UNITED STATES OF AMERICA


BEFORE THE


BOARD OF GOVERNORS OF THE FEDERAL RESERVE
SYSTEM


WASHINGTON, D.C.


 


STATE OF OREGON


DEPARTMENT OF CONSUMER AND BUSINESS SERVICES,


DIVISION OF FINANCE AND CORPORATE SECURITIES


SALEM, OREGON


 


	Written Agreement by and among	 
	 	 
	CASCADE BANCORP	Docket No. 09-165-WA/RB-HC
	Bend, Oregon	 
	 	 
	FEDERAL RESERVE BANK OF	 
	SAN FRANCISCO	 
	San Francisco, California	 
	 	 
	and	 
	 	 
	OREGON DEPARTMENT OF	 
	CONSUMER AND BUSINESS SERVICES,	 
	DIVISION OF FINANCE AND	 
	CORPORATE SECURITIES	 
	Salem, Oregon	 


 


WHEREAS, Cascade Bancorp, Bend, Oregon
("Bancorp"), a registered bank holding company, owns and controls Bank of the Cascades, Bend, Oregon (the "Bank"),
a state chartered nonmember bank, and various nonbank subsidiaries;


 


WHEREAS, it is the common goal of Bancorp,
the Federal Reserve Bank of San Francisco (the "Reserve Bank"), and the Director of the State of Oregon's Department
of Consumer and Business Services acting through the Administrator of the Division of Finance and Corporate Securities (the "DFCS")
to maintain the financial soundness of Bancorp so that Bancorp may serve as a source of strength to the Bank;


 



    	 



    	 



    

 


WHEREAS, Bancorp, the Reserve Bank, and
the DFCS have mutually agreed to enter into this Written Agreement (the "Agreement"); and


 


WHEREAS, on October 23, 2009 the board
of directors of Bancorp, at a duly constituted meeting, adopted a resolution authorizing and directing Patricia Moss to enter into
this Agreement on behalf of Bancorp, and consenting to compliance with each and every provision of this Agreement by Bancorp and
its institution-affiliated parties, as defined in sections 3(u) and 8(b)(3) of the Federal Deposit Insurance Act, as amended (the
"FDI Act") (12 U.S.C. §§ 1813(u)and 1818(b)(3)).


 


NOW, THEREFORE, Bancorp, the Reserve Bank,
and the DFCS agree as follows:


 


Dividends and Distributions


 


1.            (a)         Bancorp
shall not declare or pay any dividends without the prior written approval of the Reserve Bank, the Director of the Division of
Banking Supervision and Regulation (the "Director") of the Board of Governors of the Federal Reserve System (the "Board
of Governors"), and the DFCS.


 


(b)         Bancorp
shall not directly or indirectly take dividends or any other form of payment representing a reduction in capital from the Bank
without the prior written approval of the Reserve Bank and the DFCS.


 


(c)         Bancorp
and its nonbank subsidiaries shall not make any distributions of interest, principal, or other sums on subordinated debentures
or trust preferred securities without the prior written approval of the Reserve Bank, the Director, and the DFCS.


 



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(d)          All
requests for prior approval shall be received by the Reserve Bank and the DFCS at least 30 days prior to the proposed dividend
declaration date, proposed distribution on subordinated debentures, and required notice of deferral on trust preferred securities.
All requests shall contain, at a minimum, current and projected information on Bancorp's capital, earnings, and cash flow; the
Bank's capital, asset quality, earnings, and allowance for loan and lease losses; and identification of the sources of funds for
the proposed payment or distribution. For requests to declare or pay dividends, Bancorp must also demonstrate that the requested
declaration or payment of dividends is consistent with the Board of Governors' Policy Statement on the Payment of Cash Dividends
by State Member Banks and Bank Holding Companies, dated November 14, 1985 (Federal Reserve Regulatory Service, 4-877 at page 4-323).


 


Debt and Stock Redemption


 


2.        
  (a)          Bancorp and any nonbank subsidiary shall not,
directly or indirectly, incur, increase, or guarantee any debt without the prior written approval of the Reserve Bank and the
DFCS. All requests for prior written approval shall contain, but not be limited to, a statement regarding the purpose of the
debt, the terms of the debt, and the planned source(s) for debt repayment, and an analysis of the cash flow resources
available to meet such debt repayment.


