ex10-2.htm


    
      

    

    Exhibit
10.2


    
      	
              UNITED
      STATES OF AMERICA

            
	
              Before
      the

            
	
              OFFICE
      OF THRIFT SUPERVISION

            


    

     

     

    
 

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	 
      	
                                    )

                                  	 
      	 
      
	
                                    In
      the Matter of

                                  	
                                    )

                                  	 
      	
                                    Order
      No.: CN 09-20

                                  
	 
      	
                                    )

                                  	 
      	 
      
	 
      	
                                    )

                                  	 
      	 
      
	
                                    VANTUS
      BANK

                                  	
                                    )

                                  	 
      	
                                    Effective
      Date: July 31, 2009

                                  
	 
      	
                                    )

                                  	 
      	 
      
	
                                    Sioux
      City, Iowa

                                  	
                                    )

                                  	 
      	 
      
	
                                    OTS
      Docket No. 00190

                                  	
                                    )

                                  	 
      	 
      
	 
      	
                                    )

                                  	 
      	 
      


                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    ORDER TO CEASE AND
DESIST

     

                 WHEREAS, Vantus Bank, Sioux City, Iowa, OTS
Docket No. 00190 (Association), by and through its Board of Directors (Board),
has executed a Stipulation and Consent to the Issuance of an Order to Cease and
Desist (Stipulation); and

     

                 WHEREAS, the Association, by
executing the Stipulation, has consented and agreed to the issuance of this
Order to Cease and Desist (Order) by the Office of Thrift Supervision (OTS)
pursuant to 12 U.S.C. § 1818(b); and

     

                 WHEREAS, pursuant to delegated
authority, the OTS Regional Director for the Central Region (Regional Director)
is authorized to issue Orders to Cease and Desist where a savings association
has consented to the issuance of an order.

     

                 NOW, THEREFORE, IT IS ORDERED
that:

     

    Cease and
Desist.

     

    1.         The
Association and its directors, officers, and employees shall cease and desist
from any action (alone or with others) for or toward, causing, bringing about,
participating in, counseling, or aiding and abetting any unsafe or unsound
practices that resulted in a significant and increasing amount of classified
assets and inadequate capital to support the type and quality of the
Association’s assets.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Capital.

     

    2.          (a)
No later than December 31, 2009, the Association shall achieve and maintain: (i)
a Tier 1 (Core) Capital Ratio of at least eight percent (8%) and (ii) a Total
Risk-Based Capital Ratio of at least twelve percent (12%) after the funding of
an adequate Allowance for Loan and Lease Losses (ALLL).

     

                 (b)
The requirement in Subparagraph (a) above to meet and maintain a specific
capital level means that the Association may not be deemed to be
“well-capitalized” for purposes of 12 U.S.C. §1831o and 12 C.F.R. Part 565,
pursuant to 12 C.F.R. §565.4(b) (1) (iv).

     

    3.          (a)
By August 31, 2009, the Board shall adopt and submit to the Regional Director
for review and comment a written plan to achieve and maintain the Association’s
capital levels prescribed in Paragraph 2 of this Order (Capital Plan). The
Capital Plan shall cover the period beginning with the quarter ending June 30,
2009 through the quarter ending December 31, 2011. At a minimum, the Capital
Plan shall:

     

    
      
        
          
            	 
      	
                    (i)

                  	
                    take
      into consideration the requirements and restrictions imposed by this
      Order;

                  
	 
      	 
      	 
      
	 
      	
                    (ii)

                  	
                    detail
      capital enhancement strategies with specific narrative goals, which shall
      result in new equity and a capital infusion;

                  
	 	 	 
	 	
                    (iii)

                  	
                    consider
      and address the amount of additional capital that would be necessary to
      meet the capital requirements of Paragraph 2 of this Order under different
      forward-looking scenarios involving progressively stressed economic
      environments;

                  


          

        

      

    

     

    
      Vantus
Bank

      Order to
Cease and Desist

      Page 2
of 16

    

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      
        
          
            	 
      	
                    (iv)

                  	
                    identify
      the specific sources of additional capital;

                  
	 
      	 
      	 
      
	 
      	
                    (v)

                  	
                    detail
      timeframes by which the additional capital will be raised and provide
      specific target month-end capital levels; and

                  
	 
      	 
      	 
      
	 
      	
                    (vi)

                  	
                    provide
      for alternative methods to strengthen capital, should the primary sources
      identified under Paragraph 3(a)(iv) of this Order not be
      available.

