UNITEDSTATES OF AMERICA BEFORETHE BOARD OFGOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON,D.C. STATE OFOREGON DEPARTMENTOF CONSUMER AND BUSINESS SERVICES, DIVISIONOF 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/RB-HC

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 Patricia Moss 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:

(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.

 

(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).

 

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.

 

(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;

 

(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.

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.).

 

 

(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).

 

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.

 

8.         All communications regarding this Agreement shall be sent to:

(a)

Mr. John Kandaris Examining Manager Banking Supervision and Regulation Federal Reserve Bank of San Francisco 101 Market Street, Mail Stop 920 San Francisco, California 94105

 

 

(b)

Mr. Richard Renken Banks and Trusts Program Manager State of Oregon, Department of Consumer and Business Services Division of Finance and Corporate Securities 350 Winter Street NW, Room 410 Salem, Oregon ###-###-####

 

(c)

Ms. Patricia Moss Chief Executive Officer Cascade Bancorp 1100 NW Wall Street Bend, Oregon 97701

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.

 

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.

 

 

 

 

I, Gregory D. Newton 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 Patricia Moss, 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.

 

 

(Date)

RESOLVED that Patricia Moss, 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, Gregory Newton, 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.