ex-10a15.htm


    
      
        
          

        

      

      
        AGREEMENT
BY AND BETWEEN

        Patriot
National Bank

        Stamford,
Connecticut

        and

        The
Comptroller of the Currency

        


        


        Patriot National Bank, Stamford,
Connecticut ("Bank") and the Comptroller of the Currency of the United States of
America ("Comptroller") wish to protect the interests of the depositors, other
customers, and shareholders of the Bank, and, toward that end, wish the Bank to
operate safely and soundly and in accordance with all applicable laws, rules and
regulations.

        The Comptroller, through his National
Bank Examiner, has examined the Bank and his findings are contained in the
Report of Examination (“ROE”) for the examination that commenced on August 18,
2008.

        In consideration of the above premises,
it is agreed between the Bank, by and through its duly elected and acting Board
of Directors (“Board”), and the Comptroller, through his authorized
representative, that the Bank shall operate at all times in compliance with the
articles of this Agreement.


        Article
I


        JURISDICTION


        (1)           This
Agreement shall be construed to be a “written agreement entered into with the
agency” within the meaning of 12 U.S.C. § 1818(b)(1).

        (2)           This
Agreement shall be construed to be a “written agreement between such depository
institution and such agency” within the meaning of 12 U.S.C. § 1818(e)(1) and 12
U.S.C. § 1818(i)(2).

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        (3)           This
Agreement shall be construed to be a “formal written agreement” within the
meaning of 12 C.F.R. § 5.51(c)(6)(ii).  See 12 U.S.C. §
1831i.

        (4)           This
Agreement shall be construed to be a “written agreement” within the meaning of
12 U.S.C. § 1818(u)(1)(A).

        (5)           All
reports or plans which the Bank or Board has agreed to submit to the Assistant
Deputy Comptroller pursuant to this Agreement shall be forwarded
to:

         

        
          	 
      	
                  Melissa
      F. Scofield

                
	 
      	
                  Assistant
      Deputy Comptroller

                
	 
      	
                  343
      Thornall Street, Suite 610

                
	 
      	
                  Edison,
      New Jersey 08837

                


        

         

        Article
II

        COMPLIANCE
COMMITTEE

        (1)           Within
sixty (60) days of the date of this Agreement, the Board shall appoint a
Compliance Committee of at least three (3) directors, of which no more than (1)
shall be an employee or controlling shareholder of the Bank or any of its
affiliates (as the term “affiliate” is defined in 12 U.S.C. § 371c(b)(1)), or a
family member of any such person.  Upon appointment, the names of the
members of the Compliance Committee and, in the event of a change of the
membership, the name of any new member shall be submitted in writing to the
Assistant Deputy Comptroller.  The Compliance Committee shall be
responsible for monitoring and coordinating the Bank's adherence to the
provisions of this Agreement.

        (2)           The
Compliance Committee shall meet at least monthly.

        (3)           Within
thirty (30) days of the date of the formation of the Compliance Committee, and
quarterly thereafter, the Compliance Committee shall submit a written progress
report to the Board setting forth in detail:

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

        
          
            
              	 
      	
                      (a)

                    	
                      a
      description of the action needed to achieve full compliance with each
      Article of this Agreement;

                    
	 
      	
                      (b)

                    	
                      actions
      taken to comply with each Article of this Agreement;
and

                    
	 
      	
                      (c)

                    	
                      the
      results and status of those
actions.

                    


            

          

        

        (4)           The
Board shall forward a copy of the Compliance Committee's report, with any
additional comments by the Board, to the Assistant Deputy Comptroller within ten
(10) days of receiving such report.

        Article
III

        BOARD AND MANAGEMENT
SUPERVISION

        (1)           Within
one hundred twenty (120) days, the Board shall ensure competent management and
strengthen supervision presently being provided to the Bank by assessing the
Board of Director's effectiveness, the Bank’s management structure, and staffing
requirements in light of the Bank’s present condition.  At a minimum,
the Board and management shall assess:

        
          
            
              
                
                  
                    	 
      	
                            (a)

                          	
                            For
      the Board:

                          
	 
      	 
      	
                            (i)

                          	
                            The
      Board’s strengths and weaknesses, including an analysis of the necessary
      qualifications and skills for individual members to serve as effective
      directors and properly supervise the Bank’s affairs:

                          
	 
      	 
      	
                            (ii)

                          	
                            The
      Board committees, especially the Audit Committee, to ensure members are
      knowledgeable of what is required to establish an effective audit program
      and capable of implementing this
program;

                          


                  

                

              

            

          

        

        
          
            
            

          

          
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                                                    	 	 	(iii)	Individual
      members' qualifications and skills compared to necessary qualifications
      and skills to properly supervise the Bank's affairs;
	 
      	 
      	
                                                            (iv)

                                                          	
                                                            Whether
      the Board members are receiving adequate information on the operation of
      the Bank to enable them to fulfill their fiduciary responsibilities and
      other responsibilities under law;

                                                          
	 
      	 
      	
                                                            (v)

                                                          	
                                                            Recommendations
      to correct or eliminate any other deficiencies in the supervision or
      organizational structure of the Bank.