                  


          

        

      

    

     

                 (b)
Within thirty (30) days after receiving any written comments from the Regional
Director, the Board shall revise the Capital Plan based on comments from the
Regional Director. Thereafter, the Board shall adopt and the Association shall
implement and comply with the Capital Plan. Within five (5) days of Board
approval of the Capital Plan, the Association shall send a copy of the final
Capital Plan adopted by the Board, along with the Board meeting minutes
reflecting its adoption to the Regional Director.

     

                 (c)
Once the Capital Plan is implemented, the Association shall operate within the
parameters of its Capital Plan. Any proposed material deviations from the
Capital Plan, including changes proposed by the Association, must be submitted
for the prior, written non-objection of the Regional Director. Requests for any
material deviations or changes must be submitted at least sixty (60) days before
a proposed change is implemented.

     

                 (d)
The Association shall notify the Regional Director regarding any material event
affecting or that may affect the capital or capital projections of the
Association within five (5) days after such event.

     

    
      Vantus
Bank

      Order to
Cease and Desist

      Page 3
of 16

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.          (a)
On a monthly basis, beginning with the month ending September 30, 2009, the
Association shall prepare and submit to the Board by the 10th day of
each month, a report that compares projected operating results contained within
the Capital Plan to actual results for the previous month (Capital Plan Variance
Report). The Board’s review of the Capital Plan Variance Report and assessment
of the Association’s compliance with the Capital Plan shall be fully documented
in the appropriate Board meeting minutes.

     

                 (b)
By the 15th day of
each month beginning with October of 2009, the Board shall provide the Regional
Director with a copy of the Capital Plan Variance Report and the Board meeting
minutes for the Board meeting at which such report was discussed.

     

    5.          (a)
In the event the Association has failed to submit an acceptable Capital Plan or
has failed to implement or adhere to its Capital Plan, the Board shall prepare
and submit a Contingency Plan in compliance with subparagraph 5(c) below to the
Regional Director for review and comment within thirty (30) days from either the
Association’s notice of its failure to implement or adhere to its Capital Plan
or the Association’s receipt of written notice from the Regional Director that
he has determined the Association has failed to submit an acceptable Capital
Plan or has failed to implement or adhere to its Capital Plan.

     

                 (b)
In the event the Association does not meet the capital ratios required by
subparagraph 2(a) above at any month end after December 31, 2009, the Board
shall prepare and submit a Contingency Plan in compliance with subparagraph 5(c)
below to the Regional Director for review and comment within thirty (30) days of
the end of the month.

     

                 (c)
The Contingency Plan required by this Paragraph 5 shall detail the actions to be
taken, with specific time frames, to achieve one of the following results within
sixty (60) days after implementation of the Contingency Plan: (a) merger with or
acquisition by another federally insured depository institution or holding
company thereof; or (b) voluntary liquidation by filing an appropriate
application with the OTS in conformity with federal laws and regulations. The
Contingency Plan shall be implemented by the Association immediately upon
notification by the Regional Director to implement the Contingency
Plan.

     

    
      Vantus
Bank

      Order to
Cease and Desist

      Page 4
of 16

    

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

                 (d)
Within fifteen (15) days after receiving any written comments from the Regional
Director to the Contingency Plan, the Board shall revise the Contingency Plan
based on comments from the Regional Director. Immediately thereafter, the Board
shall send a copy of the final Contingency Plan adopted by the Board, along with
the Board meeting minutes reflecting its adoption, to the Regional
Director.

     

                 (e)
By the first (1st) and fifteenth (15th) day of each month following
implementation of the Contingency Plan, the Association shall provide a written
status report (Contingency Plan Status Report) to the Regional Director
detailing the Association’s actions taken and progress in executing the
Contingency Plan. The Contingency Plan Status Report shall discuss and include
documents regarding any contacts with investment bankers, due diligence efforts,
offers relating to an acquisition or a merger, the execution of a letter of
intent or an agreement relating to the acquisition or merger of the Association,
and/or the termination of negotiations with a potential acquirer.

     

    Liquidity.

