Attached files
Exhibit 10.2
UNITED STATES OF AMERICA
Before the
OFFICE OF THRIFT SUPERVISION
-------------------------------
In the Matter of ) Order No.: WN-09-032
)
HARRINGTON WEST FINANCIAL ) Effective Date: October 14, 2009
GROUP, INC. )
)
Solvang, California )
OTS Docket No. H2621 )
-------------------------------
STIPULATION AND CONSENT TO ISSUANCE OF ORDER TO CEASE AND DESIST
----------------------------------------------------------------
WHEREAS, the Office of Thrift Supervision (OTS), acting by and through its
Regional Director for the Western Region (Regional Director), and based upon
information derived from the exercise of its regulatory and supervisory
responsibilities, has informed Harrington West Financial Group, Inc., Solvang,
California, OTS Docket No. H2621 (Holding Company), that the OTS is of the
opinion that grounds exist to initiate an administrative proceeding against the
Holding Company pursuant to 12 U.S.C. ss. 1818(b);
WHEREAS, the Regional Director, pursuant to delegated authority, is
authorized to issue Orders to Cease and Desist where a savings and loan holding
company has consented to the issuance of an order; and
WHEREAS, the Holding Company desires to cooperate with the OTS to avoid the
time and expense of such administrative cease and desist proceeding by entering
into this Stipulation and Consent to the Issuance of Order to Cease and Desist
(Stipulation) and, without admitting or denying that such grounds exist, but
only admitting the statements and conclusions in Paragraphs 1 - 3 below
concerning Jurisdiction, hereby stipulates and agrees to the following terms:
Harrington West Financial Group, Inc.
Stipulation and Consent to Issuance of Order to Cease and Desist
Page 1 of 5
Jurisdiction.
-------------
1. The Holding Company is a "savings and loan holding company" within the
meaning of 12 U.S.C. ss. 1813(w)(3) and 12 U.S.C. ss. 1467a. Accordingly, the
Holding Company is a "depository institution holding company" as that term is
defined in 12 U.S.C. ss. 1813(w)(1).
2. Pursuant to 12 U.S.C. ss. 1818(b)(9), the "appropriate Federal banking
agency" may initiate cease and desist proceedings against a savings and loan
holding company in the same manner and to the same extent as a savings
association for regulatory violations and unsafe or unsound acts or practices.
3. Pursuant to 12 U.S.C. ss. 1813(q), the Director of the OTS is the
"appropriate Federal banking agency" with jurisdiction to maintain an
administrative enforcement proceeding against a savings and loan holding
company. Therefore, the Holding Company is subject to the authority of the OTS
to initiate and maintain an administrative cease and desist proceeding against
it pursuant to 12 U.S.C. ss. 1818(b).
OTS Findings of Fact.
---------------------
4. Based on its ongoing supervision of the Holding Company, the OTS finds that
the Holding Company has engaged in unsafe and unsound practices by failing to
ensure that its wholly owned savings association subsidiary, Los Padres Bank
(Association), did not engage in unsafe and unsound practices that resulted in
deteriorating asset quality, deficient earnings, and inadequate capital levels
at the Association.
Consent.
--------
5. The Holding Company consents to the issuance by the OTS of the accompanying
Order to Cease and Desist (Order). The Holding Company further agrees to comply
with the terms of the Order upon the Effective Date of the Order and stipulates
that the Order complies with all requirements of law.
Harrington West Financial Group, Inc.
Stipulation and Consent to Issuance of Order to Cease and Desist
Page 2 of 5
Finality.
---------
6. The Order is issued by the OTS under 12 U.S.C. ss. 1818(b). Upon the
Effective Date, the Order shall be a final order, effective, and fully
enforceable by the OTS under the provisions of 12 U.S.C. ss. 1818(i).
Waivers.
--------
7. The Holding Company waives the following:
(a) the right to be served with a written notice of the OTS's charges
against it as provided by 12 U.S.C. ss. 1818(b) and 12 C.F.R. Part 509;
(b) the right to an administrative hearing of the OTS's charges as provided
by 12 U.S.C. ss. 1818(b) and 12 C.F.R. Part 509;
(c) the right to seek judicial review of the Order, including, without
limitation, any such right provided by 12 U.S.C. ss. 1818(h), or otherwise
to challenge the validity of the Order; and
(d) any and all claims against the OTS, including its employees and agents,
and any other governmental entity for the award of fees, costs, or expenses
related to this OTS enforcement matter and/or the Order, whether arising
under common law, federal statutes, or otherwise.
OTS Authority Not Affected.
---------------------------
8. Nothing in this Stipulation or accompanying Order shall inhibit, estop, bar,
or otherwise prevent the OTS from taking any other action affecting the Holding
Company if, at any time, the OTS deems it appropriate to do so to fulfill the
responsibilities placed upon the OTS by law.
Other Governmental Actions Not Affected.
----------------------------------------
9. The Holding Company acknowledges and agrees that its consent to the issuance
of the Order is solely for the purpose of resolving the matters addressed
herein, consistent with Paragraph 8 above, and does not otherwise release,
discharge, compromise, settle, dismiss, resolve, or in any way affect any
actions, charges against, or liability of the Holding Company that arise
pursuant to this action or otherwise, and that may be or have been brought by
any governmental entity other than the OTS.
Harrington West Financial Group, Inc.
Stipulation and Consent to Issuance of Order to Cease and Desist
Page 3 of 5
Miscellaneous.
--------------
10. The laws of the United States of America shall govern the construction and
validity of this Stipulation and of the Order.
11. If any provision of this Stipulation and/or the Order is ruled to be
invalid, illegal, or unenforceable by the decision of any Court of competent
jurisdiction, the validity, legality, and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby, unless
the Regional Director in his or her sole discretion determines otherwise.
12. All references to the OTS in this Stipulation and the Order shall also mean
any of the OTS's predecessors, successors, and assigns.
13. The section and paragraph headings in this Stipulation and the Order are for
convenience only and shall not affect the interpretation of this Stipulation or
the Order.
14. The terms of this Stipulation and of the Order represent the final agreement
of the parties with respect to the subject matters thereof, and constitute the
sole agreement of the parties with respect to such subject matters.
15. The Stipulation and Order shall remain in effect until terminated, modified,
or suspended in writing by the OTS, acting through its Regional Director or
other authorized representative.
Signature of Directors/Board Resolution.
----------------------------------------
16. Each Director signing this Stipulation attests that he or she voted in favor
of a Board Resolution authorizing the consent of the Holding Company to the
issuance of the Order and the execution of the Stipulation. This Stipulation may
be executed in counterparts by the directors after approval of the execution of
the Stipulation at a duly called board meeting.
Harrington West Financial Group, Inc.
Stipulation and Consent to Issuance of Order to Cease and Desist
Page 4 of 5
WHEREFORE, the Holding Company, by its directors, executes this
Stipulation.
Accepted by:
HARRINGTON WEST FINANCIAL OFFICE OF THRIFT SUPERVISION
GROUP, INC.
Solvang, California
By: /s/ By: /s/
-------------------------------- ---------------------------------------
Craig J. Cerny C.K. Lee
Chairman Regional Director, Western Region
Date: See Effective Date on page 1
/s/
------------------------------------
Paul O. Halme, Director
/s/
------------------------------------
Tim Hatlestad, Director
/s/
------------------------------------
John J. McConnell, Director
/s/
------------------------------------
William W. Phillips, Jr., Director
/s/
------------------------------------
William D. Ross, Director
Harrington West Financial Group, Inc.
Stipulation and Consent to Issuance of Order to Cease and Desist
Page 5 of