                                                          
	 
      	
                                                            (b)

                                                          	
                                                            For
      management:

                                                          
	 
      	 
      	
                                                            (i)

                                                          	
                                                            Present
      and future management and staffing requirements of each area of the Bank,
      with particular emphasis given to the commercial real estate lending,
      credit administration, risk management, compliance (particularly the Bank
      Secrecy Act (BSA) area), audit and financial areas;

                                                          
	 
      	 
      	
                                                            (ii)

                                                          	
                                                            Current
      lines of authority, reporting responsibilities, and delegation of duties
      for all officers, including identification of any overlapping duties or
      responsibilities;

                                                          
	 
      	 
      	
                                                            (iii)

                                                          	
                                                            Each
      senior officer's qualifications and abilities, at a minimum for senior
      vice president and above, and a determination of whether each of these
      individuals possesses the experience and other qualifications required to
      perform present and anticipated duties of his/her officer
      position;

                                                          


                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

          
            
              
              

            

            
              4

              
                

              

            

            
              
              

            

          

          
             

            
              
                
                  
                    
                      
                        
                          
                            
                              	 	 	(iv)	Each
      objective by which management's effectiveness will be
      measured;
	 
      	 
      	
                                      (v)

                                    	
                                      Whether
      management or staffing changes should be made, including the need for
      additions to or deletions from the current management team, and develop
      recommendations for making the necessary changes; and

                                    
	 
      	 
      	
                                      (vi)

                                    	
                                      Weaknesses
      in the skills and abilities of the Bank's staff and management team and
      develop a training program to address such
  weaknesses.

                                    


                            

                          

                        

                      

                    

                  

                

              

            

          

        

        (2)           Within
one hundred twenty (120) days, the Board shall ensure that the Bank has
developed a management succession program to promote the retention and
continuity of capable management;

        (3)           Within
one hundred twenty (120) days, the Board shall ensure that management has
completed a Bank-wide risk assessment that discusses and reviews all risks
relevant to the Bank (e.g., credit, interest rate, liquidity, transaction,
compliance, strategic and reputation) and including new products and services
being considered.  The risk assessment should describe for each risk
the current risk position, the likely direction of risk over the nest twelve
months, and the controls in place to mitigate risks.  Finding from the
risk assessment should be submitted to and reviewed by the Board.

        (4)           Within
one hundred fifty (150) days, the Board shall develop, implement, and thereafter
ensure Bank adherence to a written plan, with specific time frames, that will
correct any deficiencies identified as part of the reviews
required.

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

        (5)           The
Board shall ensure that the Bank has satisfactory processes, personnel, and
control systems to ensure implementation of and adherence to the plan developed
pursuant to this Article.

        (6)           Copies
of the Board's written plan shall be forwarded to the Assistant Deputy
Comptroller.  The Assistant Deputy Comptroller shall retain the right
to determine the adequacy of the report and its compliance with the terms of
this Agreement. In the event the written plan, or any portion thereof, is not
implemented, the Board shall immediately advise the Assistant Deputy
Comptroller, in writing, of specific reasons for deviating from the
plan.

        Article
IV

        CREDIT RISK MANAGEMENT AND
THE ALLOWANCE FOR LOAN AND LEASE

        LOSSES

        (1)           Within
ninety (90) days, the Board shall develop implement, and thereafter ensure Bank
adherence to a written program to improve credit risk management process and
address credit deficiencies noted in the ROE.  The program shall
include but not be limited to:

        
          
            
              
                
                  
                    
                      
                        
                          	 	
                                  (a)

                                	a
      revision and/or development of the Bank’s procedures to ensure accuracy of
      risk ratings and proper and timely problem loan identification to include
      non-accrual loans;
	 
      	
                                  (b)

                                	
                                  a
      revision and/or development of the Bank’s procedures to ensure current
      financial data is obtained on borrowers and guarantors;

                                
	 
      	
                                  (c)

                                	
                                  a
      revisions and/or development of the Bank’s procedures to ensure quality
      financial analysis and documentation for new and renewed
      credits;

                                


                        

                      

                    

                  

                

              

            

          

        

        
          
            
            

          

