Exhibit 99.1
FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D.C.
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)
)
In the Matter of )
) SUPERVISORY
TEMECULA VALLEY BANK ) PROMPT CORRECTIVE
TEMECULA, CALIFORNIA ) ACTION DIRECTIVE
)
(INSURED STATE NONMEMBER BANK) ) FDIC-09--280PCAS
)
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WHEREAS, Temecula Valley Bank, Temecula, California (the "Bank") is a
significantly undercapitalized depository institution as that term is defined in
Section 38(b)(1) of the Federal Deposit Insurance Act ("Act"), 12 U.S.C.
ss.1831o(b)(1), and Section 325.103 of the Federal Deposit Insurance Corporation
("FDIC") Rules and Regulations, 12 C.F.R. ss.325.103;
WHEREAS, pursuant to a letter dated April 8, 2009, notifying the Bank of
its undercapitalized capital category, the FDIC required the Bank to submit an
acceptable capital restoration plan to the FDIC by May 22, 2009;
WHEREAS, the Bank submitted a capital restoration plan on May 12, 2009
which the FDIC determined was unacceptable pursuant to section 38(e)(2) of the
Act, 12 U.S.C. ss.1831o(e)(2), and section 325.104 of the FDIC Rules and
Regulations, 12 C.F.R. ss. 325.104;
WHEREAS, based on the Bank's Consolidated Report of Condition and Income
(Call Report) as of March 31, 2009, the FDIC sent a letter to the Bank dated May
28, 2009 notifying the Bank of its deterioration to a significantly
undercapitalized capital category;
WHEREAS, the Bank's condition continues to deteriorate;
WHEREAS, the Bank's management has not demonstrated the ability to return
the Bank to a safe and sound condition;
WHEREAS, the Bank's unacceptable capital plan and deteriorating condition
and management's inability to return the Bank to a safe and sound condition
require that prompt corrective action be taken immediately.
WHEREAS, the actions in this directive are necessary to carry out the
purposes of Setion 38 of the Act including Section 38(e)(5), 12 U.S.C.
1831o(e)(5);
THEREFORE, the FDIC finds it necessary, in order to carry out the purposes
of Section 38 of the Act, to issue this SUPERVISORY PROMPT CORRECTIVE ACTION
DIRECTIVE without providing notice as set forth in Section 308.201(a)(1) of the
FDIC's Rules of Practice and Procedure, 12 C.F.R. ss.308.201(a)(1), and hereby
issues this SUPERVISORY PROMPT CORRECTIVE ACTION DIRECTIVE pursuant to Section
38 of the Act, 12 U.S.C. ss.1831o, and Section 308.201(a)(2) of the FDIC's Rules
of Practice and Procedure, 12 C.F.R. ss.308.201(a)(2).
SUPERVISORY PROMPT CORRECTIVE ACTION DIRECTIVE
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IT IS HEREBY DIRECTED, that within 30 days of the effective date of this
Directive, the Bank shall take on or both of the following actions to
recapitalize the Bank:
1. The Bank shall sell enough voting shares or obligations of the Bank so
that the Bank will be adequately capitalized after the sale; and/or
2. The Bank shall accept an offer to be acquired by a depository
institution holding company or to combine with another insured
depository institution;
FURTHER DIRECTED, that during the period this Directive is in effect, the
Bank shall not accept, renew or rollover any brokered deposits as defined in
section 337.6(a)(2) of the FDIC Rules and Regulations, 12 C.F.R. ss.
337.6(a)(2);
FURTHER DIRECTED, that during the period this Directive is effective, the
Bank shall restrict the interest rates that the Bank pays on deposits to comply
with the interest rate restrictions in section 337.6 of the FDIC Rules and
Regulations, 12 C.F.R. ss. 337.6;
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FURTHER DIRECTED, that during the period this Directive is in effect, the
Bank shall not permit its average total assets during any calendar quarter to
exceed its average total assets during the preceding calendar quarter;
FURTHER DIRECTED, that during the period this Directive is in effect, the
Bank shall make no capital distributions or dividend payments to its parent or
any affiliate of the Bank or its parent, nor shall the Bank pay any bonuses to,
or increase the compensation of, any director or officer of the Bank without
prior written approval from the FDIC. The term "capital distribution" shall be
defined as at Section 38(b)(2)(B) of the Act (12 U.S.C. ss. 1831o(b)(2)(B));
FURTHER DIRECTED, that during the period this Directive is in effect, the
Bank shall comply with Section 23A of the Federal Reserve Act as if subsection
(d)(1) of that section (exempting transactions with certain affiliated
institutions) did not apply;
FURTHER DIRECTED, that during the period this Directive is in effect, the
Bank shall not engage in branching and shall solicit the FDIC's prior written
approval to relocate, sell or dispose of any existing branch;
FURTHER DIRECTED, that the provisions of this SUPERVISORY PROMPT CORRECTIVE
ACTION DIRECTIVE shall not affect the obligations of the Bank pursuant to any
other action issued against the Bank by the FDIC;
FURTHER DIRECTED, that this SUPERVISORY PROMPT CORRECTIVE ACTION DIRECTIVE
shall become effective immediately upon its receipt by the Bank.
Each provision of this SUPERVISORY PROMPT CORRECTIVE ACTION DIRECTIVE shall
be binding upon the Bank, its directors, officers, employees, agents,
successors, assigns, and other institution-affiliated parties of the Bank.
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Each provision of this SUPERVISORY PROMPT CORRECTIVE ACTION DIRECTIVE shall
remain effective and enforceable until the Bank has been adequately capitalized
on average for four (4) consecutive calendar quarters, except to the extent that
any provision shall be modified, terminated, suspended, or set aside by the
FDIC.
The Bank may file a written appeal of this SUPERVISORY PROMPT CORRECTIVE
ACTION DIRECTIVE within fourteen (14) calendar days from the date of the
issuance of this Directive as provided in section 308.201(a)(2) of the FDIC's
Rules of Practice and Procedure, 12 C.F.R. ss.308.201(a)(2). The appeal shall be
filed with Stan Ivie, Regional Director, Federal Deposit Insurance Corporation,
San Francisco Regional Office, 25 Jessie Street at Ecker Square, San Francisco,
California 94105, with a copy to Joseph J Sano, Regional Counsel, Federal
Deposit Insurance Corporation, San Francisco Regional Office, 25 Jessie Street
at Ecker Square, San Francisco, California 94105.
Pursuant to delegated authority. Dated this 15th day of June, 2009.
/s/ J. George Doerr
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J. George Doerr
Deputy Regional Director
Divison of Supervision and Consumer Protection
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