UNITED STATES OF AMERICA BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D.C.
UNITED
STATES OF AMERICA
BEFORE
THE
BOARD OF
GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON,
D.C.
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Written
Agreement by and between
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Docket
No. 10-083-WA/XX-XX
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INTEGRA
BANK CORPORATION
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Evansville,
Indiana
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and
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FEDERAL
RESERVE BANK OF ST. LOUIS
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St.
Louis, Missouri
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WHEREAS, Integra Bank Corporation,
Evansville, Indiana (“IBC”), a registered bank holding
company, owns and controls Integra Bank, National Association, Evansville,
Indiana (the
“Bank”), a national bank, and various nonbank subsidiaries;
WHEREAS, it is the common goal of IBC
and the Federal Reserve Bank of St. Louis (the
“Reserve Bank”) to maintain the financial soundness of IBC so that IBC may serve
as a source of strength to the Bank;
WHEREAS, IBC and the Reserve Bank have
mutually agreed to enter into this Written Agreement (the “Agreement”);
and
WHEREAS, on May 6, 2010, the board of
directors of IBC, at a duly
constituted meeting, adopted a resolution authorizing and directing Xxxxxxx X.
Xxxxx to enter into this Agreement on behalf of IBC, and consenting to
compliance with each and every provision of this Agreement by IBC 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)).
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NOW THEREFORE, IBC and the Reserve Bank
agree as follows:
Source
of Strength
1. The
board of directors of IBC shall take appropriate steps to fully utilize IBC’s
financial and managerial resources, pursuant to section 225.4(a) of Regulation Y
of the Board of Governors of the Federal Reserve System (the “Board of
Governors”) (12 C.F.R. § 225.4(a)), to serve as a source of strength to the
Bank, including, but not limited to, taking steps to ensure that the Bank
complies with the Formal Agreement entered into with the Office of the
Comptroller of the Currency on May 20, 2009 and any other supervisory action
taken by the Bank’s federal regulator.
Dividends
and Distributions
2. (a) IBC
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.
(b) IBC
and its nonbank subsidiaries 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) IBC
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.
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(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 IBC’s capital, 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, IBC 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
3. (a) IBC
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) IBC
shall not, directly or indirectly, purchase or redeem any shares of its stock
without the prior written approval of the Reserve Bank.
Capital
Plan
4. Within
60 days of this Agreement, IBC shall submit to the Reserve Bank an acceptable
written plan to maintain sufficient capital at IBC 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 Bank’s federal
regulator;
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(b) the
adequacy of the Bank’s capital, taking into account the volume of classified
credits, its risk profile, the adequacy of the allowance for loan and lease
losses, current and projected asset growth, and projected earnings;
(c) the
source and availability of additional funds necessary to fulfill the
consolidated organization’s and the Bank’s future capital requirements on a
timely basis;
(d) supervisory
requests for additional capital at the Bank or the requirements of any
supervisory action imposed on the Bank by its federal regulator;
and
(e) the
requirements of section 225.4(a) of Regulation Y of the Board of Governors that
IBC serve as a source of strength to the Bank.
5. IBC
shall notify the Reserve Bank, in writing, no more than 30 days after the end of
any quarter in which any of IBC’s capital ratios fall below the approved plan’s
minimum ratios. Together with the notification, IBC shall submit an
acceptable written plan that details the steps that IBC will take to increase
IBC’s capital ratios to or above the approved plan’s minimums.
Cash
Flow Projections
6. Within
60 days of this Agreement, IBC shall submit to the Reserve Bank a written
statement of its planned sources and uses of cash for debt service, operating
expenses, and other purposes (“Cash Flow Projection”) for 2010. IBC
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
7. (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, IBC 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) IBC
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
8. 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
9. (a) IBC
shall submit a written capital plan that is acceptable to the Reserve Bank
within the applicable time period set forth in paragraph 4 of this
Agreement.
(b) Within
10 days of approval by the Reserve Bank, IBC shall adopt the approved capital
plan. Upon adoption, IBC 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
10. All
communications regarding this Agreement shall be sent to:
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(a)
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Xx.
Xxxxxxx X. Xxxxx
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Vice
President
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Federal
Reserve Bank of Xx. Xxxxx
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X.X.
Xxx 000
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Xx.
Xxxxx, Xxxxxxxx 00000-0000
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(b)
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Xx.
Xxxxxxx X. Xxxxx
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Chairman
and Chief Executive Officer
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Integra
Bank Corporation
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00
X.X. Xxxxx Xxxxxx
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X.X.
Xxx 000
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Xxxxxxxxxx,
XX 00000-0000
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Miscellaneous
11. Notwithstanding
any provision of this Agreement, the Reserve Bank may, in its sole discretion,
grant written extensions of time to IBC to comply with any provision of this
Agreement.
12. The
provisions of this Agreement shall be binding upon IBC and its
institution-affiliated parties, in their capacities as such, and their
successors and assigns.
13. Each
provision of this Agreement shall remain effective and enforceable until stayed,
modified, terminated, or suspended in writing by the Reserve Bank.
14. 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 IBC, the Bank, any nonbank subsidiary of IBC,
or any of their current or former institution-affiliated parties and their
successors and assigns.
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15. 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 6th day of
May, 2010.
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INTEGRA
BANK CORPORATION
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FEDERAL
RESERVE BANK
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OF
ST. LOUIS
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By:
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/s/ Xxxxxxx X. Xxxxx
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By:
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/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx
X. Xxxxx
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Xxxxxxx
X. Xxxxx
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Chairman
and
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Vice
President
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Chief
Executive Officer
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