated committee thereof, who shall
determine that:



(i) the failure of the Bank to extend such credit would be detrimental to the best interests
of the Bank, with a written explanation of why the failure to extend such credit would be
detrimental;



(ii) the extension of credit would improve the Bank’s position, with a written explanatory
statement of how and why the Bank’s position would improve; and



(iii) an appropriate workout plan has been developed and will be implemented in conjunction
with the additional credit to be extended. The Board’s determinations and approval shall be made a
part of the minutes of the Board, or designated committee and copies shall be submitted to the
Regional Director with the next quarterly submission, with a copy retained in the borrower’s credit
file.



LIQUIDITY AND FUNDS MANAGEMENT POLICIES AND PLAN




10. (a) Within 30 days from the effective date of this ORDER, the Board shall ensure that the Bank
operates under an adequate and effective Liquidity and Funds Management Plan. The Bank shall
conform it funds management policies to the Liquidity and Funds Management Plan. At a minimum,
the Liquidity and Funds Management Plan shall address all of the deficiencies and recommendations
identified in the Report of Examination, as well as:



(i) identify personnel responsible for the funds management functions within the Bank;



(ii) provide a statement of the Bank’s long-term and short-term liquidity needs and plans for
ensuring that such needs are met;



(iii) provide for a periodic review of the Bank’s deposit structure, including the volume and
trend of total deposits and the volume and trend of the various types of deposits offered, the
maturity distribution of time deposits, rates being paid on each type of deposit, rates being paid
by trade area competition, caps on large time deposits, public funds, out-of-area deposits, and any
other information needed;



(iv) establish a reasonable range for its net non-core funding ratio as computed in the
Uniform Bank Performance Report and shall address the means by which the Bank will seek to reduce
its reliance on non-core funding and high cost rate-sensitive deposits;



(v) identify the source and use of borrowed and/or volatile funds;



(vi) establish sufficient back-up lines of credit that would allow the Bank to borrow funds to
meet depositor demands if the Bank’s other provisions for liquidity prove to be inadequate;



(vii) require the retention of securities and/or other identified categories of investments
that can be liquidated within one day in amounts sufficient (as a percentage of the Bank’s total
assets) to ensure the maintenance of the Bank’s liquidity posture at a level consistent with short
and long term liquidity objectives;



(viii) establish a minimum liquidity ratio and define how the ratio is to be calculated;



(ix) establish contingency plans by identifying alternative courses of action designed to meet
the Bank’s liquidity needs; and



(x) address the use of borrowings (i.e., seasonal credit needs, match funding mortgage loans,
etc.) and provide for reasonable maturities commensurate with the use of the borrowed funds;
address concentration of funding sources; and address pricing and collateral requirements with
specific allowable funding channels (i.e., brokered deposits, internet deposits, Fed funds
purchased and other correspondent borrowings).



(b) A copy of the Liquidity and Funds Management Plan shall be submitted to the Regional
Director for review and comment. Within 30 days of receipt of any comments from the Regional
Director, the Board shall incorporate and adopt any changes required by the Regional Director.
Thereafter the Bank shall implement and adhere to the Liquidity and Funds Management Plan.
Annually thereafter, while this ORDER is in effect, the Bank shall review the Liquidity and Funds
Management Plan for adequacy and, based upon such review, shall make necessary revisions to the
plan to strengthen funds management procedures and maintain adequate provisions to meet the Bank’s
liquidity needs.



(c) Upon the issuance of this ORDER and so long as this ORDER is in effect, the Bank shall not
accept, increase, renew, or rollover its brokered deposits without the prior written approval of
the Regional Director. Within 30 days of the effective date of this ORDER, the Bank shall
formulate and submit to the Regional Director a written plan for reducing the Bank’s reliance on
brokered deposits (“brokered deposit plan”). The brokered deposit plan shall detail the current
composition of the Bank’s brokered deposits by maturity and explain the means by which such
deposits will be paid. For purposes of this ORDER, brokered deposits are defined in section
337.6(a)(2) of the FDIC Rules and Regulations to include any deposits funded by third-party agents
or nominees for depositors, including deposits managed by a trustee or custodian when each
individual beneficial interest is entitled to or asserts a right to federal deposit insurance.
Within 10 days of receipt of comments from the Regional Director, and after consideration of all
such comments, the Board shall approve the brokered deposit plan, which approval shall be recorded
in the Board minutes. Thereafter, the Bank shall implement and fully comply with the brokered
deposit plan.