     

    6.          (a)
By August 31, 2009, the Board shall adopt and submit to the Regional Director
for review and comment a written liquidity management and contingency plan
(Liquidity Contingency Plan) that:

     

    
      
        	 
      	
                (i)

              	
                provides
      for the safe and sound management of liquidity in accordance with OTS
      Thrift Bulletin 77 and OTS Examination Handbook § 530;

              
	 
      	 
      	 
      
	 
      	
                (ii)

              	
                sets
      forth short-term and long-term sources of liquidity and cash flow
      requirements and sources;

              


      

    

     

    
      Vantus
Bank

      Order to
Cease and Desist

      Page 5
of 16

    

    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    
      
        	 
      	
                (iii)

              	
                addresses
      the Association’s capacity to borrow from wholesale funding sources, such
      as the Federal Home Loan Bank (FHLB) and Federal Reserve Bank
      (FRB);

              
	 
      	 
      	 
      
	 
      	
                (iv)

              	
                prescribes
      specific limits on funding concentrations and a minimum level of available
      unpledged liquid assets for meeting liquidity needs;

              
	 
      	 
      	 
      
	 
      	
                (v)

              	
                addresses
      the Association’s contingency plans in the event of unanticipated
      withdrawals of deposits or a reduction or elimination of current sources
      of funds;

              
	 
      	 
      	 
      
	 
      	
                (vi)

              	
                addresses
      any seasonal increases in loan funding or deposit
  outflows;

              
	 
      	 
      	 
      
	 
      	
                (vii)

              	
                provides
      for periodic stress testing of the availability of all funding sources
      under specific scenarios and various market conditions;

              
	 
      	 
      	 
      
	 
      	
                (viii)

              	
                addresses
      compliance with Paragraph 14 of this Order regarding the restrictions on
      brokered deposits, including, but not limited to the monitoring of
      interest rates paid on deposits for compliance with 12 C.F.R. § 337.6;
      and

              
	 
      	 
      	 
      
	 
      	
                (ix)

              	
                provides
      for the Association’s ongoing monitoring and Board oversight of the
      Association’s liquidity needs and available sources of liquidity,
      including a requirement that the Regional Director be notified immediately
      of any event that would limit the Association’s funding sources or
      available liquidity amounts.

              


      

    

     

                 (b)
Within thirty (30) days after receiving any written comments from the Regional
Director, the Board shall revise the Liquidity Contingency Plan based on
comments from the Regional Director. Immediately thereafter, the Board shall
adopt and the Association shall implement and comply with the Liquidity
Contingency Plan. Within five (5) days of Board approval of the Liquidity
Contingency Plan, the Association shall send a copy of the final Liquidity
Contingency Plan adopted by the Board, along with the Board meeting minutes
reflecting its adoption to the Regional Director.

     

    
      Vantus
Bank

      Order to
Cease and Desist

      Page 6
of 16

    

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    7.          Within
fifteen (15) days after the end of each quarter, beginning with the quarter
ending September 30, 2009, the Association shall submit a report (Liquidity
Status Report) to the Board, with a copy to the Regional Director, regarding:
(a) the Association’s liquidity position; (b) anticipated sources of funds that
would allow the Association to withstand extraordinary demand against its
funding base; (c) the retention of specific assets that can be liquidated within
thirty (30) days; (d) the identification of all sources of funds to meet the
Association’s anticipated and extraordinary liquidity needs on a rolling basis
for the next twelve (12) months; and (e) compliance with the Association’s
Liquidity Contingency Plan. The Board’s review of each Liquidity Status Report
shall be documented in the Board meeting minutes.

     

    Collateralized Debt
Obligations and Trust Preferred Securities.

     

    8.          (a)
Effective immediately, the Association shall not purchase or commit to purchase,
directly or indirectly through a subsidiary, collateralized debt obligations
(CDOs) or trust preferred securities (TPSs) without prior written approval of
the Regional Director.

     

                 (b)
Within ten (10) days after receipt of any information regarding a CDO or TPS in
the Association’s portfolio that has or may have the potential to impact the
Association’s capital or earnings, the Association shall notify the Regional
Director in writing of such information.

