Exhibit 10.1


 


UNITED STATES OF AMERICA


BEFORE THE


BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM


WASHINGTON, D.C.


 


	
  Written Agreement by and
  between

  	
   

  
	
   

  	
  Docket No. 09-188-WA/RB-HC

  
	
  FIRST MARINER BANCORP

  	
   

  
	
  Baltimore, Maryland

  	
   

  
	
   

  	
   

  
	
  and

  	
   

  
	
   

  	
   

  
	
  FEDERAL RESERVE BANK OF RICHMOND

  	
   

  
	
  Richmond, Virginia

  	
   

  



 


WHEREAS,
First Mariner Bancorp, Baltimore, Maryland (“First Mariner”), a registered bank
holding company, owns and controls First Mariner Bank, Baltimore, Maryland (the
“Bank”), a state chartered nonmember bank, and various nonbank subsidiaries;


 


WHEREAS,
it is the common goal of First Mariner and the Federal Reserve Bank of Richmond
(the “Reserve Bank”) to maintain the financial soundness of First Mariner so
that First Mariner may serve as a source of strength to the Bank;


 


WHEREAS,
First Mariner and the Reserve Bank have mutually agreed to enter into this Written
Agreement (the “Agreement”); and


 


WHEREAS,
on November 24, 2009, the board of directors of First Mariner, at a duly
constituted meeting, adopted a resolution authorizing and directing Edwin F.
Hale, Sr. to enter into this Agreement on behalf of First Mariner, and consenting
to compliance with each and every provision of this Agreement by First Mariner
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, First Mariner and the Reserve Bank agree as follows:


 


Dividends and Distributions


 


1.                                       (a)                                  First Mariner
shall not declare or pay any dividends without the prior written approval of
the Reserve Bank and 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”).


 


(b)           First Mariner 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.


 


(c)           First Mariner 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 and the
Director.


 


(d)           All requests for
prior approval shall be received by the Reserve Bank 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
First Mariner’s capital, earnings, and cash flow; the Bank’s capital, asset
quality, earnings, and allowance for loan and lease losses (the “ALLL”); and
identification of the sources of funds for the proposed payment or
distribution. For requests to declare or pay dividends, First Mariner 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


 


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Bank
Holding Companies, dated November 14, 1985 (Federal Reserve Regulatory
Service, 4-877 at page 4-323).


 


Debt and Stock Redemption


 


2.                                       (a)                                  First Mariner
and any nonbank subsidiaries shall not, directly or indirectly, incur,
increase, or guarantee any debt without the prior written approval of the
Reserve Bank. 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)           First Mariner shall
not, directly or indirectly, purchase or redeem any shares of its stock without
the prior written approval of the Reserve Bank.


 


Capital Plan


 


3.                                       Within 60 days
of this Agreement, First Mariner shall submit to the Reserve Bank an acceptable
written plan to maintain sufficient capital at First Mariner on a consolidated
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
Federal Deposit Insurance Corporation (the “FDIC”);


 


(b)           the adequacy of the
Bank’s capital, taking into account the volume of classified credits,
concentrations of credit, ALLL, current and projected asset growth, and
projected retained earnings;


 


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(c)           the source and
timing of additional funds necessary 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 the FDIC or the State of Maryland Division of
Financial Regulation; 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 First Mariner serve as a source of strength to the Bank.


 


4.                                       First Mariner
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 capital ratios
fall below the approved plan’s minimum ratios. Together with the notification,
First Mariner shall submit an acceptable capital plan that details the steps
First Mariner will take to increase the consolidated organization’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, First Mariner shall comply with the notice
provisions of section 32 of the FDI Act (12 U.S.C. § 183li) and
Subpart H of Regulation Y of the Board of Governors (12 C.F.R. §§ 225.71 et seq.).


 


(b)           First Mariner 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).


 


4

















 


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 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,
report of changes in stockholders’ equity.


 


Approval and Implementation of Plan


 


7.                                       (a)                                  First Mariner
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, First Mariner shall adopt the approved capital
plan. Upon adoption, First Mariner 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)

  	
  A. Linwood Gill, III

  
	
   

  	
  Vice President

  
	
   

  	
  Federal Reserve Bank of
  Richmond

  
	
   

  	
  P.O. Box 27622

  
	
   

  	
  Richmond, Virginia 23261

  
	
   

  	
   

  
	
  (b)

  	
  Edwin F. Hale Sr.

  
	
   

  	
  CEO/Chairman

  
	
   

  	
  First Mariner Bancorp

  
	
   

  	
  1501 South Clinton
  Street

  
	
   

  	
  Baltimore, Maryland 21224

  



 


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Miscellaneous


 


9.                                       Notwithstanding
any provision of this Agreement, the Reserve Bank may, in its sole discretion,
grant written extensions of time to First Mariner to comply with any provision
of this Agreement.


 


10.                                 The provisions
of this Agreement shall be binding upon First Mariner 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.


 


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


 


13.                                 Pursuant to
section 50 of the FDI Act (12 U.S.C. § 1831aa), 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 24th day of November, 2009.


 


 


	
  FIRST MARINER BANCORP 

  	
   

  	
  FEDERAL RESERVE BANK OF
  RICHMOND

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Edwin F. Hale, Sr.

  	
   

  	
  By:

  	
  /s/ A. Linwood Gill III

  
	
   

  	
  Edwin F. Hale, Sr.

  	
   

  	
   

  	
  A. Linwood Gill III

  



 


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