ALLOWANCE FOR LOAN AND LEASE LOSSES




11. (a) Within 60 days from the effective date of this ORDER, the Board shall establish a
comprehensive policy and methodology for determining the ALLL. The policy shall provide for a
review of the ALLL at least once each calendar quarter. Said review should be completed not later
than 15 days subsequent to the end of each calendar quarter in order that the findings of the Bank
may be properly reported in the Reports of Condition and Income. Such reviews shall, at a minimum,
be made in accordance with Financial Accounting Standards Board (“FASB”) Statements Numbers 5 and
114, as codified by FASB under its Accounting Standards Codification effective after September 15,
2009 (established by FASB Statement Number 168) (“FASB 5 and 114”), the FFIEC Instructions for the
Report of Condition and Income, the Interagency Statement of Policy on the Allowance for Loan and
Lease Losses (FIL-105 -2006, issued December 13, 2006) and other applicable regulatory guidance
that addresses the appropriateness of the Bank’s ALLL, and any analysis of the Bank’s ALLL provided
by the FDIC.



(b) Such reviews shall include, at a minimum:



(i) the Bank’s loan loss experience;



(ii) an estimate of the potential loss exposure in the portfolio; and



(iii) trends of delinquent and non-accrual loans and prevailing and prospective economic
conditions.



(c) The minutes of the Board meetings at which such reviews are undertaken shall include
complete details of the reviews and the resulting recommended increases in the ALLL. The Board
shall document in the Board minutes the basis for any determination not to require provisions for
loan losses in accordance with the above-cited guidance.



(d) ALLL entries required by this paragraph shall be made prior to any capital determinations
required by this ORDER. ALLL entries against current earnings must be booked in current calendar
quarter before the Reports of Condition and Income is filed. A deficiency in the Bank’s ALLL shall
be remedied in the calendar quarter in which it is discovered by a charge to current operating
earnings prior to any Tier 1 capital determinations required by this ORDER and prior to the Bank’s
submission of its Reports of Condition and Income. The Board shall thereafter maintain an
appropriate ALLL.



(e) The Bank shall submit the policy to the Regional Director for non-objection. Within 30
days of receipt of any objections from the Regional Director and after incorporation and adoption
of all objections or comments, the Board shall approve the policy, which approval shall be recorded
in the minutes of the meeting of the Board. Thereafter, the Bank shall implement and fully comply
with the policy.



INTEREST RATE RISK




12. (a) Within 30 days from the effective date of this ORDER, the Board shall ensure that the Bank
operates under an adequate and effective policy for managing the Bank’s sensitivity to interest
rate risk. At a minimum, this policy shall address the deficiencies and recommendations identified
in the Report of Examination. In addition, the policy shall comply with the Joint Agency Statement
of Policy on Interest Rate Risk (FIL-52-96, issued July 12, 1996).



(b) The policy revisions required by this paragraph shall be submitted to the Regional
Director for review and comment. Within 30 days of receipt of any comments from the Regional
Director, the Board shall incorporate any changes required and thereafter adopt, implement and
adhere to the policy.



PROFIT AND BUDGET PLAN




13. (a) Within 60 days from the effective date of this ORDER, and within the first 30 days of each
calendar year thereafter, the Board shall develop and fully implement a written profit plan which
shall include goals and strategies of the Bank, consistent with sound banking practices, and taking
into account the Bank’s other written plans, policies, or other actions as required by this ORDER
(“Profit Plan”). The Profit Plan shall include, at a minimum:



(i) a realistic budget with forecasts and assumptions that are consistent with actual Bank
operation results;



(ii) specific goals to maintain appropriate provisions to the allowance for loan and lease
losses;



(iii) realistic and comprehensive budgets for all categories of income and expense items,
including an executive compensation plan addressing any and all salaries, bonuses and other
benefits of every kind or nature whatsoever, both current and deferred, whether paid directly or
indirectly, which plan incorporates qualitative as well as profitability performance standards for
the Bank’s senior executive officers;



(iv) a description of the operating assumptions that form the basis for, and adequately
support, material projected revenue and expense components;



(v) coordination of the Bank’s loan, investment, funds management, and operating policies;
strategic plan; and an ALLL methodology with the profit and budget planning;



(vi) a budget review process to monitor the revenue and expenses of the Bank whereby actual
performance is compared against budgetary projections not less than quarterly;



(vii) recording the results of the budget review and any actions taken by the Bank as a result
of the budget review in the minutes of the board of directors; and



(viii) the individual(s) responsible for implementing each of the goals and strategies of the
Profit Plan.