     

    
      Vantus
Bank

      Order to
Cease and Desist

      Page 7
of 16

    

    
      
         


      

      
         


        
          

        

      

      
         


      

    

    
       

      9.        Within
thirty (30) days after the end of each quarter, beginning with the quarter
ending June 30, 2009, the Association shall submit a written status report to
the Board, with a copy to the Regional Director, on each individual security in
the Association’s CDO and TPS portfolio (CDO/TPS
Status Report). The CDO/TPS Status Report shall include for each individual
security the:

      
        
          	 
      	 
      
	 
      	
                  (a)
      current market value and a description of the underlying support for the
      value;

                
	 
      	 
      
	 
      	
                  (b)
      current investment grade rating of the security and the source of such
      rating;

                
	 
      	 
      
	 
      	
                  (c)
      amount of unrealized loss;

                
	 
      	 
      
	 
      	
                  (d)
      required accounting adjustments under generally accepted accounting
      principles with respect to the unrealized loss; and

                
	 
      	 
      
	 
      	
                  (e)
      potential impact of accounting adjustments or changes in the investment
      grade rating on the Association’s capital
  ratios.

                


        

      

       

      Criticized Asset
Report.

       

      
        
          
            
              	10.    
      (a)
      Within thirty (30) days after the end of each quarter, beginning with the
      quarter ending September 30, 2009, the Association shall submit a status
      report to the Board, with a copy to the Regional Director, covering the
      five largest classified assets and three largest assets that are
      classified as special mention on the Association’s books at the end of the
      quarter (Criticized Asset Report). For each of the specified criticized
      assets, the Criticized Asset Report
shall:


            

          

        

      

      


      
        
          
            	 
      	
                    (i)

                  	
                    identify
      significant loan underwriting, documentation, or administration
      deficiencies, if any;

                  
	 
      	 
      	 
      
	 
      	
                    (ii)

                  	
                    set
      forth the date(s) of payments due and the most recent payment
      made;

                  
	 
      	 
      	 
      
	 
      	
                    (iii)

                  	
                    set
      forth the amount of interest reserve remaining and the contractually
      required debt service;

                  
	 
      	 
      	 
      
	 
      	
                    (iv)

                  	
                    provide
      the estimated value of the collateral, the date of the valuation, and
      findings from any property
inspections;

                  


          

        

      

      


      Vantus
Bank

      Order to
Cease and Desist

      Page 8 of
16

      
        
           


        

        
           


          
            

          

        

        
           


        

      

      


      
        
          
            
              
                	 
      	
                        (v)

                      	
                        summarize
      the borrower’s and/or guarantor’s current financial
    condition;

                      
	 
      	 
      	 
      
	 
      	
                        (vi)

                      	
                        set
      forth the appropriate asset classification category and the rationale for
      the asset classification category;

                      
	 
      	 
      	 
      
	 
      	
                        (vii)

                      	
                        identify
      the specific risks with respect to the asset; 

                      
	 	 	 
	 	(viii) 	identify
      whether the loan is impaired and provide an estimate of the loan
      impairment; 
	 
      	 
      	 
      
	 
      	
                        (ix)

                      	
                        set
      forth any required specific valuation allowances, charge-offs, or
      allocation of ALLL; and

                      
	 
      	 
      	 
      
	 
      	
                        (x)

                      	
                        set
      forth the current strategy for resolving the criticized
    asset.

                      


              

            

          

        

      

       

               
(b) The Board’s review of the quarterly Criticized Asset Report shall be fully
documented
in the Board minutes.

       

      Business
Plan.

       

      
        11.    
(a)
By August 31, 2009, the Board shall adopt and submit to the Regional Director
for review and comment a revised comprehensive business plan for the period
beginning with the quarter ending June 30, 2009 through the quarter ending
December 31, 2011 (Business Plan). At a minimum, the Business Plan shall include
the requirements contained within this Order and
shall:

      

      
        
          
            
              	 	 	 
	 
      	
                      (i)

                    	
                      set
      forth well supported and realistic strategies to improve earnings and the
      net interest margin;

                    
	 
      	 
      	 
      
	 
      	
                      (ii)

                    	
                      provide
      for capital levels required by Paragraph 2 of this Order and incorporate
      the Association’s capital restoration plan submitted to the Regional
      Director pursuant to 12 C.F.R. Part 565;

                    
	 
      	 
      	 
      
	 
      	
                      (iii)

                    	
                      set
      forth the methodologies for the determination of the expected charge-offs
      and the disposition of problem
assets;

                    


            

          

        

      

       