          
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                              	 	(d)	a
      revisions and/or development of the Bank’s procedures to ensure ongoing
      guarantor analysis, to include a review of the borrower’s or guarantor’s
      global cash flow analysis and analysis of contingent
      liabilities;
	 
      	
                                      (e)

                                    	
                                      a
      revisions and/or development of the Bank’s procedures to ensure appraisal
      reviewers to review key appraisals and appropriately document their
      findings;

                                    
	 
      	
                                      (f)

                                    	
                                      a
      revisions and/or development of the Bank’s procedures to ensure MIS is
      developed to track completion of annual reviews and financial statement
      exceptions;

                                    
	 
      	
                                      (g)

                                    	
                                      a
      revisions and/or development of the Bank’s procedures to improve the ALLL
      process and methodology including the use of external factors that could
      impact the ALLL.  Such procedures shall refer to the Comptroller
      of the Currency’s Handbook for the Allowance for Loan and Lease Losses
      dated June 1996 and the Interagency Policy Statement on the Allowance for
      Loan and Lease Losses dated December 13,
2006.

                                    


                            

                          

                        

                      

                    

                  

                

              

            

          

        

        (2)           At
least quarterly, the Board shall prepare a written assessment of the Bank’s
credit risk, which shall evaluate the Bank’s progress under the aforementioned
program.  The Board shall submit a copy of this assessment to the
Assistant Deputy Comptroller.

        (3)           The
Bank shall submit a copy of the program to the Assistant Deputy
Comptroller.  The Board shall ensure that the Bank has processes,
personnel, and control systems to ensure implementation of and adherence to the
program developed pursuant to this Article.


        
          
            
            

          

          
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        Article
V

        CRITICIZED
ASSETS

        (1)           The
Bank shall take prompt and continuing action to protect its interest in those
assets criticized the ROE, in any subsequent Report of Examination, by internal
or external loan review, or in any list provided to management by the National
Bank Examiners during any examination.

        (2)           Within
sixty (60) days, the Board shall adopt, implement, and thereafter ensure Bank
adherence to a written program designed to eliminate the basis of criticism of
assets criticized in the ROE, in any subsequent Report of Examination, or by any
internal or external loan review, or in any list provided to management by the
National Bank Examiners during any examination as "doubtful," "substandard," or
"special mention." shall include, at a minimum:

        
          
            
              	 
      	
                      (a)

                    	
                      an
      identification of the expected sources of repayment;

                    
	 
      	
                      (b)

                    	
                      the
      appraised value of supporting collateral and the position of the Bank’s
      lien on such collateral where applicable;

                    
	 
      	
                      (c)

                    	
                      an
      analysis of current and satisfactory credit information, including cash
      flow analysis where loans are to be repaid from operations;
      and

                    
	 
      	
                      (d)

                    	
                      the
      proposed action to eliminate the basis of criticism and the time frame for
      its accomplishments.

                    


            

          

        

        (3)           Upon
adoption, a copy of the program for all criticized assets equal to or exceeding
one million dollars ($1,000,000) shall be forwarded to the Assistant Deputy
Comptroller.

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

        (4)           The
Board shall ensure that the Bank has satisfactory processes, personnel, and
control systems to ensure implementation of and adherence to the program
developed pursuant to this Article.

        (5)           The
Board, or a designated committee, shall conduct a review, on at least a
quarterly basis, to determine:

        
          
            
              	 
      	
                      (a)

                    	
                      the
      status of each criticized asset or criticized portion thereof that equals
      or exceeds one million dollars ($1,000,000);

                    
	 
      	
                      (b)

                    	
                      management’s
      adherence to the program adopted pursuant to this
  Article;

                    
	 
      	
                      (c)

                    	
                      the
      status and effectiveness of the written program; and

                    
	 
      	
                      (d)

                    	
                      the
      need to revise the program or take alternative
  action.

                    


            

          

        

        (6)           A
copy of each review shall be forwarded to the Assistant Deputy Comptroller on a
quarterly basis (in a format similar to Appendix A, attached
hereto).

        (7)           The
Bank may extend credit, directly or indirectly, including renewals, extensions,
or capitalization of accrued interest, to a borrower whose loans or other
extensions of credit are criticized in the ROE, in any subsequent Report of
Examination, in any internal or external loan review, or in any list provided to
management by the National Bank Examiners during any examination and whose
aggregate loans or other extensions exceed one million dollars ($1,000,000) only
if each of the following conditions are met:

        
          
            
              
                
                  
                    
                      	 
      	(a)	
                              the
      Board or designated committee finds that the extension of additional
      credit is necessary to promote the best interests of the Bank and that
      prior to renewing, extending, or capitalizing any additional credit, a
      majority of the full Board (or designated committee) approves the credit
      extension and records, in writing, why such extension is necessary to
      promote the best interests of the Bank;
  and

                            


                    

                  

                   

                

              

            

          

        

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

        
           

          
            	
                  	(b)	
                    a
      comparison to the written program adopted pursuant to this Article shows
      that the Board’s formal plan to collect or strengthen the criticized asset
      will not be compromised.

