SONOMA -- Sonoma Valley Bancorp, parent company of Sonoma Valley Bank, has entered into agreements with the Federal Reserve Bank of San Francisco to shore up the institution’s balance sheet.
The agreement, among other requirements, states that the bancorp will provide quarterly progress reports; take steps to ensure that the bank complies with the consent order; seek regulatory consent to pay cash dividends or to incur, increase or guarantee any debt; secure prior approval for the appointment of any new director or senior executive officer; submit annual cash flow projections; and submit for approval a capital plan to maintain sufficient capital on a consolidated basis.
It states that within 60 days of the agreement it shall submit to the Reserve Bank a written statement of its planned sources and uses of cash for debt service, operating expenses and other purposes for the remainder of 2010. Sonoma shall submit to the Reserve Bank a cash flow projection for each calendar year subsequent to 2010 at least one month prior to the beginning of that calendar year.
In May when the original agreement was signed, Sean Cutting, the president and chief executive officer of the bank issued this statement:
“Sonoma Valley Bank has been working closely with the FDIC and the California Department of Financial Institutions since January 2010. On May 18, we entered into a Consent Order with our regulators that formalize steps which are already under way and that we and our regulators feel are necessary to maintain the bank’s financial health and its ability to provide high levels of service to our customers.”