(b) Copies of the plans and budgets required by this paragraph shall be submitted to the
Regional Director.



STRATEGIC PLAN




14. (a) Within 60 days from the effective date of this ORDER, the Bank shall formulate a realistic
and comprehensive strategic plan. The plan required by this provision shall contain an assessment
of the Bank’s current financial condition and market area, and a description of the operating
assumptions that form the basis for major projected income and expense components. The written
strategic plan shall address, at a minimum: (i) strategies for pricing policies and asset/liability
management; and (ii) financial goals, including pro forma statements for asset growth, capital
adequacy, and earnings.



(b) The strategic plan and any subsequent modification thereto, shall be submitted to the
Regional Director for non-objection. Within 30 days of receipt of comments from the Regional
Director, and after due consideration of any changes recommended, the Board shall approve the plan
and record its approval in the minutes of the board meeting. Thereafter, the Bank shall implement
and fully comply with the plan.



CORRECTION OF VIOLATIONS




15. (a) Within 60 days from the effective date of this ORDER, the Bank shall:



(i) consistent with safe and sound banking practices, eliminate or correct all violations of
law, rules, and regulations cited in the current Report of Examination ;



(ii) consistent with safe and sound banking practices, eliminate or correct all contraventions
of regulatory policies or guidelines cited in the current Report of Examination; and



(iii) adopt and implement appropriate procedures to ensure future compliance with all
applicable laws, rules, regulations, and regulatory policies and guidelines.



(b) The Bank shall document each violation or contravention that cannot be eliminated or
corrected, and why, for review by the Board. The Board’s review, discussion, and any action taken
with respect to the uncorrected violations or contraventions shall be recorded in the Board
minutes.



COMPLIANCE COMMITTEE




16. Within 30 days from the effective date of this ORDER, the Board shall establish a
committee of the Board members charged with the responsibility of ensuring that the Bank complies
with the provisions of this ORDER. At least 3 of the members of such committee shall be Board
members not employed in any capacity by the Bank other than as a director. The committee shall
report monthly to the full Board, and a copy of the report and any discussion relating to the
report or the ORDER shall be noted in the Board minutes. The establishment of this committee shall
not diminish the responsibility or liability of the entire Board to ensure compliance with the
provisions of this ORDER.



PROGRESS REPORTS




17. Within 30 days from the end of each calendar quarter following the effective date of
this ORDER, the Board shall furnish written progress reports to the Regional Director detailing the
form, content, and manner of any actions taken to secure compliance with this ORDER.



SHAREHOLDERS



18. After the effective date of this ORDER, the Bank shall send a copy of this ORDER, or
otherwise furnish a description of this ORDER, to its parent holding company in conjunction with
the Bank’s next shareholder communication. The description shall fully describe the ORDER in all
material aspects.



ORDER EFFECTIVE



19. This ORDER shall be effective on the date of issuance. The provisions of this ORDER
shall be binding upon the Bank, its institution-affiliated parties, and any successors and assigns
thereof. The provisions of this ORDER shall remain effective and enforceable except to the extent
that and until such time as any provision has been modified, terminated, suspended, or set aside by
the FDIC.



OTHER ACTIONS



20. The provisions of this ORDER shall not bar, estop, or otherwise prevent the FDIC or any
other federal or state agency or department from taking any other action against the Bank or any of
the Bank’s current or former institution-affiliated parties.



Issued Pursuant to Delegated Authority




Dated: June 2, 2010


By:




/s/ Doreen R. Eberley

Doreen R. Eberley

Regional Director





New York Regional Office


Division of Supervision and Consumer
Protection


Federal Deposit Insurance Corporation