Attached files
| file | filename |
|---|---|
| EX-10.1 - EUROBANCSHARES INC | v163006_ex10-1.htm |
| EX-99.1 - EUROBANCSHARES INC | v163006_ex99-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
____________________
FORM
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of report (Date of earliest event reported):
October
9, 2009
____________________
EUROBANCSHARES,
INC.
(Exact
name of registrant as specified in its charter)
____________________
|
Commonwealth of
Puerto Rico
|
000-50872
|
66-0608955
|
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File Number)
|
(IRS
Employer
Identification
No.)
|
State
Road PR-1, Km. 24.5
Quebrada
Arenas Ward
San
Juan, Puerto Rico 00926
(Address
of principal executive offices) (Zip Code)
(787)
751-7340
(Registrant’s
telephone number, including area code)
____________________
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
|
¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01 Entry Into a Material
Definitive Agreement.
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.
Item
9.01 Financial Statements and
Exhibits.
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(c)
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Exhibits
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10.1
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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.
|
|
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99.1
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Press
Release, dated October 16, 2009.
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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.
| EUROBANCSHARES, INC. | ||
|
Date: October
16, 2009
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By:
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/s/ Rafael Arrillaga-Torréns,
Jr.
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Rafael
Arrillaga-Torréns, Jr.
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||
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Chairman
of the Board, President and Chief Executive
Officer
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||
EXHIBIT
INDEX
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Exhibit
No.
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Description
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10.1
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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.
|
|
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99.1
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Press
Release, dated October 16,
2009.
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