ex10-3.htm


    
      

    

    Exhibit
10.3

     

    UNITED
STATES OF AMERICA

    Before
the

    OFFICE
OF THRIFT SUPERVISION

     

     

     

    
      	 
      	 
      	 
      
	 
      	
              )

            	 
      
	
              In
      the Matter of

            	
              )

            	
              Order
      No.: CN 09-21

            
	 
      	
              )

            	 
      
	 
      	
              )

            	 
      
	
                    
                FIRST
      FEDERAL BANKSHARES, INC.

              

            	
              )

            	
              Effective
      Date: July 31, 2009

            
	 
      	
              )

            	 
      
	
              Sioux
      City, Iowa

            	
              )

            	 
      
	
              OTS
      Docket No. H3439

            	
              )

            	 
      
	 
      	
              )

            	 
      


    

     

    
      


       

      STIPULATION AND CONSENT TO
ISSUANCE OF ORDER TO CEASE AND DESIST

       

      WHEREAS, the Office of Thrift
Supervision (OTS), acting by and through its Regional Director for the Central
Region (Regional Director), and based upon information derived from the exercise
of its regulatory and supervisory responsibilities, has informed First Federal
Bankshares, Inc., Sioux City, Iowa, OTS Docket No.  H3439 (Holding
Company) that the OTS is of the opinion that grounds exist to initiate an
administrative proceeding against the Holding Company pursuant to 12 U.S.C. §
1818(b);

       

      WHEREAS, the Regional Director,
pursuant to delegated authority, is authorized to issue Orders to Cease and
Desist where a savings and loan holding company has consented to the issuance of
an order; and

       

      WHEREAS, the Holding Company
desires to cooperate with the OTS to avoid the time and expense of such
administrative cease and desist proceeding by entering into this Stipulation and
Consent to the Issuance of Order to Cease and Desist (Stipulation) and, without
admitting or denying that such grounds exist, but only admitting the statements
and conclusions in Paragraphs 1 - 3 below concerning Jurisdiction, hereby
stipulates and agrees to the following terms:

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Jurisdiction.

       

      1.           The
Holding Company is a “savings and loan holding company” within the meaning of 12
U.S.C. § 1813(w)(3) and 12 U.S.C. § 1467a.  Accordingly, the Holding
Company is a “depository institution holding company” as that term is defined in
12 U.S.C. § 1813(w)(1).

       

      2.           Pursuant
to 12 U.S.C. § 1818(b)(9), the “appropriate Federal banking agency” may initiate
a cease and desist proceeding against a savings and loan holding company in the
same manner and to the same extent as a savings association for regulatory
violations and unsafe and unsound acts or practices.

       

      3.           Pursuant
to 12 U.S.C. § 1813(q), the Director of OTS is the “appropriate Federal banking
agency” with jurisdiction to maintain an administrative enforcement proceeding
against a savings and loan holding company.  Therefore, the Holding
Company is subject to the authority of the OTS to initiate and maintain an
administrative cease and desist proceeding against it pursuant to 12 U.S.C. §
1818(b).

       

      OTS Findings of
Fact.

       

      4.           Based
on its May 6, 2009 examination of the Holding Company, the OTS finds that the
Holding Company engaged in unsafe or unsound practices, including operating the
Holding Company with insufficient capital for its risk profile and with
inadequate earnings.

       

      Consent.

       

      5.           The
Holding Company consents to the issuance by the OTS of the accompanying Order to
Cease and Desist (Order).  The Holding Company further agrees to
comply with the terms of the Order upon the Effective Date of the Order and
stipulates that the Order complies with all requirements of law.

       

      

        First
Federal Bankshares, Inc.

        Stipulation
and Consent to Issuance of Order to Cease and Desist

        Page 2
of 6

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Finality.

       

      6.           The
Order is issued by the OTS under 12 U.S.C. § 1818(b).  Upon the
Effective Date, the Order shall be a final order, effective, and fully
enforceable by the OTS under the provisions of 12 U.S.C. § 1818(i).

       

      Waivers.

       

      7.           The
Holding Company waives the following:

      (a)           the
right to be served with a written notice of the OTS’s charges against it as
provided by 12 U.S.C. § 1818(b) and 12 C.F.R. Part 509;

       

      (b)           the
right to an administrative hearing of the OTS’s charges as provided by 12 U.S.C.
§ 1818(b) and 12 C.F.R. Part 509;

       

      (c)           the
right to seek judicial review of the Order, including, without limitation, any
such right provided by 12 U.S.C. § 1818(h), or otherwise to challenge the
validity of the Order; and

       

      (d)           any
and all claims against the OTS, including its employees and agents, and any
other governmental entity for the award of fees, costs, or expenses related to
this OTS enforcement matter and/or the Order, whether arising under common law,
federal statutes, or otherwise.

