A cease-and-desist (C&D) order executed in March 2010 between McHenry Bancorp Inc., a savings and loan holding company located in McHenry, Ill., and the former Office of Thrift Supervision (OTS) was terminated Nov. 1 by the Federal Reserve Board, the Fed announced Tuesday.
McHenry Bancorp operates as a holding company for McHenry Savings Bank, also in McHenry, Ill.
The 2010 C&D for McHenry Bancorp noted findings from a September 2009 examination by the OTS that the firm “engaged in unsafe or unsound practices, including those that resulted in the Holding Company operating with an inadequate level of capital protection for the volume, type, and quality of assets held by the consolidated Holding Company and inadequate earnings to augment capital.”
The order called for a detailed, written plan for enhancing consolidated capital and earnings, set limits and processes regarding dividend payments and declarations by the holding company and its subsidiary savings bank, limited the holding company’s handling and taking on of debt, and required notice of transactions with any subsidiary or affiliate. It also addressed golden parachute, indemnification, and employment contract and compensation arrangements.