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| EUBK > SEC Filings for EUBK > Form 8-K on 16-Oct-2009 | All Recent SEC Filings |
16-Oct-2009
Entry into a Material Definitive Agreement, Financial Statements and Exhibits
On October 9, 2009, the Federal Deposit Insurance Corporation issued an Order to
Cease and Desist (the "Order") to Eurobank (the "Bank"). The Board of Directors
of the Bank previously entered into a stipulation and consent (the "Consent")
related to the issuance of the Order. The Order requires the Bank to, among
other things: (1) develop a management plan to address certain deficiencies
noted by the Bank's regulatory authorities with respect to the Bank's management
and staffing needs; (2) increase the Board's participation in the affairs of the
Bank and assume full responsibility for the approval of sound policies and
objectives; (3) prepare and submit to the FDIC enhanced loan policies and
procedures that address certain recommendations noted by the Bank's regulatory
authorities; (4) improve its lending and credit administration function through
the enhancement of loan review procedures and loan documentation procedures, and
the reduction of classified and delinquent loans through aggressive workout
programs; (5) establish an adequate and effective appraisal compliance program,
including enhancing the Bank's appraisal policy; (6) eliminate all items
classified as "loss" which have not previously been charged off or collected;
(7) formulate a written plan to reduce the Bank's exposure to certain classified
assets; (8) not extend any additional credit to certain borrowers who have a
loan or other extension or credit that is classified unless there is a written
statement giving the reasons why such credits are in the best interest of the
Bank, improves the Bank's position and is in compliance with the Bank's loan
policy; (9) maintain, through charges to current operating income, an adequate
allowance for loan and lease losses; (10) formulate and submit to the FDIC a
written profit plan and comprehensive budget plan for the remainder of 2009 and
for each year thereafter; (11) maintain a ratio of Tier 1 capital to total
assets of at least 6.5% as of December 31, 2009 and 7% as of March 31, 2010, and
a ratio of qualifying total capital to risk-weighted assets of at least 11% as
of December 31, 2009; (12) develop and submit to the FDIC a written plan for
systematically reducing and monitoring the Bank's portfolio of loans,
securities, or other extensions of credit advanced or committed to or for the
benefit of any borrowers in commercial real estate and acquisition, development
and construction to an amount that is commensurate with the Bank's business
strategy, management expertise, size and location; (13) submit to the FDIC a
revised and comprehensive funds management and liquidity plan; (14) develop and
submit to the FDIC a comprehensive business/strategic plan covering an operating
period of at least three years; (15) cease soliciting, accepting, renewing or
rolling over any brokered deposits without the prior consent of the FDIC; (16)
engage a qualified independent firm to conduct a review of account and
transaction activity under the Bank Secrecy Act/Anti Money Laundering to
determine whether suspicious activity and transactions through the Bank were
properly identified and reported in accordance with laws and regulations; (17)
not declare or pay any cash dividends, pay any management fees, or make any
payments to or for the benefit of the Bank's holding company or other affiliates
without the prior consent of the FDIC; and (18) establish a compliance committee
of at least three non-employee directors whose responsibilities include
monitoring and coordinating the Bank's compliance with the Order.
The Order will remain in effect until modified, terminated, suspended or set aside by the FDIC.
A copy of each of the Order and the Consent are included as Exhibit 10.1 and are incorporated herein by reference. The description of the Order set forth above does not purport to be complete, and is qualified by reference to the full text of the Order.
On October 16, 2009, EuroBancshares, Inc. issued a press release related to the Order. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K.
(c) Exhibits
10.1 Order to Cease and Desist, dated October 9, 2009, issued by the Federal Deposit Insurance Corporation, together with Stipulation and Consent to the Issuance of an Order to Cease and Desist.
99.1 Press Release, dated October 16, 2009.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 16, 2009 By: /s/ Rafael Arrillaga-Torréns, Jr.
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