       

      OTS Authority Not
Affected.

       

      8.           Nothing
in this Stipulation or accompanying Order shall inhibit, estop, bar, or
otherwise prevent the OTS from taking any other action affecting the Holding
Company if, at any time, the OTS deems it appropriate to do so to fulfill the
responsibilities placed upon the OTS by law.

       

       

      
        First
Federal Bankshares, Inc.

        Stipulation
and Consent to Issuance of Order to Cease and Desist

        Page 3
of 6

      

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      Other Governmental Actions
Not Affected.

       

      9.           The
Holding Company acknowledges and agrees that its consent to the issuance of the
Order is solely for the purpose of resolving the matters addressed herein,
consistent with Paragraph 8 above, and does not otherwise release, discharge,
compromise, settle, dismiss, resolve, or in any way affect any actions, charges
against, or liability of the Holding Company that arise pursuant to this action
or otherwise, and that may be or have been brought by any governmental entity
other than the OTS.

       

      Miscellaneous.

       

      10.           The
laws of the United States of America shall govern the construction and validity
of this Stipulation and of the Order.

       

      11.           If
any provision of this Stipulation and/or the Order is ruled to be invalid,
illegal, or unenforceable by the decision of any Court of competent
jurisdiction, the validity, legality, and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby, unless
the Regional Director in his or her sole discretion determines
otherwise.

       

      12.           All
references to the OTS in this Stipulation and the Order shall also mean any of
the OTS’s predecessors, successors, and assigns.

       

      13.           The
section and paragraph headings in this Stipulation and the Order are for
convenience only and shall not affect the interpretation of this Stipulation or
the Order.

       

      14.           The
terms of this Stipulation and of the Order represent the final agreement of the
parties with respect to the subject matters thereof, and constitute the sole
agreement of the parties with respect to such subject matters.

       

      15.           The
Stipulation and Order shall remain in effect until terminated, modified, or
suspended in writing by the OTS, acting through its Regional Director or other
authorized representative.

       

       

      
        First
Federal Bankshares, Inc.

        Stipulation
and Consent to Issuance of Order to Cease and Desist

        Page 4
of 6

      

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      Signature of Directors/Board
Resolution.

       

      16.           Each
Director signing this Stipulation attests that he or she voted in favor of a
Board Resolution authorizing the consent of the Holding Company to the issuance
of the Order and the execution of the Stipulation.  This Stipulation
may be executed in counterparts by the directors after approval of the execution
of the Stipulation at a duly called board meeting.

      


      


      


      


      [Remainder
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      First
Federal Bankshares, Inc.

      Stipulation
and Consent to Issuance of Order to Cease and Desist

      Page 5
of 6

    

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

                   
WHEREFORE, the Holding Company, by its directors, executes this
Stipulation.

    
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              Accepted
      by:

            	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                    
                FIRST
      FEDERAL BANKSHARES, INC.

              

            	 
      	
              OFFICE
      OF THRIFT SUPERVISION

            	 
      
	
              Sioux
      City, Iowa

            	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
              By: 

            	
              /s/
      Arlene T. Curry

            	 
      	
              By: 

            	
              /s/
      Daniel T. McKee

            	 
      
	 
      	
              Arlene
      T. Curry, Chairman

            	 
      	 
      	
              Daniel
      T. McKee

            	 
      
	 
      	 
      	 
      	 
      	
              Regional
      Director, Central Region

            	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
              /s/
      Barry E. Backhaus

            	 
      	
              Date:
      See Effective Date on page 1

            	 
      
	 
      	
              Barry
      E. Backhaus, Director

            	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
              /s/
      Jon G. Cleghorn

            	 
      	 
      	 
      	 
      
	 
      	
              Jon
      G. Cleghorn, Director

            	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
              /s/
      Gary L. Evans

            	 
      	 
      	 
      	 
      
	 
      	
              Gary
      L. Evans, Director

            	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
              /s/
      Allen J. Johnson

            	 
      	 
      	 
      	 
      
	 
      	
              Allen
      J. Johnson, Director

            	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
              /s/
      Ronald A. Jorgensen

            	 
      	 
      	 
      	 
      
	 
      	
              Ronald
      A. Jorgensen, Director

            	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
              /s/
      David M. Roederer

            	 
      	 
      	 
      	 
      
	 
      	
              David
      M. Roederer, Director

            	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
              /s/
      Charles D. Terlouw

            	 
      	 
      	 
      	 
      
	 
      	
              Charles
      D. Terlouw, Director

            	 
      	 
      	 
      	 
      


    

     

    First
Federal Bankshares, Inc.

    Stipulation
and Consent to Issuance of Order to Cease and Desist

    Page 6
of 6