                  


          

           

          (8)           A
copy of the approval of the Board or of the designated committee shall be
maintained in the file of the affected borrower.

        

        Article
VI

        CAPITAL
PLAN

              
(1)           Within
ninety (90) days, the Board shall develop, implement, and thereafter ensure Bank
adherence to a three-year capital program. The program shall
include:

        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	 	(a)	specific
      plans for the maintenance of adequate capital pursuant to the requirements
      under Part 3 and to remain well-capitalized pursuant to Part
      6;
	 
      	
                                              (b)

                                            	
                                              projections
      for growth and capital requirements based upon a detailed analysis of the
      Bank’s assets, liabilities, earnings, fixed assets, and off-balance sheet
      activities;

                                            
	 
      	
                                              (c)

                                            	
                                              projections
      of the sources and timing of additional capital to meet the Bank’s current
      and future needs;

                                            
	 
      	
                                              (d)

                                            	
                                              the
      primary source(s) from which the Bank will strengthen it capital structure
      to meet the Bank’s
needs:

                                            


                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

        
          
            
            

          

          
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                                    	 	(e)	contingency
      plans that identify alternative methods should the primary source(s) under
      (d) above not be available; and
	 
      	
                                            (f)

                                          	
                                            a
      dividend policy that permits the declaration of a dividend
      only:

                                          
	 
      	 
      	
                                            (i)

                                          	
                                            when
      the Bank is in compliance with its approved capital
    program;

                                          
	 
      	 
      	
                                            (ii)

                                          	
                                            when
      the Bank is in compliance with 12 U.S.C. §§ 56 and 60;
  and

                                          
	 
      	 
      	
                                            (iii)

                                          	
                                            with
      the prior written determination of no supervisory objection by the
      Assistant Deputy Comptroller.  Upon receiving a determination of
      no supervisory objection from the Assistant Deputy Comptroller, the Bank
      shall implement and adhere to the dividend
  policy.

                                          


                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

        
          (2)           For
one hundred eighty (180) days from the date of this Agreement, the Bank shall
limit Total Asset growth to no greater than an annualized rate of five percent
(5%), calculated using the actual outstanding Total Assets in place as of the
date of this Agreement; provided that, such restriction shall not apply to
funding existing lines of credit as of December 31, 2008, or increases in the
balance of single family/owner occupied first mortgage residential loans over
the balance of those loans as of December 31, 2008.

          (3)           Upon
completion, the Bank’s capital program shall be submitted to the Assistant
Deputy Comptroller for prior determination of no supervisory
objection.  Upon receiving a determination of no supervisory objection
from the Assistant Deputy Comptroller, the Bank shall implement and adhere to
the capital program.  The Board shall review and update the Bank’s
capital program on an annual basis or more frequently if
necessary.  Copies of the reviews and updates shall be submitted to
the Assistant Deputy Comptroller.

        

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

          
            (4)           The
Board shall ensure that the Bank has satisfactory processes, personnel, and
control systems to ensure implementation of and adherence to the program
developed pursuant to this Article.

            Article
VII

             

            PROFIT
PLAN

             

          

        

        (1)           Within
ninety (90) days, the Board shall develop, implement, and thereafter ensure Bank
adherence to a written profit plan to improve and sustain the earnings of the
Bank.

        This plan
shall include, at a minimum, the following elements:

        
          
            
              	 
      	
                      (a)

                    	
                      identification
      of the major areas in and by means which the Board will seek to improve
      the Bank's operating performance;

                    
	 
      	
                      (b)

                    	
                      realistic
      and comprehensive budgets, including projected balance sheets and year-end
      income statements;

                    
	 
      	
                      (c)

                    	
                      a
      budget review process to monitor both the Bank's income and expenses, and
      to compare actual figures with budgetary projections;

                    
	 
      	
                      (d)

                    	
                      a
      description of the operating assumptions that form the basis for major
      projected income and expense components; and

                    
	 
      	
                      (e)

                    	
                      expansion
      of the bank's branch profitability analysis to include comparisons to
      initial and ongoing profit
goals.