      Vantus
Bank

      Order to
Cease and Desist

      Page 9 of
16

      
        
           


        

        
           


          
            

          

        

        
           


        

      

      


      
        
          
            	 
      	
                    (iv)

                  	
                    incorporate
      the Liquidity Contingency Plan provided for by Paragraph 6(a) of this
      Order;

                  
	 
      	 
      	 
      
	 
      	
                    (v)

                  	
                    detail
      strategies to stress-test and adjust earnings forecasts based on
      continuing operating results, economic conditions and credit quality of
      the loan portfolio; and

                  
	 
      	 
      	 
      
	 
      	
                    (vi)

                  	
                    provide
      quarterly detailed pro forma balance sheets and income statements for a
      rolling three-year period beginning with the quarter ending June 30, 2009
      through the quarter ending December 31,
2011.

                  


          

        

      

      


      
        
          
            
              	         
      (b) The Business Plan shall include all assumptions used in the pro
      formas, such as: (i) the assumed interest rate scenarios; (ii) assumptions
      used for noninterest income and noninterest expense, including, but not
      limited to the reduction of personnel expense; (iii) assumptions used to
      determine other than temporary impairment (OTTI) of CDOs and TPSs and
      related accounting charges; (iv) assumptions used to determine the ALLL;
      (v) assumptions for loan origination rates, using recent experience and
      taking into consideration current national and regional economic
      conditions; and (vi) assumptions supporting the cost of funds
      projections.
	 
      	 
      
	
                               
      (c) Within thirty (30) days after receiving the Regional Director’s
      written comments, the Board shall revise the Business Plan based on
      comments from the Regional Director. Thereafter, the Board shall adopt and
      the Association shall implement and comply with the Business Plan. Within
      five (5) days of Board approval of the Business Plan, the Association
      shall send a copy of the final Business Plan adopted by the Board, along
      with the Board meeting minutes reflecting its adoption to the Regional
      Director.

                    


            

          

        

      

      


      Vantus
Bank

      Order to
Cease and Desist

      Page 10
of 16

      
        
           


        

        
           


          
            

          

        

        
           


        

      

      


      
        
          
            
              
                
                  
                    
                      	
                                       
      (d) Once
      the Business Plan is implemented, the Association shall operate within the
      parameters of its Business Plan. Any proposed material deviations from the
      Business Plan, including changes proposed by the Association, must be
      submitted for the prior, written non-objection of the Regional Director.
      Requests for any material deviations or changes must be submitted at least
      sixty (60) days before a proposed change is implemented. The Association
      shall notify the Regional Director regarding any material event affecting
      or that may affect the balance sheet, capital, or the cash flow of the
      Association within five (5) business days
      after such event.

                            
	 
      	 
      	 
      
	
                              12.   
      (a)
      On
      a quarterly basis, beginning with the quarter ending September 30, 2009,
      the Association shall prepare and submit to the Board a report that
      compares projected operating results contained within the Business Plan to
      actual results (Business Plan Variance Report). The Board shall review
      each Business Plan Variance Report and address external and internal risks
      that may affect the Association’s ability to successfully implement the
      Business Plan. This review shall include, but not be limited to, adverse
      scenarios relating to asset or liability mixes, interest rates, staffing
      levels and expertise, operating expenses, marketing costs, and economic
      conditions in the markets in which the Association is operating. The
      Board’s review of the Business Plan Variance Report and assessment of the
      Association’s compliance with the Business Plan shall be fully documented
      in the appropriate Board meeting minutes.

                            
	 
      	 
      	 
      
	
                                       
      (b) Within
      forty-five (45) days after the close of each quarter beginning with the
      quarter ending September 30, 2009, the Board shall provide the Regional
      Director with a copy of each Business Plan Variance Report and the Board
      meeting minutes for the Board meeting at which such report was
      discussed.

                            


                    

                  

                

              

            

          

        

      

      


      Vantus
Bank

      Order to
Cease and Desist

      Page 11
of 16

      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Growth.

