Exhibit 10.1


 


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

  	
   

  	
   

  
	
   

  	
   

  	
  Docket
  No. 09-181-WA/RB-HC

  
	
  WEST
  COAST BANCORP

  	
   

  	
   

  
	
  Lake
  Oswego, 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, West Coast Bancorp, Lake Oswego,
Oregon (“Bancorp”), a registered bank holding company, owns and controls West
Coast Bank, Lake Oswego, 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 November 24, 2009 the board of directors of Bancorp, at a
duly constituted meeting, adopted a resolution authorizing and directing Robert
D. Sznewajs 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.


 


(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, 


 


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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 updated 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, taking into account the $134.2 million in capital that was
injected into the Bank by Bancorp on October 26, 2009;


 


(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 I, 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.


 


Cash Flow Projections


 


5.                                     Within 90 days of this Agreement, Bancorp shall submit to
the Reserve Bank a written statement of Bancorp’s planned sources and uses of
cash for debt service, operating expenses, and other purposes (“Cash Flow
Projection”) for 2010.  Bancorp shall
submit to the Reserve Bank
a Cash Flow Projection for each calendar year subsequent to 2010 at least one
month prior to the beginning of that calendar year.


 


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Compliance with Laws and Regulations


 


6.                                     (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. § 1831i) and
Subpart H of Regulation Y of the Board of Governors (12 C.F.R. §§ 225.71 et seq.).


 


(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


 


7.                                     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


 


8.                                     (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.


 


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Communications


 


9.                                     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 945

San Francisco, California  94105


 


(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)           Mr. Robert
Sznewajs

President and Chief Executive Officer

West Coast Bancorp

5335 SW Meadows Road, Suite 201

Lake Oswego, Oregon  97035


 


Miscellaneous


 


10.          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.


 


11.          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.


 


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


 


13.          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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14.          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 18th day of December, 2009.


 


	
  WEST
  COAST BANCORP

  	
   

  	
  FEDERAL
  RESERVE BANK OF SAN FRANCISCO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Robert D. Sznewajs

  	
   

  	
  By:

  	
  /s/
  Kevin Zerbe

  
	
  Robert
  D. Sznewajs

  	
   

  	
  Kevin
  Zerbe

  
	
  President
  and CEO

  	
   

  	
  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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