                    


            

          

        

        (2)           The
budgets and related documents require in paragraph (b) above for 2009 shall be
submitted to the Assistant Deputy Comptroller upon completion.  The
Board shall submit to the Assistant Deputy Comptroller annual budgets as
described in paragraph (b) above for each year this Agreement remains in
effect.  The budget for each year shall be submitted on or before
December 31 of the preceding year.

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

        (3)           The
Board shall forward comparisons of its balance sheet and profit and loss
statement to the profit plan projections to the Assistant Deputy Comptroller on
a quarterly basis.

        (4)           The
Board shall ensure that the Bank has satisfactory processes, personnel, and
control systems to ensure implementation of and adherence to the plan developed
pursuant to this Article.

        Article
VIII

        CONCENTRATIONS OF
CREDIT

        (1)           Within
(60) days, the Board shall adopt a written plan detailing how it will implement
more conservative concentration limits in order to reduce its commercial real
estate exposure (including speculative construction housing loans) to more
prudent levels and below the current 700% and planned 500% limits.

        (2)           The
Board shall forward a copy of this plan to the Assistant Deputy Comptroller
immediately following completion.

        (3)           Within
sixty (60) days, the Board shall adopt, implement, and thereafter ensure Bank
adherence to a written asset diversification program consistent with OCC Banking
Circular 255.  The program shall include, but not necessarily be
limited to, the following:

        
          
            
              	 
      	
                      (a)

                    	
                      a
      review of the balance sheet to identify any concentrations of
      credit;

                    
	 
      	
                      (b)

                    	
                      a
      written analysis of any concentration of credit identified above in order
      to identify and assess the inherent credit, liquidity, and interest rate
      risk;

                    
	 
      	
                      (c)

                    	
                      policies
      and procedures to control and monitor concentration of credit;
      and;

                    
	 
      	
                      (d)

                    	
                      an
      action plan approved by the Board to reduce the risk of any concentration
      deemed imprudent in the above
analysis.

                    


            

          

        

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

        (4)           For
purposes of this Article, a concentration of credit is as defined in the "Loan
Portfolio Management” booklet of the Comptroller’s
Handbook.

        (5)           The
Board shall ensure the formulation of Board-approved commercial real estate
exposure limits and sub-limits covering non-owner occupied and owner occupied
properties and addressing property type and geographic location.

        (6)           The
Board shall ensure that future concentrations of credit are subject to the
analysis required by sub-paragraph (b) of paragraph (3) in this Article and that
the analysis demonstrates that the concentration will not subject the Bank to
undue credit or interest rate risk.

        (7)           The
Board shall forward a copy of any analysis performed on existing or potential
concentrations of credit to the Assistant Deputy Comptroller immediately
following the review.

        (8)           The
Board shall ensure that the Bank has satisfactory processes, personnel and
control systems to ensure implementation of and adherence to the program
developed pursuant to this Article.


        Article
IX

        LIQUIDITY AND CONTINGENCY
FUNDING PLAN

        (1)           Within
ninety (90) days, the Board shall review and revise the Bank’s Contingency
Funding Plan (CFP) to address matters in the ROE.  The Board shall
refer to the “Liquidity” booklet of the Comptroller’s Handbook as well as other
current regulatory materials for guidance.  The CFP shall be enhanced,
at a minimum, to address:

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

        
          
            
              	 
      	
                      (a)

                    	
                      Expanding
      the number of crisis scenarios to include a comprehensive list of
      unplanned or stress events that could cause a liquidity
      crisis;

                    
	 
      	
                      (b)

                    	
                      Defining
      responsibilities and decision-making authority for all personnel in a
      crisis situation; and

                    
	 
      	
                      (c)

                    	
                      Expanding
      the “Liabilities” part of the “Sources of Liquidity” section to include
      all wholesale funding and borrowing
sources.

                    


            

          

        

        (2)           Within
ninety (90) days, the Board shall ensure that appropriate and prudent risk
limits are established and incorporated into the Bank’s ALCO
policy.

        (3)           Upon
adoption, a copy of the enhanced CFP and ALCO policy shall be forwarded to the
Assistant Deputy Comptroller for review.

        (4)           The
Board shall ensure that the Bank has satisfactory processes, personnel, and
control systems to ensure implementation of and adherence to the policy
developed pursuant to this Article.


        Article
X

        BROKERED
DEPOSITS

        (1)           The
Bank may accept Brokered Deposits (as defined by 12 C.F.R. § 337.6(a)(2)) for
deposit at the Bank not to exceed five (5) percent of total
deposits.  The foregoing restriction shall not apply to the
following:  retail CDARS deposits (i.e., deposits accepted from Bank
customers for placement in the CDARS diversified bank deposit program); or
wholesale CDARS deposits (i.e., the Bank’s participation in the CDARS program as
an issuer of deposits to  customers of other banks in the CDARS
program) not to exceed ten (10) percent of total deposits.