      
        
          
            
              	 
      	 
      	 
      
	13.    
      Effective
      immediately, the Association is subject to and shall comply with the
      requirements and provisions of OTS Regulatory Bulletin 3b. Without the
      prior written approval of the Regional Director, the Association shall not
      increase its total assets during any quarter in excess of an amount equal
      to net interest credited on deposit liabilities during the quarter. The
      growth restrictions imposed by this Paragraph shall remain in effect until
      the Regional Director reviews and approves the Association’s Revised
      Business Plan as required under Paragraph 11 of this Order. Any growth in
      assets, including any growth proposed in the Business Plan, should
      consider:
	 
      	 
      	 
      
	 
      	
                      a)

                    	
                      the
      source, volatility and use of the funds that support asset
      growth;

                    
	 
      	 
      	 
      
	 
      	
                      b)

                    	
                      any
      increase in credit risk or interest rate risk as a result of growth;
      and

                    
	 
      	 
      	 
      
	 
      	
                      c)

                    	
                      the
      effect of such growth on the Association’s
  capital.

                    


            

          

        

      

       

      Brokered Deposits and
Interest Rate Restriction.

      
        
          	 
      	 
      
	14.    
      Effective
      immediately, the Association shall comply with the requirements of 12
      C.F.R. § 337.6(b) and shall not: (i) accept, renew or roll over any
      brokered deposit, as that term is defined at 12 C.F.R. § 337.6(a)(2); or
      (ii) act as a deposit broker, as that term is defined at 12 C.F.R. §
      337.6(a)(5).


        

      

       

      Dividends.

      
        
          	 
      	 
      
	15.    
      Effective
      immediately, the Board shall not declare or pay dividends or make any
      other capital distributions, as that term is defined in 12 C.F.R. §
      563.141, without receiving the prior written approval of the Regional
      Director. The Association’s written request for written approval should be
      submitted to the Regional Director at least sixty (60) days prior to
      the  anticipated date of the proposed dividend or distribution
      of capital.


        

      

      


      Vantus
Bank

      Order to
Cease and Desist

      Page 12
of 16

      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Severance and
Indemnification Payments.

       

      16.          Effective
immediately, the Association shall not make any golden parachute payment1 or any
prohibited indemnification payment2 unless,
with respect to each such payment, the Association has complied with the
requirements of 12 C.F..R Part 359 and, as to indemnification payments, 12
C.F.R. § 545.121.

       

      Directorate and Management
Changes.

       

      17.          Effective
immediately, the Association shall comply with the prior notification
requirements for changes in directors and Senior Executive Officers3 set
forth in 12 C.F.R. Part 563, Subpart H.

       

      Employment Contracts and
Compensation Arrangements.

       

      18.          (a)
Effective immediately, the Association shall not enter into, renew, extend, or
revise any contractual arrangement relating to compensation or benefits for any
Senior Executive Officer or director of the Association, unless it first
provides the Regional Director with not less than thirty (30) days prior written
notice of the proposed transaction. The notice to the Regional Director shall
include a copy of the proposed employment contract or compensation arrangement
or a detailed, written description of the compensation arrangement to be offered
to such officer or director, including all benefits and perquisites. The Board
shall ensure that any contract, agreement, or arrangement submitted to the
Regional Director fully complies with the requirements of 12 C.F.R. Part 359, 12
C.F.R. §§ 563.39 and 563.161(b), and 12 C.F.R. Part 570 – Appendix
A.

       

      
        

      

      1 The term
“golden parachute payment” is defined at 12 CFR § 359.1(f).

      2 The term
“prohibited indemnification payment” is defined at 12 CFR §
359.1(l).

      3 The term
“senior Executive Officer” is defined at 12 C.F.R. § 563.555.

       

      Vantus
Bank

      Order to
Cease and Desist

      Page 13
of 16

      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

               
(b) Effective immediately, the Association shall not increase any salaries,
bonuses, or director’s fees or make any other similar payments, directly or
indirectly, to the Association’s directors or Senior Executive Officers without
prior written non-objection from the Regional Director.

       

      Third Party
Contracts.

       

      19.       Effective
immediately, the Association shall not enter into any arrangement or contract
with a third party service provider that is significant to the overall operation
or financial condition of the Association4 or
outside the Association’s normal course of business unless, with respect to each
such contract, the Association has: (a) provided the Regional Director with a
minimum of thirty (30) days prior written notice of such arrangement or
contract; (b) determined that the arrangement or contract complies with the
standards and guidelines set forth in OTS Thrift Bulletin 82a; and (c) received
written notice of non-objection from the Regional Director.

       

      Transactions with
Affiliates.

