UNITED STATES OF AMERICA BEFORE THE
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
VINEYARD
NATIONAL BANCORP
Docket No. O8-032-WA/XX-XX
Corona,
California
and
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FEDERAL
RESERVE BANKOF SAN
FRANCISCO San
Francisco, California
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WHEREAS,
in recognition of their common
goal to maintain the financial soundness of Vineyard National Bancorp,
Corona.
California ("VNB"), a registered
bank
holding company that
owns
and controls Vineyard Bank, National Association, Corona, California (the
"Bank"), a national banking association, and various nonbank subsidiaries,
VNB
and the Federal Reserve Bank of San Francisco (the “Reserve Bank'') have
mutually agreed to enter into this Written Agreement
(the
“Agreement");
and
WHEREAS,
on September
23, 2008, the board
of directors of VNB at a duly constituted meeting adopted a resolution
authorizing and directing Xxxxxxx
X.
Kratzto enter into this
Agreement on behalf of VNB, and consenting to compliance with each and every
provision of this Agreement by VNB 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, VNB and
the Reserve Bank
agree as follows:
Dividends
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1.
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(a) VNB
shall not declare or pay any dividends without the prior written
approval of the
Reserve
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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) VNB
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) VNB
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 the consolidated
organization's capital and earnings; VNB's cash flow; the Bank's capital, asset
quality, earnings, and allowance for loan and lease losses ("ALLL"); and
identification of the sources of funds for the proposed payment or distribution.
For requests to declare or pay dividends, VNB's 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).
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Debt
and Stock Redemption
2. (a) VNB
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) VNB
shall not, directly or indirectly, purchase or redeem any shares of its stock
without the prior written approval or the Reserve Bank.
Capital
Plan
3.
Within 60 days of this Agreement, VNB shall submit to the Reserve Bank an
acceptable written plan to maintain a sufficient capital position at the
consolidated organization and the Bank. 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);
(b) The
adequacy of the Bank's capital, taking into account the volume of classified
credits. concentrations of
credit, adequacy of ALLL, current and projected asset growth, and projected
retained earnings;
(c) The
source and timing of additional funds to fulfill the consolidated organization's
and the Bank's future capital requirements;
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(d) Supervisory
requests for additional capital
at
the Bank or the requirements of any supervisory action imposed on the Bank
by
any regulator;
(e) the
requirements
of section 225.4(a) of Regulation Y of the Board of Governors
(12 C.F.R. § 225.4(a)) that VNB
serve as a source of strength to the Bank; and
(f)
procedures
for VNB to
notify the Reserve Bank, in writing, no more than 30 days after the end of
any
quarter in which VNB's consolidated capital ratios or the Bank's capital ratios
(total risk-based, Tier 1
risk-based; or leverage)
fall below the plan's minimum ratios and to
submit to the Reserve Bank an acceptable written plan that details the steps
VNB
will take to increase its and the Bank's capital ratios above the plan's minimum
within 30 days of such calendar quarter-end date.
Affiliate
Transactions
4. (a) VNB
shall take all necessary
actions to ensure that the Bank complies with sections 23A and 23B of the
Federal Reserve Act (12 U.S.C. §§ 371c and 371c-1) and Regulation W of the Board
of Governors (12 C.F.R.
Part 223) in all transactions
between the Bank and its affiliates,
including VNB and its nonbank subsidiaries.
(b) VNB
and its
nonbank subsidiaries shall not cause the Bank to violate any provision of'
sections 23A and 23B of the Federal Reserve Act or Regulation W of the Board
of
Governors.
Appointment
of New
Officers and Directors, and
Severance and Indemnification Payments
5.
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, VNB shall comply with the notice provisions of
section 32 of theFD1
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.).
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6.
VNB
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).
Approval,
Implementation, and Progress Reports
7.
(a) VNB 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, VNB shall adopt the approved
capital plan.Upon
adoption, VNB 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.
8.
(a) Within 30 days after the end of each calendar quarter following
the date of this Agreement, the board of directors shall furnish to the Reserve
Bank written progress reports detailing the form and manner of all actions
taken
to secure VNB's compliance with this Agreement and the results thereof.
Communications
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9.
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All
communications regarding this Agreement shall be sent to:
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(a)
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Xx.
Xxxxx X. Xxxxxx
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Examining
Officer
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Banking
Supervision &
Regulation
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Federal
Reserve Bank or San Francisco
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10
l Market Street, Mail Stop 000
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Xxx
Xxxxxxxxx, Xxxxxxxxxx
00000
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5
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(b)
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Xx.
Xxxxxxx X. Xxxxx
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Chairman
of the Board
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0000
Xxxxxx Xxxxxx Xxxxx
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Xxxxxx,
Xxxxxxxxxx 00000
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Miscellaneous
10.
Notwithstanding any provision of this Agreement, the Reserve Bank may, in its
sole discretion, grant written extensions of time to VNB to comply with any
provision of this Agreement.
11.
The
provisions of this Agreement shall be binding upon VNB 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.
13.
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 VNB, the Bank, any nonbank subsidiary of
VNB,
or any of their current or former institution-affiliated parties
and their successors and assigns.
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
23 day of September,
2008.
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FEDERAL
RESERVE BANK OF SAN FRANCISCO
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By:
_/s/
Xxxxxxx
X. Kratz_____________________
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By:_/s/
Xxxxx
Reiser__________________________
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