        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

                      
 (2)           The
limitation of paragraph (1) shall include the acquisition of Brokered Deposits
through any transfer, purchase, or sale of assets, including Federal funds
transactions.

        (3)           If
the Bank seeks to acquire Brokered Deposits exceeding the limitation in
paragraph (1), the Board shall apply to the Assistant Deputy Comptroller for
written permission.  Such application shall contain, at a minimum, the
following:

        
          
            
              	 
      	
                      (a)

                    	
                      the
      dollar volume, maturities, and cost of the Brokered Deposits to be
      acquired;

                    
	 
      	
                      (b)

                    	
                      the
      proposed use of the Brokered Deposits, e.g., short-term liquidity or
      restructuring of liabilities to reduce cost;

                    
	 
      	
                      (c)

                    	
                      alternative
      funding sources available to the Bank; and

                    
	 
      	
                      (d)

                    	
                      the
      reasons why the Bank believes that the acceptance of the Brokered Deposits
      does not constitute an unsafe and unsound practice in its particular
      circumstances.

                    
	 
      	
                      (e)

                    	
                      The
      Assistant Deputy Comptroller may require the submission of such additional
      information as necessary to make an informed decision.  Upon
      consideration of the Bank’s application, the Assistant Deputy Comptroller
      will determine whether the proposed acquisition of Brokered Deposits may
      be accomplished in a safe and sound manner and may condition the Bank’s
      acquisition as the Assistant Deputy Comptroller shall deem
      appropriate.

                    
	 
      	
                      (f)

                    	
                      Nothing
      in this article shall relieve the Bank of its obligation under 12 U.S.C. §
      1831f to seek necessary approvals from the Federal Deposit Insurance
      Corporation before accepting Brokered Deposits and to comply with all the
      requirements of 12 U.S.C. §
1831f.

                    


            

          

        

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

        Article
XI

        INTERNAL
AUDIT

        (1)           Within
sixty (60) days, the Board shall adopt, implement, and thereafter ensure Bank
adherence to an independent, internal audit program that includes the
following:

        
          
            
              	 
      	
                      (a)

                    	
                      Policies
      and procedures to improve effectiveness of Board Audit Committee oversight
      to ensure an adequate internal audit program, qualified and sufficient
      internal audit staff, timely correction of identified deficiencies, and an
      effectively administered audit program;

                    
	 
      	
                      (b)

                    	
                      Ensure
      that the audit function is supported by an adequately staffed department
      or outside firm with respect to both the experience level and number of
      the individuals employed;

                    
	 
      	
                      (c)

                    	
                      Development
      of a formal program for professional development and training of the
      auditor’s assistants to include appropriate training;

                    
	 
      	
                      (d)

                    	
                      Provide
      documentation in the work papers that is fully supportive of the analysis
      and conclusions performed for each audit procedure; and

                    
	 
      	
                      (e)

                    	
                      Ensure
      areas of concern noted in the ROE receive appropriate corrective
      action.

                    


            

          

        

        (2)           The
Board shall ensure that the Bank has satisfactory processes, personnel, and
control systems to ensure implementation of and adherence to the program
developed pursuant to this Article.

        (3)           Upon
adoption, a copy of the internal audit program shall be promptly submitted to
the Assistant Deputy Comptroller.

        
          
            
            

          

          
            17

            
              

            

          

          
            
            

          

        

        Article
XII

        BANK SECRECY ACT INTERNAL
CONTROLS

        (1)           The
Board shall promptly take all steps necessary to ensure improvement of the
Bank’s BSA/Anti-Money Laundering (AML) program to address each deficiency cited
in the ROE or any supervisory communication to include Enhanced Due Diligence
(EDD), Management Information Systems, Independent Testing, and the independence
and staffing of the BSA/AML compliance department.

        (2)           Within
sixty (60) days of the date of this Agreement, the Board shall develop,
implement, and thereafter ensure Bank adherence to an effective EDD
process.  An effective EDD monitoring program must include, at a
minimum, the following:

        
          
            
              
                
                  
                    	 
      	
                            (a)

                          	
                            the
      development of EDD policies, procedures, and processes to effectively
      monitor bank customers that pose high money laundering or terrorist
      financing risks;

                          
	 
      	
                            (b)

                          	
                            a
      closer review of high-risk customers and their transactions at account
      opening and more frequently throughout the term of their relationships
      with the Bank;

                          
	 
      	
                            (c)

                          	
                            maintaining
      all information used by the Bank to know its customer in the customer
      file;

                          
	 
      	
                            (d)