       

      20.       Effective
immediately, the Association shall not engage in any new transaction with an
affiliate unless, with respect to each such transaction, the Association has
complied with the notice requirements set forth in 12 C.F.R. § 563.41(c)(4),
which shall include the information set forth in 12 C.F.R. § 563.41(c)(3). All
transactions with an affiliate for which a notice is submitted pursuant to this
Paragraph of the Order shall comply with the requirements of 12 C.F.R. § 563.41
and 12 C.F.R. Part 223.

       

      
        

      

      4 A
contract will be considered significant to the overall operation or financial
condition of the Association where the annual contract amount equals or exceeds
two percent (2%) of the Association’s total capital.

       

      Vantus
Bank

      Order to
Cease and Desist

      Page 14
of 16

      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      Violations of
Law.

       

      21.    
Within thirty (30) days of receipt of any internal audit report, independent
external audit report, OTS report of examination, or other report prepared by
Association employees, agents, or independent contractors, which cites
violations of law, rule, or regulation, the Board shall ensure that each
violation of law, rule, or regulation is corrected, and the Board shall adopt
policies and procedures to prevent future violations. Upon adoption of such
policies and procedures, the Association shall immediately implement and comply
with the policies and procedures.

       

      Effective Date,
Incorporation of Stipulation.

       

      22.    
This Order is effective on the Effective Date as shown on the first page. The
Stipulation is made a part hereof and is incorporated herein by this
reference.

       

      Duration.

       

      23.    
This Order shall remain in effect until terminated, modified, or suspended, by
written notice of such action by the OTS, acting by and through its authorized
representatives.

       

      Time
Calculations.

       

      24.     Calculation
of time limitations for compliance with the terms of this Order run from the
Effective Date and shall be based on calendar days, unless otherwise
noted.

       

      25.    
The Regional Director may extend any of the deadlines set forth in the
provisions of this Order upon written request by the Association that includes
reasons in support for any such extension. Any OTS extension shall be made in
writing.

       

      Submissions and
Notices.

       

      26.    
All submissions, including any reports, to the OTS that are required by or
contemplated by this Order shall be submitted within the specified
timeframes.

       

      Vantus
Bank

      Order to
Cease and Desist

      Page 15
of 16

      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      27.    
Except as otherwise provided herein, all submissions, requests, communications,
consents, or other documents relating to this Order shall be in writing and sent
by first class U.S. mail (or by reputable overnight carrier, electronic
facsimile transmission, or hand delivery by messenger) addressed as
follows:

      
        
          	 
      	 
      	 
      
	 
      	
                  (a)

                	
                  To
      the OTS:

                
	 
      	 
      	 
      
	 
      	 
      	
                  Regional
      Director

                
	 
      	 
      	
                  Office
      of Thrift Supervision

                
	 
      	 
      	
                  One
      South Wacker Drive, Suite 2000

                
	 
      	 
      	
                  Chicago,
      Illinois 60606

                
	 
      	 
      	
                  Facsimile:
      (312) 917-5001

                
	 
      	 
      	 
      
	 
      	
                  (b)

                	
                  To
      the Association:

                
	 
      	 
      	 
      
	 
      	 
      	
                  Chairman
      of the Board

                
	 
      	 
      	
                  Vantus
      Bank

                
	 
      	 
      	
                  329
      Pierce Street

                
	 
      	 
      	
                  Sioux
      City, Iowa 51101

                
	 
      	 
      	
                  Facsimile:
      (712) 277-0224

                


        

      

       

      No Violations
Authorized.

       

      28.    
Nothing in this Order or the Stipulation shall be construed as allowing the
Association, its Board, officers, or employees to violate any law, rule, or
regulation.

       

      IT
IS SO ORDERED.

      
        	 
      	 
      	 
      	 
      
	 
      	
                OFFICE
      OF THRIFT SUPERVISION

              	 
      
	 
      	 
      	 
      	 
      
	 
      	
                By: 

              	
                /s/
      Daniel
      T. McKee

              	 
      
	 
      	 
      	
                Daniel
      T. McKee

              	 
      
	 
      	 
      	
                Regional
      Director, Central Region

              	 
      
	 
      	 
      	 
      	 
      
	 
      	
                Date:
      See Effective Date on page 1

              	 
      


      

       

      Vantus
Bank

      Order to
Cease and Desist

      Page 16
of 16