 


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


 


Capital Plan


 


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


 


(a)          The
consolidated organization's and the Bank's current and future capital requirements, including compliance with the Capital
Adequacy Guidelines for Bank Holding Companies: Risk-Based Measure and Tier 1 Leverage Measure, Appendices A and D of
Regulation Y of the Board of Governors (12 C.F.R. Part 225, App. A and D), and the applicable capital adequacy guidelines for
the Bank issued by the Bank's federal regulator;


 



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(b)          the
adequacy of the Bank's capital, taking into account the volume of classified credits, concentrations of credit, allowance for loan
and lease losses ("ALLL"), current and projected asset growth, and projected retained earnings;


 


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


 


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


 


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


 


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


 


Compliance with Laws and Regulations


 


5.          (a)          In
appointing any new director or senior executive officer, or changing the responsibilities of any senior executive officer so
that the officer would assume a different senior executive officer position, Bancorp shall comply with the notice provisions
of section 32 of the FDI Act (12 U.S.C. § 183 li) and Subpart H of Regulation Y of the Board of Governors (12 C.F.R.
§§225.71 et seq.).


 



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(b)          Bancorp
shall comply with the restrictions on indemnification and severance payments of section 18(k) of the FDI Act (12 U.S.C. §
1828(k)) and Part 359 of the Federal Deposit Insurance Corporation's regulations (12 C.F.R. Part 359).


 





Progress Reports


 


6.           Within
30 days after the end of each calendar quarter following the date of this Agreement, the board of directors shall submit to the
Reserve Bank and the DFCS written progress reports detailing the form and manner of all actions taken to secure compliance with
the provisions of this Agreement and the results thereof, and a parent company only balance sheet, income statement, and, as applicable,
a report of changes in stockholders' equity.


 


Approval and Implementation of Plan


 


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


 


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


 


(c)          During
the term of this Agreement, the approved capital plan shall not be amended or rescinded without the prior written approval of the
Reserve Bank.


 


Communications


 


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


 


(a)          Mr.
John Kandaris


Examining Manager


Banking Supervision and Regulation


Federal Reserve Bank of San Francisco


101 Market Street, Mail Stop 920


San Francisco, California 94105


 



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(b)          Mr.
Richard Renken


Banks and Trusts Program Manager


State of Oregon, Department of Consumer and Business
Services

 Division of Finance and Corporate Securities

 350 Winter Street NW, Room 410

 Salem, Oregon 97309-0405


 


(c)          Ms.
Patricia Moss

Chief Executive Officer

Cascade Bancorp


1100 NW Wall Street

 Bend, Oregon 97701


 


Miscellaneous


 


9.           Notwithstanding
any provision of this Agreement, the Reserve Bank and the DFCS may, in their sole discretion, grant written extensions of time
to Bancorp to comply with any provision of this Agreement.


 


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


 


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


 


12.         The
provisions of this Agreement shall not bar, estop, or otherwise prevent the Board of Governors, the Reserve Bank, the DFCS, or
any other federal or state agency from taking any other action affecting Bancorp, the Bank, any nonbank subsidiary of Bancorp,
or any of their current or former institution-affiliated parties and their successors and assigns.


 



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13.         Pursuant
to section 50 of the FDI Act (12 U.S.C. § 183 laa), this Agreement is enforceable by the Board of Governors under section
8 of the FDI Act (12 U.S.C. § 1818).


 


IN WITNESS WHEREOF, the parties have caused
this Agreement to be executed as of the 26th day of October, 2009.


 





	CASCADE BANCORP	 	FEDERAL RESERVE BANK OF
	 	 	SAN FRANCISCO
	 	 	 	 	 
	By:	/s/ Patricia Moss	 	By:	/s/ Kevin Zerbe
	 	 Patricia Moss	 	 	 Kevin Zerbe
	 	 Chief Executive Officer	 	 	 Vice President
	 	 	 	 	 
	 	 	OREGON DEPARTMENT OF
	 	 	CONSUMER AND BUSINESS
	 	 	SERVICES, DIVISION OF FINANCE
	 	 	AND CORPORATE SECURITIES
	 	 	 
	 	 	By:	/s/ David Tatman
	 	 	 	 David C. Tatman
	 	 	 	 Administrator


 



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