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
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
CASCADE
BANCORP Docket
No. 09-165-WA/▇▇-▇▇
Bend,
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,
Cascade Bancorp, Bend, Oregon (“Bancorp”), a registered bank holding company,
owns and controls Bank of the Cascades, Bend, 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 October 23, 2009 the board of directors of Bancorp, at a duly constituted
meeting, adopted a resolution authorizing and directing ▇▇▇▇▇▇▇▇
▇▇▇▇ 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.
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(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, 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
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;
(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 1, 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.
Compliance
with Laws and Regulations
5.
(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.).
4
(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
6.
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
7.
(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.
Communications
8.
All
communications regarding this Agreement shall be sent to:
|
(a)
|
▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Manager
Banking Supervision and Regulation
Federal Reserve Bank of San Francisco
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
|
5
|
(b)
|
▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
and Trusts Program Manager
State
of Oregon, Department of Consumer and Business Services
Division
of Finance and Corporate Securities
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
|
|
(c)
|
▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇
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Miscellaneous
9.
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.
10.
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.
11.
Each provision of this Agreement shall remain effective and enforceable until
stayed, modified, terminated, or suspended in writing by the Reserve Bank and
the DFCS.
12.
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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13.
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 26th day of October, 2009.
| CASCADE BANCORP | FEDERAL RESERVE BANK OF SAN FRANCISCO | |||||
| By: |
/s/
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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By: |
/s/
▇▇▇▇▇ ▇▇▇▇▇
Vice President |
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OREGON
DEPARTMENT OF CONSUMER AND BUSINESS SERVICES, DIVISION OF FINANCE AND
CORPORATE SECURITIES
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| By: |
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Administrator |
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7
SECRETARY’S
CERTIFICATE
I, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ do hereby certify that I am the duly elected and Secretary
of Cascade Bancorp and that the following is a true and correct copy
of resolution adopted by the Board of Directors at a special meeting held on
the 23rd day of October, 2009:
RESOLVED, that the Board of
Directors of Cascade Bancorp (the “Company”) hereby authorizes and
directs ▇▇▇▇▇▇▇▇ ▇▇▇▇, Chief Executive Officer of the Company, acting
on behalf of the Company to enter into the Written Agreement (the “Agreement”)
by and between the Federal Reserve Bank of San Francisco and the Company, the
form of which is attached hereto as Exhibit A; and
RESOLVED, that Board of
Directors of the Company hereby consents to compliance by the Company and its
institution-affiliated parties, as such term is defined in sections 3(u) and
8(b)(3) of the Federal Deposit Insurance Act, as amended, with each and every
provision of the Agreement.
The
foregoing resolutions are presently in full force and effect and have not been
revoked, modified or rescinded as of the date hereof.
IN WITNESS WHEREOF, I have
subscribed my name and affixed the seal of this Corporation this 23rd day
of October, 2008.
|
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
| ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Secretary |
Resolution
of the Board of Directors
of
(Name of
Company)
at
a
Special
(or Regular) Meeting
(Date)
RESOLVED
that ▇▇▇▇▇▇▇▇ ▇▇▇▇, Chief Executive Officer is hereby authorized and
directed to execute the Written Agreement between the Company and the Federal
Reserve Bank of San Francisco.
CERTIFICATION
The
undersigned, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, was present and designated recording secretary for
the meeting of the Board of Directors of Cascade Bancorp held
on October 23, 2008 and hereby certifies that the above resolution was
unanimously passed by the Board of Directors.
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Dated:
October 23, 2007
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By:
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, | |||
| Secretary | |||