                          	
                            obtaining
      legal counsel advice when the Bank conducts transactions on behalf of
      entities or individuals in high-risk industries, transactions, and
      geographical locations;

                          
	 
      	
                            (e)

                          	
                            obtaining
      legal counsel advice on the legality of high-risk customers noted in the
      ROE and thoroughly investigating the accounts noted in the ROE as well as
      all other high-risk accounts to determine if there is any suspicious
      activity and to file any corresponding Suspicious Activity Reports in
      appropriate
cases;

                          


                  

                

              

            

          

        

        
          
            
            

          

          
            18

            
              

            

          

          
            
            

          

           

          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	 
      	
                                            (f)

                                          	
                                            ensuring
      appropriate MIS relating to the high-risk customers is provided to the
      compliance committee;

                                          
	 
      	
                                            (g)

                                          	
                                            providing
      BSA staff with ample external training specific to customer due diligence
      and EDD; and

                                          
	 
      	
                                            (h)

                                          	
                                            ensuring
      that internal audit assesses the reasonableness and quality of EDD
      monitoring.

                                          


                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

            (3)           Within
sixty (60) days of the date of this Agreement, the Board shall address concerns
in the ROE regarding the Bank’s suspicious activity monitoring
process.  This includes an at least six-month look-back on wire
transfer transactions performed prior to the installation of the automated
system.  If suspicious activity is detected from this review, a
further look-back should be performed for an appropriate period of
time.

          

        

        (4)           Within
sixty (60) days of the date of this Agreement, the Board shall develop,
implement, and thereafter ensure MIS used to detect suspicious activity related
to cash activity is accurate and reliable.  The Board must also ensure
training is provided to Bank staff to ensure that all transactions entered into
the Bank’s system are performed correctly and that all non-cash transaction are
not entered as cash transactions.  The Bank must contact the provider
of the system to resolve any non-cash activity that continues to show up on the
cash reports.

        (5)           Within
sixty (60) days of this Agreement, the Board shall evaluate the responsibilities
of the BSA compliance staff and determine if there is sufficient independence
and that the BSA staff has sufficient time to manage the BSA/AML
program.  The Board shall also determine if the BSA compliance staff
has the necessary expertise to administer an effective BSA/AML compliance
program and assess their training needs to ensure that the BSA compliance staff
is fully knowledgeable of the BSA and related regulations.

        
          
            
            

          

          
            19

            
              

            

          

          
            
            

          

        

        (6)           The
Board shall ensure that the Bank has satisfactory processes, personnel, and
control systems to implement and adhere to the program developed pursuant to
this Article.

        Article
XIII

        CLOSING

        (1)           Although
the Board has agreed to submit certain programs and reports to the Assistant
Deputy Comptroller for review or prior written determination of no supervisory
objection, the Board has the ultimate responsibility for proper and sound
management of the Bank.

        (2)           It
is expressly and clearly understood that if, at any time, the Comptroller deems
it appropriate in fulfilling the responsibilities placed upon him/her by the
several laws of the United States of America to undertake any action affecting
the Bank, nothing in this Agreement shall in any way inhibit, estop, bar, or
otherwise prevent the Comptroller from so doing.

        (3)           Any
time limitations imposed by this Agreement shall begin to run from the effective
date of this Agreement.  Such time requirements may be extended in
writing by the Assistant Deputy Comptroller for good cause upon written
application by the Board.

        (4)           The
provisions of this Agreement shall be effective upon execution by the parties
hereto and its provisions shall continue in full force and effect unless or
until such provisions are amended in writing by mutual consent of the parties to
the Agreement or excepted, waived, or terminated in writing by the
Comptroller.

        
          
            
            

          

          
            20

            
              

            

          

          
            
            

          

        

        (5)           This
Agreement is intended to be, and shall be construed to be, a supervisory
“written agreement entered into with the agency” as contemplated by 12 U.S.C. §
1818(b)(1), and expressly does not form, and may not be construed to form, a
contract binding on the Comptroller of the United
States.  Notwithstanding the absence of mutuality of obligation, or of
consideration, or of a contract, the Comptroller may enforce any of the
commitments or obligations herein undertaken by the Bank under his supervisory
powers, including 12 U.S.C. §
1818(b)(1), and not as a matter of contract law.  The Bank expressly
acknowledges that neither the Bank nor the Comptroller has any intention to
enter into a contract.  The Bank also expressly acknowledges that no
officer or employee of the Office of the Comptroller of the Currency has
statutory or other authority to bind the United States, the U.S. Treasury
Department, the Comptroller, or any other federal bank regulatory agency or
entity, or any officer or employee of any of those entities to a contract
affecting the Comptroller’s exercise of his supervisory
responsibilities.  The terms of this Agreement, including this
paragraph, are not subject to amendment or modification by any extraneous
expression, prior agreements or prior arrangements between the parties, whether
oral or written.

        IN
TESTIMONY WHEREOF, the undersigned, authorized by the Comptroller, has hereunto
set his hand on behalf of the Comptroller.

         

        
          
            
              	
                      /s/ Melissa F. Scofield

                    	
                      2/9/09

                    
	
                      Melissa
      F. Scofield

                    	
                      Date

                    
	
                      Assistant
      Deputy Comptroller

                    	 
      
	
                      Comptroller
      of the Currency

                    	 
      


            

          

        

        


        
          
            
            

          

          
            21

            
              

            

          

          
            
            

          

        

        IN
TESTIMONY WHEREOF, the undersigned, as the duly elected and acting Board of
Directors of the Bank, have hereunto set their hands on behalf of the
Bank.

        
          
            	
                    /s/
      Philip W. Wolford

                  	
                    2/9/09

                  
	
                    Philip
      W. Wolford

                  	
                    Date

                  
	 
      	 
      
	
                    /s/
      Angelo De Caro

                  	
                    2/9/09

                  
	
                    Angelo
      De Caro

                  	
                    Date

                  
	 
      	 
      
	
                    /s/
      L. Morris Glucksman

                  	
                    2/9/09

                  
	
                    L.
      Morris Glucksman

                  	
                    Date

                  
	 
      	 
      
	
                    /s/
      Charles F. Howell

                  	
                    2/9/09

                  
	
                    Charles
      F. Howell

                  	
                    Date

                  
	 
      	 
      
	
                    /s/
      John Geohegan

                  	
                    2/9/09

                  
	
                    John
      Geohegan

                  	
                    Date

                  
	 
      	 
      
	
                    /s/
      John J. Ferguson

                  	
                    2/9/09

                  
	
                    John
      J. Ferguson

                  	
                    Date

                  
	 
      	 
      
	
                    /s/
      Robert F. O’Conner

                  	
                    2/9/09

                  
	
                    Robert
      F. O’Conner

                  	
                    Date

                  
	 
      	 
      
	
                    /s/
      Raymond B. Smyth

                  	
                    2/9/09

                  
	
                    Raymond
      B. Smyth

                  	
                    Date

                  
	 
      	 
      
	
                    /s/
      Michael F. Intrieri

                  	
                    2/9/09

                  
	
                    Michael
      F. Intrieri

                  	
                    Date

                  
	 
      	 
      
	
                    /s/
      Brian A. Fitzgerald

                  	
                    2/9/09

                  
	
                    Brian
      A. Fitzgerald

                  	
                    Date

                  


          

        

        


        
          
            
            

          

          
            22

            
              

            

          

          
            
            

          

        

        APPENDIX
A

        Patriot
Natonal Bank

         Stamford,
CT

        


        


        CRITICIZED
ASSET REPORT AS OF:  ____________________________________

        ___________________________________________________________________

        BORROWER(S):

        


        ASSET
BALANCE(S) AND OCC RATING (SM, SUBSTANDARD, DOUBTFUL OR LOSS):

        $_______________________________                            CRITICISM___________________

        


        AMOUNT
CHARGED OFF TO
DATE                                    ____________________________________

        


        FUTURE
POTENTIAL
CHARGE-OFF                                      ____________________________________

        ________________________________________________________________________

        PRESENT
STATUS (Fully explain any increase in outstanding balance; include past due
status, 

        nonperforming,
significant progress or deterioration, etc.):

        


        
 

        ________________________________________________________________________

        FINANCIAL
AND/OR COLLATERAL SUPPORT (include brief summary of most current 

        financial
information, appraised value of collateral and/or estimated value and date
thereof, 

        bank’s
lien position and amount of available equity, if any, guarantor(s) info,
etc.):

        


        


        


        ________________________________________________________________________

        PROPOSED
PLAN OF ACTION TO ELIMINATE ASSET CRITICISM(S) AND TIME 

        FRAME FOR
ITS ACCOMPLISHMENT:

        


        


        


        ________________________________________________________________________

        IDENTIFIED
SOURCE OF REPAYMENT AND DEFINED REPAYMENT PROGRAM 

        (repayment
program should coincide with source of repayment):

        


        


        


        ________________________________________________________________________

        Use this
form for reporting each criticized asset that exceeds ______ dollars ($______)
and retain the original in the credit file for review by the
examiners.  Submit your reports (monthly/quarterly) until notified
otherwise, in writing, by the Assistant Deputy Comptroller.

         

         

         23